A BILL to give effect to the financial proposals of the Federal Government for the year beginning on the first day of July, 2018, and to amend certain laws
WHEREAS it is expedient to make provisions to give effect to the financial proposals of the Federal Government for the year beginning on the first day of July, 2018, and to amend certain laws for the purposes hereinafter appearing;
It is hereby enacted as follows:-
1. Short title, extent and commencement. - (1) This Act may be called the
Finance Act, 2018.
(2) It extends to the whole of Pakistan.
(3) It shall come into force on the first day of July, 2018 except clauses 3(2), 3(3), 3(19), 3(20), 3(22) 6(11)(a) & 6(11)(b) which shall have effect on the next day of assent given to this Act by the President of Islamic Republic of Pakistan.
2. Amendment of Petroleum Products (Petroleum Levy) Ordinance, 1961 (XXV of 1961.- In the Petroleum Products (Petroleum Levy) Ordinance, 1961 (XXV of 1961), for the Fifth Schedule, the following shall be substituted, namely:-
"The Fifth Schedule [See sections 3(1) and 7]
=====================================================================
S.No. Petroleum Products Unit Maximum Petroleum
Levy Rate (Rupees
per Unit)
=====================================================================
(1) (2) (3) (4)
=====================================================================
1. High Speed Diesel Oil Litre 30
(HSDO)
2. Motor Gasoline Litre 30
3. Superior Kerosene Oil (SKO) Litre 30
4. Light Diesel Oil (LDO) Litre 30
5. High Octane Blending Litre 30
Component (HOBC)
6. E-10 Gasoline Litre 30
7. Liquefied Petroleum Gas Metric 20,000".
(produced/extracted in Ton
Pakistan)
=====================================================================
3. Amendments of Customs Act, 1969 (IV of 1969). - In the Customs Act, 1969
(IV of 1969), the following further amendments shall be made, namely:-
(1) in section 2,-
(a) in clause (p), for the word "twelve", the words "twenty-four" shall be substituted; and
(b) in clause (pa), after the word "includes", the words and comma "a local manufacturer," shall be inserted;
(2) in section 18,-
(a) in sub-section (3), for the expression and comma "Board, with approval of the Federal Minister-in-charge", the words "Federal Government" shall be substituted; and
(b) in sub-section (5), in the proviso, the expression ", (3)" shall be omitted;
(3) in section 19,-
(a) in sub-section (1), for the expression "Board, with approval of the Federal Minister-in-charge pursuant to the approval of the Economic Coordination Committee of Cabinet", the words "Federal Government" shall be substituted; and
(b) in sub-section (5), in the second proviso, for the figure "2018", the figure "2019" shall be substituted;
(4) after section 25A, the following new section shall be inserted, namely:-
"25AA. Power to use data exchange information for determination of customs value.- Any information or data, obtained under clause (b) of sub-section (1) of section 219A, may be utilized for the purpose of assessment including valuation.";
(5) in section 25C, in sub-section (1), for the word "Board", the words "Chief Collector" shall be substituted;
(6) in section 32, in sub-section (3), in the proviso, for full stop at the end a colon shall be substituted and thereafter the following second proviso shall be added, namely:-
"Provided further that the aforesaid action shall also not be initiated in case full amount of short paid duty, taxes or other charges are paid voluntarily prior to initiation of audit inquiry or investigation.";
(7) in section 33, after sub-section (3), the following new sub-section shall be inserted, namely:-
"(3A) The claim filed under this section shall be disposed of within a period not exceeding one hundred and eighty days from the date of filing of such claim:
Provided that the said period may, for reasons to be recorded in writing, be extended by the Collector of Customs for a period not exceeding ninety days.";
(8) in section 42, in sub-section (2), in the second proviso, in clause (a),-
(a) for the word "give", the word "deliver" and for the word "notice", the word "information" shall be substituted;
(b) in sub-clause (iii), for the word "crew", the words "passengers and crew manifest" shall be substituted; and
(c) in sub-clause (iv), after the word "passengers", the words "and crew name record information" shall be inserted;
(9) in section 55, in sub-section (1), in clause (e), after the words "delivery", the words "or other dues in connection with discharge and delivery of goods" shall be inserted";
(10) after section 83, the following new section shall be inserted, namely:-
"83B. Provisional release of imported goods.- Where any offence is detected in respect of imported goods which are not liable to confiscation or needed for evidence at a later stage, the Collector of Customs may, on written request of owner of the goods, allow release of the same on payment of duty, taxes or other charges and furnishing bank guarantee or pay order against the amount of any penalty or fine which may be imposed on such goods.";
(11) in section 138, in sub-section (1), after the word and comma "consignee,", the words "or where consignee has dishonored his commitments" shall be inserted;
(12) in section 156, in the TABLE,-
(a) in clause 12A, in column (3), after the figure and letter "26A", the expression "and 155M" shall be inserted; and
(b) for clause 63 and entries relating thereto in columns (1), (2) and (3), the following new clause and entries related thereto shall be substituted, namely:-
===============================================================
"63 (i) If any goods such goods and the 121
which are loaded conveyance illegally
for carrying these goods
transshipment, shall be liable to
are pilfered, confiscation and any
replaced en-route person including the
or failed to reach custodian and the
the port of bonded carrier shall be
destination, or liable to a penalty not
any person exceeding ten times the
tranships goods value of the goods and
not allowed to be he shall further be liable,
transshipped: upon conviction by a
Special Judge, to
imprisonment for a term
not exceeding seven
years;
(ii)If any person such person including 121";
contravenes any the custodian and the
rule relating to inland carrier shall be
transshipment liable to penalty not
other than exceeding five hundred
mentioned in thousand rupees or
clause (i), three times the amount
of duties and taxes
involved.
===============================================================
(13) in section 182, for the words "officer who orders confiscation", the words "officer or person authorized by the Collector or Director" shall be substituted;
(14) in section 193A, after sub-section (2), the following new sub-section shall be inserted, namely:-
"(2A) The Collector (Appeals) may, for a period not exceeding thirty days, stay recovery of duty and taxes on filing of appeal and after affording opportunity of being heard to the officer of the concerned Collectorate or Directorate.";
(15) in section 194B, in sub-section (3), for the word and comma "Controller,", the word "Director" shall be substituted;
(16) in section 207, after the word "agent", the words "or a shipping agent", shall be inserted;
(17) after section 212, the following new section shall be inserted; namely:-
"212A.- Authorized economic operator programme.- The
Federal Government may, by notification in the official Gazette, devise authorized economic operator programme to provide facilitations relating to secure supply chains of imported and exported goods through simplified procedures with regard to regulatory controls applicable thereon.
(2) The Board may, with approval of the Federal Government, prescribe rules on matters pertaining to authorized economic operator programme.";
(18) in section 219, after sub-section (3), the following new sub-section shall be inserted, namely:-
"(3A). Rules made under this section shall be subject to the condition of previous publication.";
(19) in section 221A, the provision thereof shall be numbered as sub-section
(1) thereof and after sub-section (1), as aforesaid, the following new sub- section shall be added, namely:-
"(2) Notwithstanding any order or judgment of any court, a High Court and the Supreme Court, the regulatory duty already levied, collected and realized in exercise of any powers under this Act, before the commencement of the Finance Act, 2018 and after the commencement of the Finance Act, 2017, shall be deemed to have been validly levied, collected and realized under this Act, in exercise of the powers conferred on the commencement of the Finance Act, 2018, and where any such regulatory duty has not been levied, collected or realized, the same shall be recoverable in accordance with the provisions of this Act.";
(20) the amendments set out in the First Schedule to this Act shall be made in the First Schedule to the Customs Act, 1969 (IV of 1969);
(21) in the Third Schedule, after item 22B, the following new item shall be inserted, namely:-
"22C. Matters pertaining to Authorized Economic Operator (AEO) programme, including criteria for granting status of AEO to an applicant, suspension and revocation of the AEO status; and the extent of benefits under AEO programme."; and
(22) the Fifth Schedule to the Customs Act, 1969 (IV of 1969), shall be substituted in the manner provided for in the Second Schedule to this Act.
