Amended Finance Bill 2018: additions made in list of imports subjected to minimum tax

The amended Finance Bill 2018 has made additions in the list of imports subjected to minimum tax under section 148 of the Income Tax Ordinance 2001. According to the comments made by Tola Associates on changes made vide amended Finance Bill 2018 here on Friday, the section 148 of the Income Tax Ordinance 2001 provides that the tax required to be collected from a person under section 148 shall be minimum tax for a tax year on the import of edible oil; packing material and plastic raw material imported by an industrial undertaking falling under PCT headings 39.01 to 39.12.
The bill proposed to further make addition in the list and proposed that tax required to be deducted under section 148 on import of goods, where goods are sold in the same condition as they were when imported; shall also be minimum tax and not final tax, however, the act has provided that minimum tax shall be 5% of the import value as increased by customs duty, sales tax and federal excise duty.
For example tax @ 5.5% from a corporate commercial importer (8% for non-filer) is collected at the time of import. In such a case, the importer shall calculate and pay its normal tax liability or minimum tax @ 5% of import value; whichever is higher, the tax expert explained.
Moreover, the reduced rate of 1% (1.5% for non-filer), for designated buyer of LNG to import LNG, on behalf of government, has been made available to every person importing LNG.
Top tax expert Ashfaq Tola further explained that the bill proposed to insert a new section 182A, whereby, in case of late filing of return, the person would not be added in the active tax payers list even after filing of the return. Moreover, losses for that year shall also not be allowed to be carried forward.
The bill also proposes to delete section 214D, whereby cases of late filers were automatically selected for audit owing to audit incapacity of the FBR.
The act further explains that section 182A shall apply from tax year 2018 and onwards for which the first Active Taxpayers List is to be issued on first day of March 2019. It means that any person who has filed return for tax year 2017 but not filed or late filed return for tax year 2018 will remain in active tax payers list until February 28, 2019, he explained.
The bill proposed to impose restriction on non-filer on registration of motor vehicles, and immovable property.
The act clarifies that in case of imported vehicles, the restriction shall be imposed on first registration only. It means that vehicles may be registered to non-filers subsequently.
The act further clarifies that restriction on registration of immovable property will be applied to properties having values exceeding five million rupees.
The section 236I provides that every educational institution shall collect adjustable advance tax @ 5% of the amount of fee where the annual fee exceeds Rs 200, 000. The act introduces a further exemption to amounts collected by way of scholarships, Ashfaq Tola added.