Tag: SRO

FBR launches prize scheme for POS customers

ISLAMABAD: Federal Board of Revenue (FBR) on Monday launched prize scheme for customers of retailers, who integrated their sales through Point of Sales (POS) with the tax system.

The FBR issued SRO 1005(I)/2021 for launching the prize scheme for customers of tier-1 retailers, who have integrated their retail outlets with the FBR computerized system for real-time reporting of sales and mystery shopping in respect of verification of invoices from such retailers.

Procedure for prize scheme.—

The customers of integrated tier-1 retailer, whose names and CNICs are notified through random computerized draw shall be entitled to prizes in respect of their purchases from the integrated tier-1 retailers.

The customers shall verify the electronically generated invoice of integrated retailers either through “tax asaan” application or by sending sms to number 9966.

The application shall notify the customer regarding the status of invoice either as “verified” or “unverified”.

In case of verified invoice, the customer shall furnish one time, the following detail to the online system, namely: Name; CNIC; and Mobile number

Names and CNICs of the customers shall be included in the random computerized draw upon fulfillment of the requirement.

In case of unverified invoice, the customer shall report the same through system. The Board shall conduct enquiry and take appropriate action under the relevant provisions of law.

The computerized draw for the prizes shall be held in the first week of every month starting from the month of August, 2021 at the FBR Headquarters and the invoices of the immediately preceding month shall be entered in the draw.

Draw winners shall be required to perform biometric verification, at the nearest e-sahulat facility of NADRA and submit scanned copy on “tax assan” application. After successful biometric verification, winners shall be required to provide their IBAN through “tax asaan” application.

The total prize money and the denomination of the prizes shall be decided on month to month basis by the Board.

Procedure for mystery shopping.—

Mystery shopping shall be conducted by a person or the firm, duly authorized by the Board.

The person or firm authorized by the Board under sub-rule (1), shall carry out mystery shopping on random basis from tier-1 retailers.

The person or firm authorized by the Board under sub-rule (1), shall verify the invoices from the online system of FBR and in case of fake or invalid invoice, report the matter to the Board for necessary action as per relevant provisions of the Act and the rules thereunder.

Any other person may, in case of fake or invalid invoice, report the matter to the Board for necessary action as per relevant provisions of the Act and the rules thereunder.

The informer may claim reward on the basis of the detection and recovery made in consequence of fake or invalid invoice in terms of provisions of section 720 of the Act.

August 9, 2021
FBR issues valuation for steel products

Islamabad, January 18, 2024 – The Federal Board of Revenue (FBR) has issued valuation of locally produced steel products for collection of sales tax.
(more…)

August 4, 2021
Tax waiver of Rs64.2 billion avail by only 37 enterprises

ISLAMABAD: An amount of Rs64.2 billion has been granted as waiver to only 37 enterprises, including the State Bank of Pakistan (SBP), Dr. Ikramul Haq, Advocate Supreme Court said on Monday.

He was addressing a webinar hosted by Pakistan Institute of Development Economics on the topic of ‘Impact of SROs on Pakistan Economy’.

Further highlighting the cost of tax exemption, Dr. Ikram said that the Supreme Court of Pakistan’s Diamer-Bhasha Mohmand Dam Fund donations had cost Rs2.13 billion as tax expenditure under income tax.

“Total cost of exemption on perquisites, benefits and allowances received by judges of Supreme Court of Pakistan and High Court is estimated at Rs 283 million. Value of tax-free superior judicial allowance was at Rs526.507 million for in-service judges and for the retired judges it was Rs605.280 million,” according to presentation of Dr. Ikramul Haq.

While criticizing the issuance of SROs, he said that the SROs, other than for rule making or clarification or guidance, are in utter violation of the supreme law of the land and binding judgments or Supreme Court under Article 189 of the Constitution.

“Even rule-making power should be subjected to approval by Parliament as is the case in many countries,” he added.

The impact of SROs on the economy, Dr. Ikramul Haq said a typical shock follows a cumulative drop of real GDP per capita of 5.8 percent over the court of 10 years.