4. Amendments of the Sales Tax Act, 1990. -. In the Sales Tax Act, 1990, the following further amendments shall be made, namely:-
(1) in section 3,-
(1)
(a) in sub-section (1A), for the word "two", the word "three" shall be substituted;
(b) in sub-section (2), in clause (b), for the words "Board with the approval of the Federal Minister-in-charge", the words "Federal Government" shall be substituted;
(c) in sub-section (3A), for the words "Board with the approval of the Federal Minister-in-charge", the words "Federal Government" shall be substituted; and
(d) in sub-section (5), for the words "Board with the approval of the Federal Minister-in-charge", the words "Federal Government" shall be substituted;
(2) in section 4, in clause (c), for the words "Board with the approval of the Federal Minister-in-charge", the words "Federal Government" shall be substituted;
(3) in section 7,-
(a) in sub-section (3), for the words "Board with the approval of the Federal Minister-in-charge", the words "Federal Government" shall be substituted; and
(b) in sub-section (4), for the words "Board with the approval of the Federal Minister-in-charge", the words "Federal Government" shall be substituted;
(4) in section 7A,-
(4)
(a) in sub-section (1), for the words "Board with the approval of the Federal Minister-in-charge", the words "Federal Government" shall be substituted; and
(b) in sub-section (2), for the words "Board with the approval of the Federal Minister-in-charge", the words "Federal Government" shall be substituted;
(5) in section 8, in sub-section (1),-
(a) in clause (b), for the words "Board with the approval of the Federal Minister-in-charge", the words "Federal Government" shall be substituted;
(b) after clause (l), the following new clause (m) shall be added, namely:-
"(m) import of scrap of compressors falling under PCT heading 7204.4940".;
(6) after section 11A, the following new section 11B shall be inserted, namely:-
"11B. Assessment giving effect to an order.- (1) Except where sub-section (2) applies, where, in consequence of, or to give effect to, any finding or direction in any order made under Chapter-VIII by the Commissioner (Appeals), Appellate Tribunal, High Court or Supreme Court an order of assessment of tax is to be issued to any registered person, the Commissioner or an officer of Inland Revenue empowered in this behalf shall issue the order within one year from the end of the financial year in which the order of the Commissioner (Appeals), Appellate Tribunal, High Court or Supreme Court, as the case may be, was served on the Commissioner or officer of Inland Revenue.
(2) Where, by an order made under Chapter-VIII by the Appellate Tribunal, High Court or Supreme Court, an order of assessment is set aside wholly or partly and the Commissioner or Commissioner (Appeals) or officer of Inland Revenue, as the case may be, is directed to pass a new order of assessment, the Commissioner or Commissioner (Appeals) or officer of Inland Revenue, as the case may be, shall pass the new order within one year from the end of the financial year in which the Commissioner or Commissioner (Appeals) or officer of Inland Revenue, as the case may be, is served with the order:
Provided that limitation under this sub-section shall not apply, if an appeal or reference has been preferred against the order passed by Appellate Tribunal or a High Court.
(7) in section 13, in sub-section (2), in clause (a), the expression "with the approval of the Federal Minister-in-charge" shall be omitted;
(8) in section 25, in sub-section (2), in the second proviso, for the full stop at the end, a colon shall be substituted and thereafter the following new proviso shall be added, namely:-
"Provided also that audit under this section shall be conducted only once in every three years.";
(9) for section 30A, the following shall be substituted, namely:-
"30A. Directorate General (Intelligence and Investigation), Inland Revenue.- (1) The Directorate General (Intelligence and Investigation) Inland Revenue shall consist of a Director General and as many Directors, Additional Directors, Deputy Directors and Assistant Directors and such other officers as the Board may, by notification in the official Gazette, appoint.
(2) The Board may, by notification in the official Gazette,-
(a) specify the functions and jurisdiction of the Directorate General and its officers; and
(b) confer the powers of authorities specified in section 30 upon the Directorate General and its officers.";
(10) in section 34, in sub-section (1), in clause (a), for the expression "KIBOR plus three", the word "twelve" shall be substituted;
(11) in section 40B,-
(a) the words "or Chief Commissioner" shall be omitted; and
(b) for the colon at the end, a full stop shall be substituted and thereafter the proviso and the explanation shall be omitted;
(12) for section 47A, the following shall be substituted, namely:-
"47A. Alternative dispute resolution.- (1) Notwithstanding any other provision of this Act or the rules made thereunder, an aggrieved person, who has filed an appeal which is pending before an Appellate Authority, may apply to the Board for the appointment of a committee for the resolution of any hardship or dispute mentioned in detail in the application, except where prosecution proceedings have been initiated or where interpretation of question of law having effect on identical other cases is involved.
(2) The Board after examination of the application of an aggrieved person shall, within sixty days of receipt of such application in the Board, appoint a committee consisting of an officer of Inland Revenue not below the rank of Commissioner and two persons from a panel comprising of retired High Court judges, retired District and Session Judges, Chartered or Cost Accountants, Advocates, Income Tax Practitioners or reputable taxpayers for the resolution of the hardship or dispute.
(3) The aggrieved person and the Board, as the case may be, shall withdraw the appeal pending before the appellate authority.
(4) The committee shall not commence the proceeding under sub-section (2) unless the order of withdrawal from the appellate authority is communicated to the Board:
Provided that if the order of withdrawal is not communicated within seventy-five days of the appointment of the committee, the said committee shall be dissolved and this section shall not apply.
(5) The committee appointed under sub-section (2) shall examine the issue and may, if it deems necessary, conduct inquiry, seek expert opinion, direct any officer of the Inland Revenue or any other person to conduct an audit and shall decide the dispute by majority, within one hundred and twenty days of its appointment:
Provided that in computing the aforesaid period of one hundred and twenty days, the period, if any, for communicating the order of withdrawal under sub-section (3) shall be excluded.
(6) The decision of the committee made under sub-section (5) shall be binding on the Board and the aggrieved person.
(7) If the committee fails to decide the dispute within the period of one hundred and twenty days under sub-section (5), the Board shall dissolve the committee by an order in writing and the matter shall be decided by the appellate authority, which issued the order of withdrawal under sub-section (3) and the appeal shall be treated to be pending before such appellate authority as if the appeal had never been withdrawn.
(8) The Board shall communicate the order of dissolution to the appellate authority mentioned in sub-section (1) and the Commissioner.
(9) The aggrieved person may make the payment of sales tax and other taxes as decided by the committee under sub-section (5) and all decisions, orders and judgments made or passed shall stand modified to that extent and all proceedings under this Act or the rules made thereunder by any authority shall abate.
(10) The Board may, by notification in the official Gazette, make rules for carrying out the purposes of this section.";
(13) in section 48, in sub-section (1), in the proviso, for the words "twenty-five", the word "ten" shall be substituted;
(14) in section 58, for the expression "Companies Ordinance, 1984 (XLVII of 1984", the expression "Companies Act, 2017 (XIX of 2017)" shall be substituted;
(15) in section 60, for the words "Board with the approval of the Federal Minister-in-charge", the words "Federal Government" shall be substituted;
(16) in section 65, for the words "Board with the approval of the Federal Minister-in-charge", the words "Federal Government" shall be substituted;
(17) in section 71, in sub-section (1), for the words "Board with the approval of the Federal Minister-in-charge", the words "Federal Government" shall be substituted;
(18) in section 74A,-
(a) the existing provision thereof shall be numbered as sub-section (1) of that section;
(b) in sub-section (1), numbered as aforesaid, for the figure "2017", the figure "2018" shall be substituted; and
(c) after sub-section (1), numbered and amended as aforesaid, the following new sub-section (2) shall be added, namely:-
"(2) Notwithstanding any omission, irregularity or deficiency in the establishment of or conferment of powers and functions on the Directorate General (Intelligence and Investigation), Inland Revenue and authorities specified in section 30A, all orders passed, notices issued and actions taken, before commencement of the Finance Act, 2018, in exercise or purported exercise of the powers and functions of the officers of Inland Revenue under this Act by the Director General (Intelligence and Investigation), Inland Revenue or the authorities specified in section 30A shall be deemed to have been validly passed, issued and taken under this Act.";
(19) in the Fifth Schedule, in column (1), against serial number 12, in column (2), after clause (xix), the following new clauses shall be added, namely:-
===============================================================================
"(xx) Colors in sets (PCT heading 3213.1000).
