ISLAMABAD: Federal Board of Revenue (FBR) on Wednesday issued salient features of to highlight amendments to Customs Act, 1969 made through Tax Law (Second Amendment) Ordinance, 2019.
(more…)Tag: Tax Laws (Second Amendment) Ordinance 2019
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Amendment Ordinance: major changes made to ST law
ISLAMABAD: Federal Board of Revenue (FBR) on Wednesday issued salient features of amendment to Sales Tax Act, 1990 made through Tax Law (Second Amendment) Ordinance, 2019.
Following are the salient features of sales tax:
1. Many queries have been received seeking clarification of the term “greenfield industry”. A definition of this term in section 2 of the Sales Tax Act, 1990 has now been inserted in clause 12A.
2. In order to ensure that persons who are required to integrate with the FBR or have been integrated, either do not get themselves integrated or do not make proper compliance and tamper with the systems so installed so as to avoid reporting and recording of production and sales, it has been provided to amend section 33 of the Act to declare such act as an offence and punishable with imprisonment and fine both.
3. Sales tax is levied on the basis of retail price on the items specified in the Third Schedule to the Act. Such retail price is required be printed with retail price. In order to ensure compliance in this respect, and to safeguard revenue associated therewith, it is penalty has been provided and also confiscation of contravening goods by amending section 33 of the Act.
4. In order to safeguard industry in Pakistan and to prevent misuse of exemption, a new section 40D in the Act has been added and amendment in this regard has also been made in section 33 relating to penalties and offences, so as to provide for powers to prescribe documentation in relation to such goods and to examine and check vehicles coming from tax-exempt areas such as AJ&K, Gilgit-Baltistan and Tribal Areas.
5. Section 73 has been amended to provide that a registered manufacturer shall make all taxable supplies to a registered person excluding supplies not exceeding a value of rupees hundred million in a financial year and rupees 10 million in a month.
6. Sales tax on the imported cotton has been enhanced from 5 percent to 10 percent to remove disparity.
7. PCT heading of bricks had been inadvertently mentioned as “6901.1000”, whereas the correct PCT heading is “6901.0000”. Tenth Schedule has been amended to correct the PCT heading.
8. Manufacturers using plant and machinery for in house installation have now been excluded from the purview of the 12th, further refund of 3 percent value addition tax may not be barred if paid on goods used in making of zero-rated supplies.
9. Sales tax on the mobile phones upto the value of 30 US dollars has been reduced from Rs 130 to Rs 100 and phones having value upto 100 US Dollars from Rs 1320 to Rs 200.
10. Definition of tier-1 retailer has been amended in section 2(43A), whereby the Federal Board of Revenue is empowered to add any other category of retailers to tier-1. In view of the higher tariff rates of electricity the conditions to qualify for a Tier 1 retailer have been amended so as to increase the threshold of electricity consumption from Rs 600,000 to Rs 1200,000.
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Tax Amendment Ordinance: Salient features of changes introduced to income tax law
ISLAMABAD: Federal Board of Revenue (FBR) on Wednesday issued salient features of amendment to Income Tax Ordinance, 2001 made through Tax Law (Second Amendment) Ordinance, 2019.
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Customs officials empowered using firearms in the line of duty
ISLAMABAD: The government has authorized customs officials to use firearms in the line of duty to prevent smuggling and other illegal activities.
In this regard a new sub-section 3 has been inserted to Customs Act, 1969 through Tax Laws (Second Amendment) Ordinance, 2019.
Federal Board of Revenue (FBR) on Wednesday issued ‘Tax Laws (Second Amendment) Ordinance, 2019’ have been promulgated through the presidential order.
The new sub-section shall be read as follow:
“(3) For the execution of the above, the officers or officials shall be empowered to use all necessary force including use of firearms subject to Section 97 of the Pakistan Penal Code, 1860 in the line of duty.”
Under Section 164 of the Customs Act, 1969, the customs officials were empowered to stop and search conveyances.
The Section 164 is read as:
164. Power to stop and search conveyances.- (1) Where the appropriate officer has reason to believe that within the territories of Pakistan(including territorial waters) any conveyance has been, is being or is about to be, used in the smuggling of any goods or in the carriage of any smuggled goods, he may at any time stop any such conveyance or, in the case of an aircraft, compel it to land, and –
(a) rummage and search any part of the conveyance;
(b) examine and search any goods thereon; and
(c) break open the lock of any door, fixture or package for making search.
(2) Where in the circumstances referred to in sub-section (1)-
(a) it becomes necessary to stop any vessel or compel any aircraft to land, it shall be lawful of any vessel or aircraft in the service of the Government while flying her proper flag or bearing flag marks and any authority authorized in this behalf by the Federal Government to summon such vessel to stop or the aircraft to land, by means of an international signal, code or other recognized means, and thereupon such vessel shall forthwith stop or such aircraft shall forthwith land, and if it fails to do so chase may be given thereto by any vessel or aircraft as aforesaid and if after a gun is fired as a signal, the vessel fails to stop or the aircraft fails to land, it may be fired upon;
(b) it becomes necessary to stop any conveyance other than a vessel or aircraft, the appropriate officer may use or cause to be used all lawful means for stopping it or preventing its escape including, if all other means fail, firing upon it.