“This means about 0.171 percent – 0.885 percent of real GDP per capita growth is lost every year due to SRO exemptions,” he added.

Taxation that includes reduction or enhancement of rates or giving exemptions, waivers and concessions by SROs is a flagrant violation of the Constitution. “Blame lies solely with legislators that have delegated (rather abdicated) their constitutional obligation,” he added.

He further added: “Delegation of power to executive to issue SROs is violation of Article 77 read with Article 162 as any Bill that imposes or varies a tax or duty, the whole or part of the net proceeds whereof is assigned to any province, cannot be even tabled in Parliament without the prior approval of the President.”

He pointed out that a report of World Trade Organisation (WTO), Trade Policy Review of Pakistan (March 24 & 26, 2015) highlighted that about 4,500 SROs were issued leading to a revenue loss of Rs 650 billion.

Exemptions/concessions given through SROs were of Rs. 5500 billion from 2008 to 2013 alone, as admitted by the Chairman FBR before the Senate Standing Committee on Finance & Revenue on May 13, 2014.

Reduction of duties and tax concessions for those possessing enormous money power by Executive by using its executive authority available in the form of SROs, has created innumerable tax distortions in tax system.

February 8, 2021
FBR issues SROs for reducing rate of duty, taxes

ISLAMABAD: The Federal Board of Revenue (FBR) has issued concessionary Statutory Regulator Orders (SROs) for reduction in duty and tax rate for import of pulses and edible oil/seeds.

The FBR issued two different SROs i.e. SRO 287(I)/2020 and SRO 288(I)/2020 to allow concession of duty and taxes on domestic supply and import of goods.

Through SRO 287(I)/2020 the government has allowed exemption from withholding income tax on import of pulses till June 30, 2020.

Similarly, through SRO 288(I)/2020 the FBR also withdrew additional customs duty imposed on import of pulses. This additional customs duty shall not be levied till June 30, 2020.

Through SRO 287(I)/2020 the rate of tax under Section 153 shall be at 1.5 percent in case of a person, other than a company, as a recipient of payment for goods supplied to Utility Stores Corporation of Pakistan. The tax rate shall be applied on the gross amount of payment in respect of supply of tea, spices, salt, dry milk, sugar, pulses, wheat flour and ghee for the period commencing from the date of issuance of the notification till June 30, 2020.

April 7, 2020
Importers wait issuance of concessionary SRO for consignment clearance

KARACHI: Around 500 containers of commodities have been stuck up at ports as importers are waiting issuance of concessionary SRO for customs clearance.

“The government on March 30, 2020 decided on to bring advance tax on import of pulses to zero from two per cent and exemption of two per cent additional customs duty on oil seeds and palm oil imports,” Patron in Chief, Karachi Wholesalers Grocers Association (KWGA), Anis Majeed said in a statement on Tuesday.

Majeed said that the government had reduced 2 percent advance income tax on Pulses and 2 percent additional duty on edible oil and seeds for alleviating the adverse impact of Covid-19 and lockdown.

“Our members are waiting for the SRO so that they can get duty relief on pulses imports,” he pointed out

KWGA chief further said he has taken up the matter with Chief Collector of Customs but the customs officer unable to respond positively.

“A number of importers are confused whether to clear their consignments of pulses while few of them are trying to clear their goods as they believe that not releasing pulses may create shortage in the markets at a time when buying of pulses and other essential items have surged sharply on rising demand from ration providers to the poor people,” he added.

He claimed that 400-500 containers of various pulses are awaiting clearance, while importers of oil seeds are also double minded as they are not clearing 32,000 tonnes of canola seed that landed at Karachi Port and another 64,000 tonnes at Port Qasim.

April 7, 2020
FBR increases up to 28.34 percent retail value of CNG for sales tax collection

ISLAMABAD: Federal Board of Revenue (FBR) has enhanced the consumer value of CNG by 28.34 percent for collection of sales tax from July 01, 2019.

The FBR issued SRO 690(I)/2019 to notify the consumer value of CNG for the purpose of charging of sales tax from CNG stations by gas transmission and distribution companies.