(xxi) Writing, drawing and marking inks
(PCT heading. 3215.9010 and 3215.9090)
(xxii) Erasers (PCT heading 4016.9210
and 4016.9290)
(xxiii) Exercise books (PCT heading 4820.2000)
(xxiv) Pencil sharpeners (PCT heading 8214.1000)
(xxv) Geometry boxes (PCT heading 9017.2000)
(xxvi) Pens, ball pens, markers and porous tipped pens (PCT heading 96.08)
(xxvii) Pencils including color pencils (PCT heading 96.09)".;
===============================================================================
(20) in the Sixth Schedule,-
(A) in Table-1, in column (1), after serial number 136 and the entries relating thereto in columns (2) and (3), the following new serial numbers and the entries relating thereto shall be added, namely:-
==========================================================================
"137. Paper weighing 60 g/m2 for printing of 4802.5510
Holy Quran imported by Federal or
Provincial Governments and Nashiran-e-
Quran as per quota determined by IOCO
138. Fish Feed Respective
heading
139. Fans for dairy farms 8414.5990
140. Bovine semen 0511.1000
141. Preparations for making animal feed 2309.9000
142. Promotional and advertising material 9920 (3)
including technical literature, pamphlets,
brochures and other give-aways of no
commercial value, distributed free of cost
by the exhibitors
143. (i) Hearing aids (all types and kinds) (ii) 9937
Hearing assessment equipment;
(a) Audiometers
(b) Tympanometer
(c) ABR
(d) Oto Acoustic Omission
144. Liquefied Natural Gas imported by 2711.1100.;
fertilizer manufacturers for use as feed
stock
145. Plant, machinery, equipment including Respective
dumpers and special purpose motor heading
vehicles, if not manufactured locally,
imported by M/s China State
Construction Engineering Corporation
Limited (M/s CSCECL) for the
construction of Karachi - Peshawar
Motorway (Sukkur - Multan Section) and
M/s China Communication Construction
Company (M/s CCCC) for the
construction of Karakorum Highway
(KKH) Phase-II (Thakot-Havellian
Section) subject to the following
conditions:
(i) that the exemption under this
Notification shall only be available
to contractors named above;
(ii) that the equipment and
construction machinery imported
under this Notification shall only
be used for the construction of the
respective allocated projects;
(iii) that the importer shall furnish an
indemnity bond, in the prescribed
manner and format as set out in
Annex-A, at the time of import to
the extent of customs-duties
exempted under this Notification
on consignment to consignment
basis;
(iv) that the Ministry of
Communications shall certify in
the prescribed manner and format
as set out in Annex-B that the
imported equipment and
construction machinery are
bonafide requirement for
construction of Sukkur - Multan
Section (392.0 km) of Karachi -
Peshawar Motorway or for the
construction of Karakorum
Highway (KKH) Phase-II-Thakot
to Havellian Section (118.057 km)
as the case may be;
(v) for the clearance of imported
goods through Pakistan Customs
Computerized System the
authorized officer of the Ministry
shall furnish all relevant
information, as set out in Annex-
B, online against a specific user
ID and password obtained under
section 155D of the Customs Act,
1969 (IV of 1969). In Collectorates
or Customs stations where the
Pakistan Customs Computerized
System is not operational, the
Director Reforms and Automation
or any other person authorized by
the Collector in this behalf shall
enter the requisite information in
the Pakistan Customs
Computerized System on daily
basis, whereas entry of the data
obtained from the customs
stations which have not yet been
computerized shall be made on
weekly basis;
(vi) that the equipment and
construction machinery, imported
under this Notification, shall not
be re-exported, sold or otherwise
disposed of without prior approval
of the FBR. In case goods are
sold or otherwise disposed of with
prior approval of FBR the same
shall be subject to payment of
duties as may be prescribed by
the FBR;
(vii) in case the equipment and
construction machinery, imported
under this Notification, is sold or
otherwise disposed of without
prior approval of the FBR in terms
of para (vi) above, the same shall
be subject to payment of statutory
rates of customs duties as were
applicable at the time of import;
(viii) notwithstanding the condition at
para (vi) and (vii) above,
equipment and construction
machinery, imported under this
Notification, may be surrendered
at any time to the Collector of
Customs having jurisdiction,
without payment of any customs-
duties, for further disposal as may
be prescribed by the FBR;
(ix) the indemnity bond submitted in
terms of para (iii) above by the
importer shall be discharged on
the fulfillment of conditions
stipulated at para (vi) or (vii) or
(viii) above, as the case may be;
and
(x) that violation of any of the above
mentioned conditions shall render
the goods liable to payable of
statutory rate of customs duties
leviable on the date of clearance
of goods in addition to any other
penal action under relevant
provisions of the law.
146. Equipment, whether or not locally Respective
manufactured, imported by M/s China heading
Railway Corporation to be furnished and
installed in Lahore Orange Line Metro
Train Project subject to the following
conditions:
(a) that the equipment imported under
this Notification shall only be used
in the aforesaid Project;
(b) that the importer shall furnish an
indemnity bond, in the prescribed
manner and format as set out in
Annex-C to this Notification, at the
time of import to the extent of sales
tax exempted under this
Notification on consignment to
consignment basis;
(c) that the Punjab Mass Transit
Authority, established under the
Punjab Mass Transit Authority Act,
2015 (ACT XXXIII of 2015),
hereinafter referred as the
Regulatory Authority, shall certify in
the prescribed manner and format
as set out in Annex-D to this
Notification that the imported
equipment is bona fide
requirement of the Project under
the Contract No. PMA-CR-
NORINCO-OL, dated 20.04.2015,
hereafter referred as the contract,
signed between the Regulatory
Authority and CR-NORINCO;
(d) in the event a dispute arises
whether any item is entitled to
exemption under this Notification,
the item shall be immediately
released by the Customs
Department against a corporate
guarantee, valid for a period of six
months, submitted by the importer.
A certificate from the Regulatory
Authority duly verified by the
Transport and Communication
Section of the Ministry of Planning,
Development and Reform, that the
item is covered under this
Notification shall be given due
consideration by the Customs
Department towards finally
resolving the dispute. Disputes
regarding the local manufacturing
only shall be resolved through the
Engineering Development Board of
the Federal Government;
(e) for the clearance of imported
equipment through Pakistan
Customs Computerized System
the authorized officer of the
Regulatory Authority shall furnish
all relevant information, as set out
in Annex-D to this Notification,
online against a specific user ID
and password obtained under
section 155D of the Customs Act,
1969 (IV of 1969). In Collectorates
or Customs stations where the
Pakistan Customs Computerized
System is not operational, the
Director Reforms and Automation
or any other person authorized by
the Collector in this behalf shall
enter the requisite information in
the Pakistan Customs
Computerized System on daily
basis, whereas entry of the data
obtained from the customs stations
which have not yet been
computerized shall be made on
weekly basis;
(f) that the equipment, imported under
this Notification, shall not be re-
exported, sold or otherwise
disposed of without prior approval
of the Federal Board of Revenue
(FBR). In case goods are sold or
otherwise disposed of with prior
approval of FBR the same shall be
subject to payment of sales tax as
may be prescribed by the FBR;
(g) in case the equipment, imported
under this Notification, is sold or
otherwise disposed of without prior
approval of the FBR in terms of
condition (f), the same shall be
subject to payment of statutory
rates of sales tax as were
applicable at the time of import;
(h) notwithstanding the condition (f)
and (g), equipment imported under
this Notification may be
surrendered at any time to the
Collector of Customs having
jurisdiction, without payment of any
sales tax, for further disposal as
may be prescribed by the FBR;
(i) the indemnity bond submitted in
terms of condition (b) above shall
stand discharged on submission of
a certificate from the Regulatory
Authority to the effect that the
equipment has been installed or
consumed in the said Project. In
case the equipment is not
consumed or installed in the
project the indemnity bond shall be
discharged on fulfillment of
conditions stipulated at (f) or (g) or
(h), as the case may be; and
(j) that violation of any of the above
conditions shall render the goods
liable to payment of statutory rate
of sales tax leviable on the date of
clearance of goods in addition to
any other penal action under
relevant provisions of the law.
Explanation. For the purpose of this
provision, "equipment" shall mean
machinery, apparatus, materials and all
things to be provided under the contract
for incorporation in the works relating to
Lahore Orange Line Metro Train
Project.";
147. Goods supplied to German Development Respective
Agency (Deutsche Gesellschaft für heading
Internationale Zusammenarbeit) GIZ
148. Imported construction materials and Respective
goods imported by M/s China State heading";
Construction Engineering Corporation
Limited (M/s CSCECL), whether or not
locally manufactured, for construction of
Karachi-Peshawar Motorway (Sukkur-
Multan Section) subject to fulfilment of
same conditions, limitations and
restrictions as are specified under S. No.
145 of this table, provided that total
incidence of exemptions of all duties and
taxes in respect of construction materials
and goods imported for the project shall
not exceed ten thousand eight hundred
ninety-eight million rupees.
==========================================================================
(B) after Table-1, amended as aforesaid, the following shall be added, namely:-
"Annex-A
[See condition 145(iii)]
INDEMNITY BOND
(On appropriately stamped non-judicial paper)
THIS DEED OF INDEMNITY is made on the ________ date of ________BETWEEN Messrs________having registered office at ________ (hereinafter called "the importers" which means and includes their successors, administrators, executors and assignees) of the one part, AND the President of Pakistan through the Collector of Customs________ (hereinafter called the "Collector of Customs"), of the other part.
