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Tag: Tax Laws (Third Amendment) Ordinance 2021

  • Operator of online market place to withhold sales tax

    Operator of online market place to withhold sales tax

    ISLAMABAD: The operator of the online market place has been made liable to withholding sales tax on sales of goods.

    An important amendment has been made through Tax Laws (Third Amendment) Ordinance, 2001, which was promulgated on September 15, 2021 through a presidential order.

    A new proviso has been inserted to Section 3 of the Sales Tax Act, 1990 to make an operator of market place to withhold sales tax.

    The text of the new proviso is:

    “Provided that in case of the online market place facilitating the sale of third party goods, the liability to withhold tax on taxable supplies of such party at the rates specified in column (4) against S. No. 8 of the Eleventh Schedule to this Act, shall be on the operator of such market place.”

    According to the Eleventh Schedule of the Sales Tax Act, 1990, the online market place shall collect from persons other than active taxpayers the withholding sales tax at the rate of 2 per cent of gross value of supplies:

    Provided that the provisions of this entry shall be effective from the date as notified by the Board [Federal Board of Revenue].

    A new clause 18A was inserted to Section 2 of the Sales Tax Act, 1990 through Finance Act, 2021 to bring online market place under sales tax ambit.

    The text of clause 18A is:

    “(18A) online market place: includes an electronic interface such as a market place, e-commerce platform, portal or similar means which facilitate sale of goods, including third party sale, in any of the following manner, namely:–

    (a) by controlling the terms and conditions of the sale;

    (b) authorizing the charge to the customers in respect of the payment for the supply; or

    (c) ordering or delivering the goods.”

    Provisional valuation disallowed on existing VR
  • Provisional valuation disallowed on existing VR

    Provisional valuation disallowed on existing VR

    ISLAMABAD: Importers will not be allowed to avail of the facility of provision valuation for goods declaration when the valuation of such goods is already in the field.

    An important amendment has been made into Customs Act, 1969 through Tax Laws (Third Amendment) Ordinance, 2021, which was promulgated through presidential order on September 15, 2021.

    A proviso has been inserted to Section 81 of the Customs Act, 1969 to disallow provisional valuation.

    Following is the amended text of Section 81:

    81. Provisional determination of liability.- (1) Where it is not possible for an officer of Customs during the checking of the goods declaration to satisfy himself of the correctness of the assessment of the goods made under section 79 or 131, for reasons that the goods require chemical or other test or a further inquiry, an officer, not below the rank of Assistant Collector of Customs, may order that the duty, taxes and other charges payable on such goods, be determined provisionally:

    Provided that the importer, save in the case of goods entered for warehousing, pays such additional amount on the basis of provisional assessment or furnishes corporate guarantee or pay order of a scheduled bank along with an indemnity bond for the payment thereof as the said officer deems sufficient to meet the likely differential between the final determination of duty, taxes and other charges over the amount determined provisionally:

    Provided further that there shall be no provisional assessment under this section if no differential amount of duty and taxes and other charges is paid or secured against corporate guarantee or pay order.

    Following is the new proviso added to Section 81:

    “Provided further that no provisional determination of value shall be allowed in those cases where a valuation ruling (VR) is in the field, irrespective of the fact whether any review or revision against that VR is pending in terms of section 25D or relevant rules, as the case may be.”

    Customs restricted to reopen assessment of consignment
  • Customs restricted to reopen assessment of consignment

    Customs restricted to reopen assessment of consignment

    The Customs authorities have been restricted from reopening the assessment of consignment clearance based on incorrect information after a three-year period.

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  • Member Customs to make orders in valuation rulings

    Member Customs to make orders in valuation rulings

    The Tax Laws (Third Amendment) Ordinance, 2021 has granted enhanced powers to the Member Customs, allowing them to annul or modify orders previously passed by the Director-General of Customs Valuation.

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  • Penalty amount doubles for non-filer salaried persons

    Penalty amount doubles for non-filer salaried persons

    ISLAMABAD: The Federal Board of Revenue (FBR) will recover a minimum amount of Rs10,000 as a penalty from salaried persons, who failed to file an income tax return during a tax year.