The FBR increased the consumer value of CNG to Rs69.57 per kilogram for Region-I, which included Khyber Pakhtunkhwa, Baluchsitan and Potohar Region (Rawalpindi, Islamabad, and Gujar Khan. The increase in consumer value is around 7.36 percent for this region as compared with the previous rate of Rs64.80 per kilogram.

However, the FBR increased the consumer value of CNG by 28.34 percent for Region – II to Rs74.04 per kilogram from Rs57.69 per kilogram.

The Region – II is included: Sindh and Punjab excluding Potohar Region.

Large Taxpayers Unit (LTU) Karachi two years back presented a draft amendment, which stated:

“Notification in exercise of powers under subsection (8) of section 3 for value of supply of CNG to CNG consumers as per prevailing market price in the same way as it is being issued in case of sale of petroleum product every month.

“Board [FBR] may kindly issue the notification in exercise of powers under subsection (8) of section 3 for value of supply of CNG to CNG consumers as per prevailing market price in the same way as it is being issued in case of sale of petroleum products to avoid huge loss of monthly sales tax revenue.”

The LTU Karachi said that the Gas Transmission and Distribution Company charges sales tax from CNG stations @ 17 percent of the value of supply to the CNG consumers as notified by the Board from time to time in terms of section 3(8) of the Sales Tax Act, 1990.

Board accordingly vide its SRO No. 236(I)/2014 dated 31-03-2014, had notified the value of supply to the CNG consumers as the total value added cost of CNG as notified by the OGRA.

The latest notification issued by OGRA is dated 31.08.2015 which fixed the maximum CNG price as follows:

Region Value Added Cost GST

@ 17%
Maximum

CNG Sale Price

I 64.80 11.02 Rs. 75.82
II 57.69 9.81 Rs. 67.50

On 21-12-2016, OGRA deregulated the CNG sector in Pakistan, and directed the CNG station operators/associations to fix the rates themselves, as per market demand.

This caused in an instant increase in the rates of CNG which jumped from Rs. 67.50 per kg in the Southern Region to Rs.79 overnight.

However, the Gas distribution companies are charging sales tax on the previously issued notification of OGRA dated 31-08-2015.

As a result, the CNG stations are collecting sales tax on maximum CNG sales price at Rs79 per kg from the end consumers where as the Government is getting sales tax from the Gas distribution companies on maximum retail price at Rs67.50, incurring a loss of sales tax revenue of Rs1.67 per kg.

This loss of sales tax revenue of Rs.1.67 per kg is being collected from end consumers and pocketed by CNG stations.

CNG retail price per kg on which SSGC is collecting GST (Rs.) GST @ 17%(Rs) CNG prevailing market retail price (Rs) GST @ 17% (Rs) Loss in sales tax revenue per kg(Rs)
67.50 9.81 79.00 11.48 1.67

The per month loss to the government revenue comes to be Rs75 million only in the case of SSGCL as the average monthly sale of Gas to the CNG stations by SSGCL is 50 million kgs of gas.

Similarly the loss in case of SNGPL which caters more than three times of CNG stations is fairly high.

June 29, 2019
FBR imposes up to 7 percent additional customs duty

ISLAMABAD: Federal Board of Revenue (FBR) has imposed up to seven percent additional customs duty on items falling under tariff slab of 20 percent and higher slabs.

The FBR issued SRO 670(1)/2019 on Saturday stated that in supersession of its Notification No. SRO 630(1)/2018, dated the May 24, 2018, the federal government approved to levy additional customs duty on import of goods specified in the First Schedule to the said Act, at the rate of-

(i) two per cent on goods falling under tariff slabs of 0 percent, 3 percent and 11 percent;

(ii) four per cent on goods falling under tariff slab of 16 percent; and

(iii) Seven per cent on goods falling under tariff slab of 20 percent and higher slabs including slabs of specific rates.

The FBR said that the value of goods for purpose of this levy shall be the value as determined under section 25 or section 25A of the said Act.