WHEREAS the Federal Government, by its decision contained in
Notification No. S.R.O. ________dated the ________and subject to the conditions given in the said Notification, has been pleased to direct that such equipment and construction machinery, as are not manufactured locally, shall be exempt from the whole of customs-duties leviable thereon, in accordance with the said Notification, if imported for :-
(i) construction of Sukkur - Multan Section (392.0 km) of Karachi - Peshawar Motorway or
(ii) for the construction of Karakorum Highway (KKH) Phase-II - Thakot to Havellian Section (118.057 km).
AND WHEREAS M/S. ________having registered office at________ (hereinafter called the importers) have imported the equipment and/or construction machinery mentioned in the said Notification for purposes of construction of above mentioned project(s) in accordance with the conditions given in the said Notification;
NOW, THEREFORE, in consideration of the release of the equipment and/or construction machinery without recovery of leviable duties, the importers bind themselves to pay on demand to the Government of Pakistan the sum of Rs. ________being the customs duties and charges leviable on the machinery, if the importers fail to fulfill the condition (vi) or (vii) or (viii) of the said Notification as the case may be.
The importers further agree and bind themselves that the amount covered by this Bond shall be recovered as arrears of customs duties under section 202 of the Customs Act,1969 . This Bond shall become void when the Collector of Customs is satisfied that the importers have fulfilled all the conditions of the said Notification.
Signed by importers on this________day of ________201_.
Managing Director
(Name and permanent address)
Collector of Customs
(On behalf of President)
Witness________________________________________
(signature, name, designation and full address)
Witness________________________________________
(signature, name, designation and full address)
Note: The bond shall be written on appropriate non-judicial stamp paper and shall be witnessed by a Government servant in BPS 17 or above, an Oath Commissioner, a Notary Public or an officer of a Schedule Bank
Annex-B
[See condition 145 (iv) & (v)]
======================================================
NTN or FTN of Importer Approval No.
======================================================
(I) (II)
======================================================
Details of input goods (to be filled by the authorized
officer of the Regulatory Authority) to be imported
==========================================================================================
Description Quantity/UOM L/C No. or IGM No. Remarks, if
and bank contract Date & any.
specifications. No. and B/L. Index No.
==========================================================================================
(1) (2) (3) (4) (6)
==========================================================================================
CERTIFICATE BY THE AUTHORIZED OFFICER OF REGULATORY AUTHORITY: It is hereby certified that the description, quantity and other details mentioned above are true and correct. Goods imported are in commensuration with the project requirement and are bonafide requirement of the project. It is further certified that the above items shall not be used for any other purpose except for the project.
Signature:_________________
Name & Designation: __________________________________
Official Stamp: __________________________________
Date: __________________________________
Note: - For the purposes of this notification, the expression "not manufactured locally" shall mean the goods which are not listed in the locally manufactured items in the Customs General Order issued by the Federal Board of Revenue from time to time.
Annex-C
[See condition 146(b)]
INDEMNITY BOND
(On appropriately stamp non-judicial paper attested by a Government servant in BPS 17 or above, an Oath Commissioner, a Notary Public or an officer of a Scheduled Bank)
THIS DEED OF INDEMNITY is made on the ________ date of________BETWEEN Messrs________having registered office at ________ (hereinafter called "the importers" which means and includes their successors, administrators, executors and assignees) of the one part, AND the President of the Islamic Republic of Pakistan through the Collector of Customs________ (hereinafter called the "Collector of Customs"), of the other part.
WHEREAS the Federal Government, by its decision contained in Notification No. S.R.O. ________dated the ________and subject to the conditions given in the said Notification, has been pleased to direct that such equipment shall be exempt from the whole of customs-duties leviable thereon, in accordance with the said Notification, if imported for Lahore Orange Line Metro Train Project.
AND WHEREAS M/S. ________, the importers have imported the equipment mentioned in the said Notification for the above mentioned project in accordance with the conditions given in the said Notification; NOW, THEREFORE, in consideration of the release of the equipment without recovery of leviable duties, the importers bind themselves to pay on demand to the Government of Pakistan the sum of Rs. ________being the customs duties and charges leviable on the equipment, if the importers fail to fulfil the condition (f) or (g) or (h) of the said Notification, as the case may be.
The importers further agree and bind themselves that the amount covered by this Indemnity Bond shall be recovered as arrears of customs duties under section 202 of the Customs Act, 1969. This Bond shall stand revoked automatically when the Collector of Customs is satisfied that the importers have fulfilled all the conditions of the said Notification.
Signed by importers on this ________day of________201_.
Managing Director or person next in hierarchy duly authorized by MD
(Name and permanent address)
Collector of Customs
(On behalf of President)
Witness (1)_______________________
(signature, name, designation and full address)
Witness (2)_______________________
(signature, name, designation and full address)
Annex-D
[See conditions 146 (c) & (e)]
====================================================
NTN or FTN of Importer Approval No.
====================================================
Details of equipment (to be filled by the authorized
officer of the Regulatory Authority) to be imported
==============================================================================
Description Quantity/UOM L/C No. or IGM No. Remarks, if
and bank contract Date & any.
specifications. No. and B/L. Index No.
==============================================================================
(1) (2) (3) (4) (6)
==============================================================================
CERTIFICATE BY THE AUTHORIZED OFFICER OF REGULATORY AUTHORITY:
It is hereby certified that the description, quantity and other details mentioned above are true and correct. Goods imported are in commensuration with the project requirements and are bona fide requirement of the Project under the Contract. It is further certified that the above items shall not be used for any other purpose except for the Project.
Signature:___________________
Name and Designation: ___________________
Official Stamp: ___________________
Date: ___________________
(C) In Table-3, after the omitted serial number 16 and omitted entries relating thereto, the following new serial numbers and entries relating thereto in columns (2), (3) and (4) shall be added, namely:-
=========================================================================
"17. Machinery, equipment, Respective Nil
raw materials, components heading
and other capital goods for
use in building, fittings,
repairing or refitting of
ships, boats or floating
structures imported by
Karachi Shipyard and
Engineering Works
Limited.
18. The following parts for If imported by
assembling and manufacturers
manufacturing of personal and
computers and laptops: assemblers of
(i) Bare PCBs 8534.0000 computers
(ii) Power Amplifier 8542.3300 and laptops,
(iii) Microprocessor/ 85.42 registered
Controllers with and
certified by
Engineering
Development
Board in
accordance
with quota
determined by
IOCO
(iv) Equipment for SMT 8486.2000
Manufacturing
(v) Laptop batteries 8506.5000
(vi) Adopters 8504.4020
(vii) Cooling fans 8414.5190
(viii) Heat sink 7616.9920
(ix) Hard Disk SSD 8471.7020
(x) RAM/ROMS 8471.7060
and
8471.7090
(xi) System on 85.42
Chip/FPGA-IC
(xii) LCD/LED Screen 8528.7211
(xiii) Motherboards 8534.0000
(xiv) power supply 84.73
(xv) Optical Drives 8471.7040
(xvi) External Ports 8536.2090
(xvii) Network cards 8517.6990
(xviii) Graphic cards 8471.5000
(xix) wireless cards 8517.6970
(xx) micro phone 8518.3000
(xxi) Trackpad 8471.6020
Plant and machinery, 9917 (2) Nil"; and
except the items listed
under Chapter 87 of the
Pakistan Customs Tariff,
imported for setting up of a
Special Economic Zone
(SEZ) by zone developers
and for installation in that
zone by zone enterprises,
on one time basis as
prescribed in the SEZ Act,
2012 and rules thereunder
subject to such condition,
limitations and restriction
as a Federal Board of
Revenue may impose from
time to time.