The new sub-section shall be included:
“(3) For the execution of the above, the officers or officials shall be empowered to use all necessary force including use of firearms subject to Section 97 of the Pakistan Penal Code, 1860 in the line of duty.”
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Tax Amendment Ordinance: 14-year jail, penalty of ten time of value for currency smuggling
ISLAMABAD: The government has introduced very harsh penalties for offence of currency smuggling. The government enhanced the jail term to 14 years for currency smuggling above $200,000 besides ten time of value of the currency would be recovered as penalty.
Federal Board of Revenue (FBR) on Wednesday issued ‘Tax Laws (Second Amendment) Ordinance, 2019’ have been promulgated through the presidential order.
The following are the penal action for offences/smuggling introduced through the ordinance by amending Customs Act, 1969:
(a) If the amount of the currency over and above the permissible limit is up to $10,000 or equivalent in value (currency of other denomination) etc.
Such currency shall be liable to confiscation and any person concerned in the offence shall be liable to a penalty not exceeding the value of the excess amount of the currency.
(b) If the amount of the currency over and above the permissible limit is up to $10,001 to $20,000 or equivalent in value (currency of other denomination) etc.
Such currency shall be liable to confiscation and any person concerned in the offence shall be liable to a penalty not exceeding two times the value of the excess amount of the currency.
(c) If the amount of the currency over and above the permissible limit is $20,001 to $50,000 or equivalent in value (currency of other denomination) etc.
Such currency shall be liable to confiscation and any person concerned in the offence shall be liable to a penalty not exceeding three times the value of the currency; and upon conviction by a Special Judge he shall further be liable to imprisonment for a term not exceeding two years.
(d) If the amount of the currency over and above the permissible limit is $50,001 to $100,000 or equivalent in value (currency of other denomination) etc.
Such currency shall be liable to confiscation and any person concerned in the offence shall be liable to a penalty not exceeding four times the value of the currency; and upon conviction by a Special Judge he shall further be liable to imprisonment for a term not exceeding seven years.
(e) If the amount of the currency over and above the permissible limit is $100,001 to $200,000 or equivalent in value (currency of other denomination) etc.
Such currency shall be liable to confiscation and any person concerned in the offence shall be liable to a penalty not exceeding five times the value of the currency; and upon conviction by a Special Judge he shall further be liable to imprisonment for a term not exceeding ten years. Provided further that the sentence of the imprisonment shall not be less than three years.
(f) If the amount of the currency over and above the permissible limit exceeds $200,000 or equivalent in value (currency of other denomination) etc.
Such currency shall be liable to confiscation and any person concerned in the offence shall be liable to a penalty not exceeding ten times the value of the currency; and upon conviction by a Special Judge he shall further be liable to imprisonment for a term not exceeding fourteen years. Provided further that the sentence of the imprisonment shall not be less than five years.
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Mini-budget implemented through presidential ordinance
ISLAMABAD: The government on Wednesday implemented a mini budget through a presidential ordinance making amendments to all duty and tax statutes.
The amendments to tax laws namely ‘Tax Laws (Second Amendment) Ordinance, 2019’ have been promulgated through the presidential order.
The consultants at Tax Excellence called it mini-budget and highlighted major changes made to Income Tax Ordinance, 2001, Sales Tax Act, 1990, Customs Act, 1969 and Federal Excise Act, 2005.
Now, the Tax Laws (Second) Amendment Ordinance, 2019 has been promulgated on December 26, 2019, which will remain valid for four months, unless extended or approved by the National Assembly.
The ordinance contains several amendments following Sections:
Sales Tax Act, 1990
Section 2(12A): Greenfield Industry
Section 2(43A): Tier-1 Retailer
Section 33: Offences and penalties
Section 40D: Provisions relating to goods supplied from tax-exempt areas
Section 73: Certain transactions not admissible
Section 76: Fee and service charges
Sixth Schedule: Table-1 (Imports or Supplies) [Exempt Supplies]
Eighth Schedule: Table-1 [Reduced Rate]
Ninth Schedule: Special provisions relating to traders [major change for traders]
Tenth Schedule: Rule for persons not appearing in Active Taxpayers list
12TH Schedule: Value-Addition Tax [major procedural changes]
Income Tax Ordinance, 2001
Section 2(27A): greenfield industrial undertaking [definition inserted-major impact & applicable from 1.7.19]
Section 130: Appellate Tribunal [major change]
Section 152: Payments to non-residents [major change]
Section 181D: Business licence scheme. [major change]
Section 214E: Closure of audit. [major change]
Section 216: Disclosure of information by a public servant
Section 222A: Fee and service charges
Section 230E: Directorate General of International Tax Operations [major change]
First Schedule: Part-I, II & III [major changes]
Second Schedule: Part-I, II, III & IV [major changes]
10TH Schedule: Rule 10 Clause (ba) inserted
Federal Excise Act, 2005
Section 49: Fee and service charges
Customs Act, 1969
Section 3CCA: Directorate General of Law and Prosecution” [newly inserted]
Section 6: Entrustment of functions of customs officers to certain other officers
Section 7: Assistance to the officers of customs.
Section 139: Declaration by passenger or crew of baggage
Section 156: Punishment for offences [major changes]
Section 164: Power to stop and search conveyances.
Section 169: Things seized how dealt with
Section 185A: Cognizance of offences by Special Judges
Section 194: Appellate Tribunal [section substituted]
Section 196: Reference to High Court