The additional customs duty shall not be levied on the following, namely: –

(i) import of seeds and spores for sowing (PCT 0904.2120, 1006.1010,
1209.0000);

(ii) import under Chapter 31 of First Schedule of the Customs Act,1969
(IV of 1969);

(iii) import of goods classifiable under PCT codes, 52.01, 52.03, 9501.3000, 5503.1100, 5503.1900, 5503.3000, 5503.4000, 5503.9000, 5504.1000, 5504.9000, 5506.1000, 5506.3000, 5506.4000, 5506.9000 and 5507.0000;

(iv) import of goods classifiable under PCT codes 2902.3000, 2914.1200, 2915.1290, 2933.9990, 3202.1000, 3202.9010, 3202.9090, 3204.1100, 3204.1300, 3207.1090, 3208.1090, 3208.9090, 3403.9910, 3506.9110, 3506.9190, 3812.3900, 3906.9020, 4005.1090, 4005.9900, 8453.2000, 9606.2920 and 9606.2990;

(v) plant and machinery used in manufacturing or production of goods as is classifiable under Chapter 84 and 85 of the First Schedule to the Customs Act, 1969 (IV of 1969);

(vi) import under PCTs 8517.1211 and 8517.1219

(vii) import under Chapter 99 of First Schedule of the Customs Act, 1969

(IV of 1969);

(viii) import under Fifth Schedule to the Customs Act, 1969 (IV of 1969)
excluding;

(a) serial numbers 30, 32, 33 and 35 of table of Part-l,

(b) serial numbers 20 to 28, 30, 60, 96, 102, 108 to 118 of Table of Part Ill; and

(c) Serial numbers 29 to 51, 66 to 85, 109 to 115, 117 to 126, 128 to 155 and 157 to 169 of Table-A, Sr. No. 4 to 9, 11 to 14, 19 to 21 of Table-B and Sr. No.1 to 47 of Table-C of Part VII

(ix) import under the Baggage Rules, 2006;

(x) import under sub-chapters 3 and 7 of chapter XII and chapter XV of Customs Rules, 2001;

(xi) import under Notification No.SRO.577(I)/2005 dated 6th June, 2005;

(xii) import under Notification No.SRO.565(1)/2006 dated 5th June, 2006;

(xiii) import under Notification No.SRO.693(I)/2006 dated 1st July, 2006;

(xiv) import under Small and Medium Enterprises and Export Oriented Units Rules, 2008;

(xv) import under temporary importation scheme vide S.R.O. 492(1)/2009, dated the 13th June, 2009; and

(xvi) imports under condition (vii) of SRO 678(1)/2004, dated the 7th August, 2004, by the Exploration and Production Companies, their contractors and service companies for offshore projects only.

The FBR said that this notification shall take effect from July 1, 2019.

June 29, 2019
FBR amends requirement of cash withdrawal information by banks

ISLAMABAD: Federal Board of Revenue (FBR) on Wednesday issued new instructions to banks regarding providing details of cash withdrawal by filers and non-filers.

The FBR issued SRO 469(I)/2019 dated April 17, 2019 to amend SRO 1165(I)/2018 dated September 28, 2018. The amendment has been made regarding amount deducted on cash withdrawal from banks by filers and non-filers during a month.

Through SRO 1165(I)/2018, the FBR changed the reporting criteria for banks under Income Tax Rules, 2001. Under the revised reporting criteria banks have been required to provide information of persons who have withdrawn cash exceeding Rs50,000 in a day and tax deductions thereon for filers and non-filers, aggregating to Rs 1 million or more during a month.

The banks are required to provide information of cash withdrawal including name of person, CNIC, address, amount withdrawn during a month.

However, through the latest SRO the FBR added a column of amount of tax deducted to the table of information.

April 18, 2019

CNG retail price per kg on which SSGC is collecting GST (Rs.)	GST @ 17%(Rs)	CNG prevailing market retail price (Rs)	GST @ 17% (Rs)	Loss in sales tax revenue per kg(Rs)
67.50	9.81	79.00	11.48	1.67