=========================================================================
(21) in the Eight Schedule,
(A) in Table-1, in column (1),-
(a) against serial number 25, in column (3), for the figure "8701.9020", the figures "8701.9220 and 8701.9320" shall be substituted;
(b) against serial number 26, in column (4), for the figure "7", the figure "5" shall be substituted;
(c) against serial number 27, in column (4), for the figure "7", the figure "5" shall be substituted;
(d) against serial number 28, in column (4), for the figure "7", the figure "5" shall be substituted;
(e) against serial number 29, in column (4), for the figure "7", the figure "5" shall be substituted;
(f) against serial number 30, in column (4), for the figure "7", the figure "5" shall be substituted;
(g) serial numbers 33, 35, 36, 37, 38, 39, 40, 41, 42, 48 and 49 and entries relating thereto in columns (2), (3), (4) and (5) shall be omitted;
(h) against serial number 43, in column (4), for the figure "10", the figure "5" shall be substituted;
(i) after serial number 49, and entries relating thereto in columns (2), (3), (4) and (5) omitted as aforesaid, the following new serial numbers and entries relating thereto in columns (2), (3), (4) and (5) shall be added, namely:
============================================================================
"50. LNG 2711.1100 12% If imported by
M/s Pakistan
State Oil and
M/s Pakistan
LNG Limited
51. RLNG 2711.2100 12% If supplied by
M/s Pakistan
State Oil and
M/s Pakistan
LNG Limited to
M/s SNGPL
52. Fertilizers (all Respective 3% Nil
types) heading
53. The following 5% Subject to same
cinematographic limitations and
equipment conditions as are
imported during specified in Part-
the period 1 of Fifth
commencing on Schedule to the
the 1st day of Customs Act,
July, 2018 and 1969 for availing
ending on the 3%
30th day of June, concessionary
2023. rate of customs
duty on the
import of these
equipment.";
(i) Projector 9007.2000
(ii) Parts and 9007.9200
accessories for
projector
(iii) Other 9032.8990
instruments and
apparatus for
cinema
(iv) Screen 9010.6000
(v) 9010.9000
Cinematographic
parts and
accessories
(vi) 3D Glasses 9004.9000
(vii) Digital Loud 8518.2200
Speakers
(viii) Digital 8519.8190
Processor
(ix) Sub-woofer 8518.2990
and Surround
Speakers
(x) Amplifiers 8518.5000
(xi) Audio rack 7326.9090
and termination 8537.1090
board
(xii) Music 8519.8990
Distribution
System
(xiii) Seats 9401.7100
(xiv) Recliners 9401.7900
(xv) Wall Panels 7308.9090
and metal
profiles
(xvi) Step Lights 9405.4090
(xvii) Illuminated 9405.6000
Signs
(xviii) Dry Walls 6809.1100
(xix) Ready Gips 3214.9090
54. lithium iron 8506.5000 12% Nil"; and
phosphate
battery (Li-Fe-
PO4)
============================================================================
(B) in Table-2, in column (1), after serial number 8 and entries relating thereto in columns (2), (3) and (4), the following new serial number 9 and entries relating thereto in columns (2), (3) and (4) shall be inserted, namely:-
================================================================
"9 Capital goods Respective The concession will
otherwise not heading be available in respect
exempted, for of those Transmission
Transmission Line Line Projects which
Projects. are being executed
under Standard
Implementation
Agreement under
Policy Framework for
Private Sector
Transmission Line
Projects, 2015 and
Projects Specific
Transmission
Services Agreement.
Provided that sales
tax charged under this
provision shall be
non-adjustable and
non-refundable. ".
================================================================
5. Amendment of Ordinance, XLIX of 2001.- In the Income Tax Ordinance, 2001 (XLIX of 2001), the following further amendments shall be made, namely:-
(1) in section 2,-
(A) after clause (22A), the following new clause shall be inserted, namely:-
"(22B) "fee for offshore digital services" means any consideration for providing or rendering services by a non- resident person for online advertising including digital advertising space, designing, creating, hosting or maintenance of websites, digital or cyber space for websites, advertising, e-mails, online computing, blogs, online content and online data, providing any facility or service for uploading, storing or distribution of digital content including digital text, digital audio or digital video, online collection or processing of data related to users in Pakistan, any facility for online sale of goods or services or any other online facility."; and
(B) in clause (23A), after the word "Board" the expression "or AJ&K Council Board of Revenue or Gilgit-Baltistan Council Board of Revenue" shall be inserted;
(C) in clause (29), for the expression ", 236M and 236N," the word "and" shall be substituted;
(D) in clause (41) ,-
(a) in sub-clause (e) ,-
(i) for paragraph (i), the following shall be substituted, namely:-
"(i) has and habitually exercises an authority to conclude contracts on behalf of the other person or has and habitually plays the principal role leading to the conclusion of contracts that are routinely concluded without material modification by the person and these contracts are -
(a) in the name of the person; or
(b) for the transfer of the ownership of or for the granting of the right to use property owned by that enterprise or that the enterprise has the right to use; or
(c) for the provision of services by that person; or";
(ii) after paragraph (ii), the following explanation shall be added, namely:-
"Explanation.- For removal of doubt, it is clarified that an agent of independent status acting in the ordinary course of business does not include a person acting exclusively or almost exclusively on behalf of the person to which it is an associate; or";
(b) after sub-clause (f), the following new sub-clause shall be added, namely:-
"(g) a fixed place of business that is used or maintained by a person if the person or an associate of a person carries on business at that place or at another place in Pakistan and-
(i) that place or other place constitutes a permanent establishment of the person or an associate of the person under this sub-clause; or
(ii) business carried on by the person or an associate of the person at the same place or at more than one place constitute complementary functions that are part of a cohesive business operation.
Explanation.- For the removal of doubt, it is clarified that -
(A) the term "cohesive business operation" includes an overall arrangement for the supply of goods, installation, construction, assembly, commission, guarantees or supervisory activities and all or principal activities are undertaken or performed either by the person or the associates of the person; and
(B) supply of goods include the goods imported in the name of the associate or any other person, whether or not the title to the goods passes outside Pakistan.";
(2) in section 4B, in sub-section (1), for the figure "2017" the figure "2020" shall be substituted;
(3) in section 5A, in sub-section (1),-
(a) for the words "seven and a half", the word "five" shall be substituted;
(b) for the word "forty", the word "twenty" shall be substituted; and
(c) the words "or bonus shares" shall be omitted;
(4) in section 6,-
(a) in sub-section (1), after the word "royalty", a comma and the words ", fee for offshore digital services" shall be inserted;
(b) in sub-section (3), in clause (b),after the word "services", occurring for the first time, the words "or fee for offshore digital services" shall be inserted;
(c) in sub-section (4), after the word "royalty", a comma and the words ", fee for offshore digital services" shall be inserted;
(5) in section 8, in sub-section (1), the expression "5A," shall be omitted;
(6) in section 18, in sub-section (1), after clause (e), the following explanation shall be added, namely:-
"Explanation.- For the removal of doubt it is clarified that income subject to taxation under sections 5A, 5AA, 6, 7 and 7A shall not be chargeable to tax under this section.";
(7) in section 37, in sub-section (4A), in clause (a), after the word "gift", the expression "from a relative as defined in sub-section (5) of section 85" shall be inserted;
(8) in section 39, in sub-section (1),-
(a) in clause (k), for full stop at the end, a semi colon and the word "and" shall be substituted;
(b) in clause (l), for the semi colon and the word "and" a full stop shall be substitued; and
(c) clause (m) shall be omitted.;
(9) in section 53, in sub-section (2), for the expression "Minister-in-charge may, from time to time pursuant to the approval of the Economic Coordination Committee of Cabinet", the word "Government" shall be substituted;
(10) in section 57,-
(a) in sub-section (1), after the word "which", the expression "sub- section (4) or" shall be inserted; and
(b) for sub-section (4), the following shall be substituted, namely:-
"(4) The loss attributable to deductions allowed under sections 22, 23, 23A, 23B and 24 that has not been set off against income, the loss not set off shall be set off against fifty percent of the person's balance income chargeable under the head "income from business" after setting off loss under sub-section (1), in the following tax year and so on until completely set off:
Provided that such loss shall be set off against hundred percent of the said balance income if the taxable income for the year is less than ten million Rupees";
(11) in section 59A, for sub-section (5), the following shall be substituted, namely:-
"(5) Subject to sub-section (4) of section 57, sub-section
(12) of section 22 and sub-section (6), where in computing the taxable income for any tax year, full effect cannot be given to the loss relating to deductions under section 22, 23, 24 or 25 owing to there being no profits or gains chargeable for that year or such profits or gains as mentioned in sub-section (4) of section 57, being less than the said loss, the loss or part of the loss, as the case may be, shall be set off against fifty percent of the person's income chargeable under the head "income from business" for the following year or if there is no "income from business" for that year, be set off against fifty percent of the person's income chargeable under the head "income from business" for the next following year and so on for succeeding years.";
(12) in section 62, in sub-section (2), in component C of the formula, in clause (c), for the words "one and a half", the word "two" shall be substituted;
(13) in section 65B, in sub-section (2), for the figure "2019" the figure "2021" shall be substituted;
(14) in section 65D, in sub-section (2), in clause (a), for the figure "2019" the figure "2021" shall be substituted;
(15) in section 65E, in sub-section (4), for the figure "2019" the figure "2021" shall be substituted;
(16) in section 79, in sub-section (1), in clause (c), after the word "asset" the expression "to a relative, as defined in sub-section (5) of section 85" shall be inserted;
(17) in section 100A, after sub-section (2), the following new sub-section shall be added, namely:-
"(3) Notwithstanding anything contained in sub-section (1), income, profits and gains and tax payable thereon shall be computed subject to the limitations and provisions contained in Chapters VII and VIII.";
(18) in section100C, in sub-section (2), in clause (e), after the word "banks", the words "and microfinance banks" shall be inserted;
(19) in section 101,-
(a) in sub-section (3), in clause (d), for full stop at the end a semi colon and the word "or" shall be substituted and thereafter the following new clause shall be added, namely:- "(e) import of goods, whether or not the title to the goods passes outside Pakistan, if the import is part of an overall arrangement for the supply of goods, installation, construction, assembly, commission, guarantees or supervisory activities and all or principal activities are undertaken or performed either by the associates of the person supplying the goods or its permanent establishment, whether or not the goods are imported in the name of the person, associate of the person or any other person.