    The minimum penalty has been increased from Rs5,000 to Rs10,000.

    The changes have been brought through Tax Laws (Third Amendment) Ordinance, 2021, which was promulgated through Presidential order on September 15, 2021. The amendment has been introduced to Section 182(1) of the Income Tax Ordinance, 2001.

    According to the amendment, where any person fails to furnish a return of income as required under Section 114 within the due date:

    “Such person shall pay a penalty equal to higher of –

    (a) 0.1 per cent of the tax payable in respect of that tax year for each day of default; or

    (b) rupees one thousand for each day of default:

    Provided that minimum penalty shall be —

    (a) rupees ten thousand in case of individual having seventy-five percent or more income from salary; or

    (b) rupees fifty thousand in all other cases:

    Provided further that maximum penalty shall not exceed two hundred percent of tax payable by the person in a tax year:

    Provided also that the amount of penalty shall be reduced by 75 per cent, 50 per cent and 25 per cent if the return is filed within one, two and three months respectively after the due date or extended due date of filing of return as prescribed under the law;

    Explanation.— For the purposes of this entry, it is declared that the expression “tax payable” means tax chargeable on the taxable income on the basis of assessment made or treated to have been made under sections 120, 121, 122 or 122D.

    The following link provides previous penalty amount for not furnishing returns:

    Penalty for non-filing tax return and wealth statement

  • Domestic electricity consumers to pay 35% additional AIT

    Domestic electricity consumers to pay 35% additional AIT

    The federal government of Pakistan has introduced an additional advance income tax (AIT) of up to 35% on the consumption of electricity by individuals not appearing on the Active Taxpayers List (ATL).

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  • NADRA to compute indicative income, tax liability

    NADRA to compute indicative income, tax liability

    ISLAMABAD: National Database and Registration Authority (NADRA) has been empowered to compute indicative income and tax liability of persons using artificial intelligence and other modes.

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  • FBR to block mobile phones of non-filers

    FBR to block mobile phones of non-filers

    ISLAMABAD: The Federal Board of Revenue (FBR) has been empowered under income tax statute to block mobile phones or mobile phone SIMs of persons who have taxable income but remained non-filer of annual return.

    The government promulgated Tax Laws (Third Amendment) Ordinance, 2021, and made major amendments to the Income Tax Ordinance, 2001.

    As per the amendments, the FBR has been empowered to take strict actions against non-filers, including blocking mobile phones or mobile phone SIMs. Besides, the tax authorities have also powers to give orders to utility companies for discontinuations of electricity connection and gas connection of non-filer.

    Section 114B has been introduced through the Tax Law to the Income Tax Ordinance, 2001.

    Following is the text of the new Section:

    “114B. Powers to enforce filing of returns. — (1) Notwithstanding anything contained in any other law for the time being in force, the Board shall have the powers to issue income tax general order in respect of persons who are not appearing on Active Taxpayers List (ATL) but are liable to file return under  the provisions of this Ordinance.

    (2) The income tax general order issued under sub-section (1) may entail any or all of the following consequences for the persons mentioned therein, namely:-

    — disabling of mobile phones or mobile phone sims;

    — discontinuance of electricity connection; and

    — discontinuance of gas connection.

    (3) The Board or the Commissioner having jurisdiction over the person mentioned in the income tax general order may order restoration of mobile phones, mobile phone sims and connections of electricity and gas, in cases where he is satisfied that —

    (a) the return has been filed; or

    (b) person was not liable to file return under the provisions of this Ordinance.

    (4) No person shall be included in the general order under sub-section (1) unless following conditions have been met with, namely:-

    (a) notice under sub-section (4) of section 114 has been issued;

    (b) date of compliance of the notice under sub-section (4) of section 114 has elapsed; and

    (c) the person has not filed the return.

    (5) The action under this section shall not preclude any other action provided under the provisions of this Ordinance.

    Businesses require displaying NTN