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Tag: Twelfth Schedule

  • FBR notifies rules to implement new tax regime for imported goods

    FBR notifies rules to implement new tax regime for imported goods

    ISLAMABAD: Federal Board of Revenue (FBR) on Wednesday notified rules to implement new taxation regime on import of goods, which was introduced through Twelfth Schedule of Income Tax Ordinance, 2001.

    The FBR issued SRO 715(I)/2020 to notify the rules for implementation of new tax rates on import of goods.

    Through Finance Act, 2020 new 12th Schedule was introduced for rationalizing tax on imports by shifting from person-specific rates to goods specific rates cascaded according to  the  type of  goods,  with  tax  at 1 percent  for  capital  goods,  2 percent  for  raw  materials  and 5.5 percent  for  finished  goods  irrespective  of  status  of  the  importer.

    However,  the prevailing  concessional  rates  on  certain  items  such  as  remeltable  scrap  of  iron and  steel,  potassic  and  urea  fertilizers,  LNG,  Gold,  Cotton,  goods  that  were importable  by  manufacturers  under  the  rescinded  SRO  1125(I)/2011  dated 31.12.2011, mobile phones etc. are being maintained.

    The provisions of the new rules introduced to Income Tax Rules, 2002 will apply to addition, omission or amendment of entries in the Twelfth Schedule and application of reduced rate on goods falling under Part III of the schedule imported by persons as raw material for its own use.

    A three-member committee headed by Member Inland Revenue Policy, FBR has been constituted under the new rules. The other two members shall comprise of Member Inland Revenue Operations and Member Taxpayers Audit.

    The committee has been empowered to add in the Twelfth Schedule of the Ordinance any entry or omit any entry therefrom or amend any entry therein.

    Further, the chairperson of the committee may, suo motor or an application of a taxpayer being an importer of such goods, place a matter before the committee by way of convening a meeting including a virtual meeting or by way of circulation which shall decide the matter within sixty days.

    The FBR also issued procedure for import under an exemption certificate and a reduced rate certificate.

  • FBR withdraws 3pc value addition tax on imported consumer items

    FBR withdraws 3pc value addition tax on imported consumer items

    ISLAMABAD: Federal Board of Revenue (FBR) has withdrawn three percent minimum value addition tax on import of consumer items on which sales tax is paid on retail basis.

    The FBR on Friday issued SRO 1321(I)/2019 and amended the Twelfth Schedule of Sales Tax Act, 1990 under which three percent minimum value addition sales tax has been imposed on all imported goods subject to exclusions.

    As per the amendment the FBR withdrew the imposition of minimum value addition tax on import of goods specified in the Third Schedule of the Sales Tax Act, 1990.

    Following is Third Schedule to Sales Tax in which consumer items are mentioned for collection of sales tax on the basis of printed retail price:

    • Fruit juices and vegetable juices.
    • Ice Cream.
    • Aerated waters or beverages.
    • Syrups and squashes.
    • Cigarettes.
    • Toilet soap
    • Detergents
    • Shampoo
    • Toothpaste
    • Shaving cream
    • Perfumery and cosmetics.
    • Tea
    • Powder drinks
    • Milky drinks
    • Toilet paper and tissue paper
    • Spices sold in retail packing bearing brand names and trade marks
    • Shoe polish and shoe cream
    • Fertilizers
    • Cement sold in retail packing
    • Mineral/bottled water
    • Household electrical goods, including air conditioners, refrigerators, deep freezers, televisions, recorders and players, electric bulbs, tube-lights, electric fans, electric irons, washing machines and telephone sets.
    • Household gas appliances, including cooking range, ovens, geysers and gas heaters.
    • Foam or spring mattresses and other foam products for household use.
    • Paints, distempers, enamels, pigments, colours, varnishes, gums, resins, dyes, glazes, thinners, blacks, cellulose lacquers and polishes sold in retail packing
    • Lubricating oils, brake fluids, transmission fluid, and other vehicular fluids sold in retail packing.
    • Storage batteries excluding those sold to
    • Automotive manufacturers or assemblers
    • Tyres and tubes excluding those sold to automotive manufacturers or assemblers
    • Motorcycles
    • Auto rickshaws
    • Biscuits in retail packing with brand name
    • Tiles
    • Auto-parts, in retail packing, excluding those sold to automotive manufacturers or assemblers.

    Procedure and conditions under the Twelfth Schedule has been defined as:

    (1) The sales tax on account of minimum value addition as payable under this Schedule (hereinafter referred to as value addition tax), shall be levied and collected at import stage from the importers on all taxable goods as are chargeable to tax under section 3 of the Act or any notification issued thereunder at the rate specified in the Table in addition to the tax chargeable under section 3 of the Act or a notification issued thereunder:

    Prior to the latest amendment the value addition tax under this Schedule shall not be charged on:

    (i) Raw materials and intermediary goods meant for use in an industrial process which are subject to customs duty at a rate less than 16% ad valorem under First Schedule to the Customs Act, 1969;

    (ii) The petroleum products falling in Chapter 27 of Pakistan Customs Tariff as imported by a licensed Oil Marketing Company for sale in the country;

    (iii) Registered service providers importing goods for their in-house business use for furtherance of their taxable activity and not intended for further supply;

    (iv) Cellular mobile phones or satellite phones;

    (v) LNG / RLNG;

    (vi) Second hand and worn clothing or footwear (PCT Heading 6309.000);

    (vii) Gold, in un-worked condition; and

    (viii) Silver, in un-worked condition.”