Explanation.- For the removal of doubt, it is clarified that where the income is subject to taxation under sections 5A, 5AA, 6, 7 and 7A, the income shall not be chargeable to tax under the head income from business."; and
(b) after sub-section (12), the following new sub-section shall be inserted, namely:-
"(12A) A fee for offshore digital services shall be Pakistan-source income, if it is -
(a) paid by a resident person, except where the fee is payable in respect of services utilised in a business carried on by the resident outside Pakistan through a permanent establishment; or
(b) borne by a permanent establishment in Pakistan of a non-resident person.";
(20) after section 101, amended as aforesaid, the following new section shall be inserted, namely:-
"101A. Gain on disposal of assets outside Pakistan.- (1) Any gain from the disposal or alienation outside Pakistan of an asset located in Pakistan of a non-resident company shall be Pakistan-source
(2) The gain under sub-section (1) shall be chargeable to tax at the rate and in the manner as specified in sub-section (10).
(3) Where the asset is any share or interest in a non- resident company, the asset shall be treated to be located in Pakistan, if -
(a) the share or interest derives, directly or indirectly, its value wholly or principally from the assets located in Pakistan; and
(b) shares or interest representing ten per cent or more of the share capital of the non-resident company are disposed or alienated.
(4) The share or interest, as mentioned in sub-section (3), shall be treated to derive its value principally from the assets located in Pakistan, if on the last day of the tax year preceding the date of transfer of a share or an interest, the value of such assets exceeds one hundred million Rupees and represents at least fifty per cent of the value of all the assets owned by the non-resident company.
(5) Notwithstanding the provisions of section 68, the value as mentioned in sub-section (4) shall be the fair market value, as may be prescribed, for the purpose of this section without reduction of liabilities.
(6) Where the entire assets by the non-resident company are not located in Pakistan, the income of the non-resident company, from disposal or alienation outside Pakistan of a share of, or interest in, such non-resident company shall be treated to be located in Pakistan, to the extent it is reasonably attributable to assets located in Pakistan and determined as may be prescribed.
(7) Where the asset of a non-resident company derives, directly or indirectly, its value wholly or principally from the assets located in Pakistan and the non-resident company holds, directly or indirectly, such assets through a resident company, such resident company shall, for the purposes of determination of gain and tax thereon under sub-section (8) or, as the case may be, sub-section (9), shall furnish to the Commissioner within sixty days of the transaction of disposal or alienation of the asset by the non-resident company, the prescribed information or documents, in a statement as may be prescribed:
Provided that the Commissioner may, by notice in writing, require the resident company, to furnish information, documents and statement within a period of less than sixty days as specified in the notice.
(8) The person acquiring the asset from the non-resident person shall deduct tax from the gross amount paid as consideration for the asset at the rate of fifteen percent and shall be paid to the Commissioner by way of credit to the Federal Government through remittance to the Government Treasury or deposit in an authorized branch of the State Bank of Pakistan or the National Bank of Pakistan, within fifteen days of the payment to the non-resident.
(9) The resident company as referred to in sub-section (7) shall collect advance tax as computed in sub-section (10) from the non-resident company within thirty days of the transaction of disposal or alienation of the asset by such non-resident company:
Provided that where the tax has been deducted and paid by the person acquiring the asset from the non-resident person under sub-section (8), the said tax shall be treated as tax collected and paid under this sub-section and shall be allowed a tax credit for that tax in computing the tax under sub-section (10).
(10) The tax to be deducted under sub-section (8) or to be collected under sub-section (9) shall be the higher of -
(a) 20% of A, where A = fair market value less cost of acquisition of the asset; or
(b) 10% of the fair market value of the asset.
(11) Where tax has been paid under sub-section (8) or (9), no tax shall be payable by the non-resident company in respect of gain under sub-section (8) of section 22 or capital gains under section 37 or 37A.";
(21) in section 107, in sub-section (2), for the word "Where" the words "Subject to section 109, where" shall be substituted;
(22) in section 108,-
(a) in sub-section (3), in clause (b), for the words "and maintain" the expression ", maintain and furnish to the Board" shall be substituted; and
(b) in sub-section (4), after the word "under", occurring for the first time, the expression "clause (a), (c) or (d) of" shall be inserted;
(23) in section 109,-
(a) in sub-section (1), after clause (c), the following new clause shall be inserted, namely:-
"(d) to disregard an entity or a corporate structure that does not have an economic or commercial substance or was created as part of the tax avoidance scheme.";
(b) after sub-section (2), the following new sub-section shall be added, namely:-
"(3) Reduction in a person's liability to tax as referred to in sub-section (2) means a reduction, avoidance or deferral of tax or increase in a refund of tax and includes a reduction, avoidance or deferral of tax that would have been payable under this Ordinance, but are not payable due to a tax treaty for the avoidance of double taxation as referred to in section 107.";
(24) after section 109, substituted as aforesaid, the following new section shall be inserted, namely:-
"109A. Controlled foreign company.- (1) There shall be included in the taxable income of a resident person for a tax year an income attributable to controlled foreign company as defined in sub-section (2).
(2) For the purpose of this section, controlled foreign company means a non-resident company, if -
(a) more than fifty percent of the capital or voting rights of the non-resident company are held, directly or indirectly, by one or more persons resident in Pakistan or more than forty percent of the capital or voting rights of the non- resident company are held, directly or indirectly, by a single resident person in Pakistan;
(b) tax paid, after taking into account any foreign tax credits available to the non-resident company, on the income derived or accrued, during a foreign tax year, by the non-resident company to any tax authority outside Pakistan is less than sixty percent of the tax payable on the said income under this Ordinance;
(c) the non-resident company does not derive active business income as defined under sub- section (3); and
(d) the shares of the company are not traded on any stock exchange recognized by law of the country or jurisdiction of which the non-resident company is resident for tax purposes.
(3) A company shall be treated to have derived active income if -
(a) more than eighty percent of income of the company does not include income from dividend, interest, property, capital gains, royalty, annuity payment, supply of goods or services to an associate, sale or licensing of intangibles and management, holding or investment in securities and financial assets; and
(b) principally derives income under the head "income from business" in the country or jurisdiction of which it is a resident.
(4) Income of a controlled foreign company is an amount equal to the taxable income of that company determined in accordance with the provisions of this Ordinance as if that controlled foreign company is a resident taxpayer.
(5) The amount of attributable income under sub-section
(1) for a tax year shall be computed according to the following formula, namely:-
A x (B/100)
Where -
A is the amount of income of a controlled foreign company under sub-section (2); and
B is the percentage of capital or voting rights, whichever is higher, held by the person, directly or indirectly, in the controlled foreign company.
(6) The amount of attributable income shall be treated as zero, if the capital or voting rights of the resident person is less than ten percent.
(7) Income of a controlled foreign company shall be treated as zero, if it is less than ten million Rupees.
(8) The income of a controlled foreign company in respect of a foreign tax year, as defined in sub-section (9), shall be determined in the currency of that controlled foreign company and shall, for purposes of determining the amount to be included in the income of any resident person during any tax year under the provisions of this section, be converted into Rupees at the State Bank of Pakistan rate applying between that foreign currency and the Rupee on the last day of the tax year.
(9) Foreign tax year, in relation to a non-resident company, means any year or period of reporting for income tax purposes by that non-resident company in the country or jurisdiction of residence or, if that company is not subject to income tax, any annual period of financial reporting by that company.
(10) The income attributable to controlled foreign company under sub-section (1) and taxed in Pakistan under this section shall not be taxed again when the same income is received in Pakistan by the resident taxpayer.";
(25) in section 111,-
(a) for sub-section (2), the following shall be substituted, namely:-
"(2) The amount referred to in sub-section (1) shall be included in the person's income chargeable to tax:
(i) in the tax year to which such amount relates if the amount representing investment, money, valuable article or expenditure is situated or incurred in Pakistan or concealed income is Pakistan-source; and
(ii) in the tax year immediately preceding the tax year in which the investment, money, valuable article or expenditure is discovered by the Commissioner and is situated or incurred outside Pakistan and concealed income is foreign-source.
Explanation.- For the removal of doubt, it is clarified that where the investment, money, valuable article or expenditure in respect of assets or expenditure situated or incurred outside Pakistan liable to be included in the income of tax year 2018 and onwards on the basis of discovery made by the Commissioner during tax year 2019 and onwards and the person explains the acquisition of such asset or expenditure from sources relating to tax year in which such asset was acquired or expenditure was incurred, such explanation shall not be rejected on the basis that the source does not relate to the tax year immediately preceding tax year in which the asset or expenditure was discovered by the Commissioner.";
(b) in sub-section (4), in clause (a), after the word "channels", the words "not exceeding ten million Rupees in a tax year" shall be inserted.
(26) in section 114,-
(a) in sub-section (1), in clause (b),-
(i) in sub-clause (viii), the word "or" at the end shall be omitted; and
(ii) in sub-clause (ix), for full stop at the end, a semicolon and the word "; or" shall be substituted and thereafter the following new sub-clause shall be added, namely:- "(x) every resident person being an individual required to file foreign income and assets statement under section 116A."; and
(b) in sub-section (2),-
(i) in clause (d), the word "and" at the end shall be omitted; and
(ii) in clause (e), for full stop at the end a semicolon and the word "; and" shall be substituted and thereafter the following new clause shall be added, namely:-
"(f) shall be accompanied with a foreign income and assets statement as required under section 116A."; and
(27) after section 116, the following new section 116A shall be inserted, namely:-
"116A. Foreign income and assets statement.- (1) Every resident taxpayer being an individual having foreign income of not less than ten thousand United States dollars or having foreign assets with a value of not less than one hundred thousand United States dollars shall furnish a statement, hereinafter referred to as the foreign income and assets statement, in the prescribed form and verified in the prescribed manner giving particulars of -
(a) the person's total foreign assets and liabilities as on the last day of the tax year;
(b) any foreign assets transferred by the person to any other person during the tax year and the consideration for the said transfer; and
(c) complete particulars of foreign income, the expenditure derived during the tax year and the expenditure wholly and necessarily for the purposes of deriving the said income.
(2) The Commissioner may by a notice in writing require any person being an individual who, in the opinion of the Commissioner on the basis of reasons to be recorded in writing, was required to furnish a foreign income and assets statement under sub-section (1) but who has failed to do so to furnish the foreign income and assets statement on the date specified in the notice.";
(28) in section 118,-
(a) in sub-section (1),-
(i) for the word "or" a comma shall be substituted;
(ii) after the figure "116" the expression "or a foreign income and assets statement under 116A, if applicable" shall be inserted; and
(b) in sub-section (2A), after the figure "116", the expression "or a foreign income and assets statement under 116A, if applicable" shall be added;
(29) in section 121, in sub-section (3), for full stop at the end a colon shall be substituted and thereafter the following proviso shall be added, namely:-
"Provided that where notice for furnishing a return of income under sub-section (4) of section 114 is issued in respect of one or more of the last ten completed tax years in pursuance of proviso to sub-section (5) of section 114 an assessment order under this section shall only be issued within two years from the end of tax year in which such notice is issued.";
(30) in section 131, in sub-section (5), in the first proviso, for the expression ":- " at the end, a colon shall be substituted and thereafter the following new proviso shall be inserted, namely:-
"Provided further that where recovery of tax has been stayed under this section, such stay order shall cease to have effect on expiration of the said period of one hundred and eighty days following the date on which the stay order was made and the Commissioner shall proceed to recover the said tax:";
(31) in section 134A,-
(a) for sub-section (2), the following shall be substituted, namely:-
"(2) The Board after examination of the application of an aggrieved person, shall within sixty days of receipt of such application in the Board appoint a committee consisting of:
(i) an officer of Inland Revenue not below the rank of Commissioner;
(ii) a person from a panel comprising of retired Chartered Accountants and Advocates;
(iii) a retired judge of a High Court-for the resolution of the hardship or dispute:
Provided that the mode and manner of appointment of the members of the committee shall as may be prescribed.";
(b) after sub-section (2), substituted as aforesaid, the following new sub-sections shall be inserted, namely:-
"(2A) The aggrieved person and the Board, as the case may be, shall withdraw the appeals pending before the Appellate Authority.
(2B) The committee shall not commence the proceedings under sub-section (3), unless the order of withdrawal by the Appellate Authority is communicated to the Board:
Provided that if the order of withdrawal is not communicated within seventy five days of the appointment of the committee, the said committee shall be dissolved and this section shall not apply.";
(c) for sub-sections (3), (4) and (4A) the following shall be substituted, namely:-
"(3) The Committee appointed under sub-section (2) shall examine the issue and may if it deems necessary conduct inquiry, seek expert opinion, direct any officer of the Inland Revenue or any other person to conduct an audit and shall decide the dispute by majority, within one hundred and twenty days of its appointment:
Provided that in computing the aforesaid period of one hundred and twenty days, the period, if any, for communicating the order of withdrawal under sub-section (3) shall be excluded.
(4) The decision of the committee made under sub-section (3) shall be binding on the Board and the aggrieved person.
(4A) If the Committee fails to decide within the period of one hundred and twenty days, under sub-section (3), the Board shall dissolve the committee, by an order in writing, and the matter shall be decided by the Appellate Authority, which issued the order of withdrawal under sub-section (2B) and the appeal shall be treated to be pending before such Appellate Authority as if the appeal has never been withdrawn.";
(d) after sub-section (4A), substituted as aforesaid, the following new sub-sections shall be inserted, namely:-
"(4B) The Board shall communicate the order of dissolution to the Appellate Authority mentioned in sub- section (1) and the Commissioner.
(4C) The aggrieved person, on receipt of the order of dissolution, shall communicate to the Appellate Authority mentioned in sub-section (1), which shall decide the appeal within six months of the communication of the order of dissolution ";
(e) in sub-section (5),-
(i) for the words "determined by the Board in its order under sub-section (4)", the words "decided by the committee under sub-section (3)" shall be substituted;
(ii) for the colon at the end, a full stop shall be substituted and the two provisos thereafter shall be omitted;
(32) in section 137, in sub-section (2), for full stop at the end, a colon shall be substituted and thereafter the following new proviso shall be added, namely:-
"Provided that the due date for payment of tax payable under sub-section (7) of section 147 shall be the date specified in sub- section (5) or sub-section (5A) or first proviso to sub-section (5B) of section 147.";
(33) in section 140, in sub-section (1), in the proviso, for the expression and figure "twenty-five" the word "ten" shall be substituted;
(34) in section 147,-
(a) in sub-section (4), in component A, for semi-colon, a colon shall be substituted and thereafter the following proviso shall be added, namely:-
"Provided that where the taxpayer fails to provide turnover or the turnover for the quarter is not known, it shall be taken to be one-fourth of one hundred and ten percent of the turnover of the latest tax year for which a return has been filed;";
(b) in sub-section (4A), after the word "taxpayer", wherever occurring, the words "including a banking company" shall be inserted; and
(c) in sub-section (6),-
(i) after the word "taxpayer", wherever occurring, the words "excluding a banking company" shall be inserted;
(ii) for full stop at the end a colon shall be substituted and thereafter the following provisos shall be added, namely:-
"Provided that an estimate of the amount of tax payable shall contain turnover for the completed quarters of the relevant tax year, estimated turnover of the remaining quarters along with reasons for any decline in estimated turnover, documentary evidence of estimated expenses or deductions which may result in lower payment of advance tax and the computation of the estimated taxable income of the relevant tax year:
Provided further that where an estimate of the amount of tax payable is not accompanied by details mentioned in the first proviso, the Commissioner may reject the estimate after providing an opportunity of being heard to the taxpayer and the taxpayer shall pay advance tax according to the formula contained in sub-section (4).";
(35) in section 148,-
(i) for sub-section (8), the following shall be substituted, namely:-
"(8) The tax required to be collected from a person under this section shall be minimum tax for a tax year on the import of-
(a) goods where goods are sold in the same condition as they were when imported;
(b) edible oil;
(c) packing material; and
(d) plastic raw material imported by an industrial undertaking falling under PCT headings 39.01 to 39.12.";
(36) in section 152,-
(a) after sub-section (1BB), the following new sub-section shall be inserted, namely:-
"(1C) Every banking company or a financial institution remitting outside Pakistan an amount of fee for offshore digital services, chargeable to tax under section 6, to a non- resident person on behalf of any resident or a permanent establishment of a non-resident in Pakistan shall deduct tax from the gross amount paid at the rate specified in Division IV of Part I of the First Schedule.";
(b) after sub-section (2AA), the following new sub-section shall be inserted, namely:-
"(2B) The tax deductible under clause (b) of sub- section (2A) shall be a minimum tax and the provisions of sub-clauses (i), (ii) and (iii) of clause (b) of sub-section (3) and sub-section (4A) of section 153 shall mutatis mutandis apply.";
(c) in sub-section (7), for clause (a), the following shall be substituted, namely:-
"(a) an import of goods where title to the goods passes outside Pakistan and is supported by import documents, except where -
(i) the supply is made in connection with the overall arrangement for the supply of goods, installation, construction, assembly, commission, guarantees or supervisory activities and all or principal activities are undertaken or performed either by the associates of the person supplying the goods or its permanent establishment, whether or not the title passes outside Pakistan and whether or not the goods are imported in the name of the associate or any other person; or
(ii) the supply is made by a resident person or a Pakistan permanent establishment of a non- resident person in connection with the overall arrangement as referred to in sub-clause (i); or";
(37) in section 153,-
(a) in sub-section (1),-
(i) in clause (a), after the word "goods", the expression ",except where payment is less than seventy-five thousand Rupees in aggregate, during a financial year" shall be inserted; and
(ii) in clause (b), after the word "services", the expression "except where payment is less than thirty thousand Rupees in aggregate, during a financial year" shall be inserted;
(b) in sub-section (7), in clause (i),-
(i) in sub-clause (h), for the expression "tax year 2007 or in any subsequent tax year", the expression "any of the preceding tax years" shall be substituted;
(ii) in sub-clause (i),-
(a) for the expression "the tax year 2009 or in any subsequent year", the expression "any of the preceding tax years" shall be substituted; and
(b) the word "or", at the end, shall be omitted;
(iii) in sub-clause (j), after the semicolon, the word "or" shall be inserted;
(iv) after sub-clause (j), amended as aforesaid, the following new sub-clause shall be added, namely:-
(v) after sub-clause (j), the following new clauses shall be inserted, namely:-
"(k) a person deriving income from the business of construction and sale of residential, commercial or other buildings(builder); or
(l) a person deriving income from the business of development and sale of residential, commercial or other plots (developer).";
(38) in section 165A,-
(a) for clause (a), the following shall be substituted, namely:- "(a) a list of persons containing particulars of cash
withdrawals exceeding fifty thousand Rupees in a day and tax deductions thereon for filers and non-filers, aggregating to Rupees one million or more during each preceding calendar month.";
(b) in clause (b), for the word "one" the word "ten" shall be substituted;
(c) in clause (c), for the word "one" the word "two" shall be substituted;
(39) in section 168,-
(a) in sub-section (2), after the word "sub-sections" the expression "(2A), (2B)," shall be inserted;
(b) after sub-section (2), amended as aforesaid, the following new sub-sections shall be inserted, namely:-
"(2A) Where a company is a member of an association of persons which is taxed in accordance with section 92 and an amount of tax has been collected from an association of persons under Division II of this Part or Chapter XII or deducted from a payment made to the said association under Division III of this Part or Chapter XII, the company shall be allowed a tax credit, in respect of tax collected or deducted from the association of persons, according to the following formula, namely: -
(A/B) x C
Where -
A is the amount of share of profits before tax received by the company as a member from the association of persons;
B is the taxable income of the association of persons; and
C is the amount of tax withheld in the name of the association of persons.
(2B) No tax credit shall be allowed for any tax collected or deducted from an association of persons in respect of an amount for which credit has been allowed under sub-section (2A) to a company being a member of the association.";
(40) in section 177, in sub-section (11),-
(a) in clause (d), after the word "person", occurring for the first time, the words "including a foreign expert or specialist" shall be inserted;
(b) after clause (d), amended as aforesaid, the following new clause shall be added, namely:-
"(e) a tax audit expert deployed under an audit assistance programme of an international tax organization or a tax authority outside Pakistan:
Provided that in case the member is not an officer of Inland Revenue, the person shall only be included as a member in the special audit panel if an agreement of confidentiality has been entered into between the Board and the person, international tax organization or a tax authority, as the case may be.";
(41) in section 182, in the Table, in column (1),-
(a) against S. No. (1A), in column (3), after the word "of", occurring for the first time, the words "five thousand Rupees if the person had already paid tax required to be collected or deducted and to be reported in the statement within the due date and filed statement within ninety days from the due date for filing the statement and ten thousand Rupees otherwise" shall be inserted;
(b) after S. No. 1AA and entries relating thereto in columns (2),(3) and (4), the following new S. No and entries relating thereto shall be inserted, namely:-
===========================================================
"1AAA Where any Such persons 116A";
person fails to shall pay a
furnish a foreign penalty of 2
assets and percent of the
income foreign income
statement within or value of the
the due date. foreign assets
for each year
of default.
===========================================================
(42) after section 182, amended as aforesaid, the following new section shall be inserted, namely:-
"182A. Return not filed within due date.-(1) Notwithstanding anything contained in this Ordinance, where a person fails to file a return of income under section 114 by the due date as specified in section 118 or by the date as extended by the Board under section 214A or extended by the Commissioner under section 119, as the case may be, such person shall-
(a) not be included in the active taxpayers' list for the year for which return was not filed within the due date; and
(b) not be allowed, for that tax year, to carry forward any loss under Part VIII of Chapter IV";
(43) section 214D shall be omitted;
(44) in section 216,-
(a) in sub-section (3), after clause (ka), the following new clause shall be inserted, namely:-
"(kb) to National Database and Registration Authority for the purpose of broadening of the tax base;"; and
(b) in sub-section (5), for the expression "Minister-in-charge" the word "Government" shall be substituted;
(45) in section 218,-
(a) in sub-section (1), after clause (c), the following new clause shall be added, namely:-
"(d) served on the individual electronically in the prescribed manner,";
(b) in sub-section (2), after clause (c), the following new clause shall be added, namely:-
"(d) served on the individual electronically in the prescribed manner,";
(46) in section 227, in sub-section (1),-
(a) after the word "made" occurring for the first time, the words "or any notice issued" shall be inserted; and
(b) after the word, "made", occurring for the third time, the words "or notices issued" shall be inserted;
(c) after sub-section (1), amended as aforesaid, the following explanation shall be added, namely:-
"Explanation.- For the removal of doubt, it is clarified that Civil Court includes any court exercising power of the civil court.";
(47) after section 227B, the following new section shall be inserted, namely:- "227C. Restriction on purchase of certain assets.- Notwithstanding anything contained in any law, for the time being in force,-
(a) any application for booking, registration or purchase of a new locally manufactured motor vehicle or for registration of an imported vehicle shall not be accepted or processed by any vehicle registering authority of Excise and Taxation Department or a manufacturer of a motor vehicle respectively, unless the person is a filer.;
(b) any application or request by a person from any authority responsible for registering, recording or attesting transfer of any immovable property for registering or attesting the transfer shall not be accepted or processed by such authority, unless the person is a filer.";
(48) after section 230E, the following new section shall be inserted, namely:-
"230F. Directorate General of Immovable Property.-(1) The Directorate-General of Immovable Property, (hereinafter referred to as Directorate-General in this section, shall consist of a Director General and as many Directors, Additional Directors, Deputy Directors and Assistant Directors and such other officers as the Board may, by notification in the official Gazette, appoint.
(2) The Board may, by notification in the official Gazette, specify the functions and jurisdiction of the Directorate-General and its officers.
(3) The Directorate-General may, subject to the provisions and conditions as may be prescribed, initiate proceedings for the acquisition of property for the reasons and purposes specified in sub-section (4).
(4) The proceedings under sub-section (3) shall be initiated, where the Directorate-General, on the basis of valuation made by it, has reason to believe that any immovable property of a fair market value has been transferred by a person, hereinafter referred to as the transferor, to another person, hereinafter referred to as the transferee, for a consideration which is less than the fair market value of the immovable property and that the consideration for such transfer as agreed to between the transferor and transferee has been understated in the instrument of transfer for the purposes of -
(a) the avoidance or reduction of withholding tax obligations under this Ordinance;
(b) concealment of unexplained amount referred to in sub-section (1) of section 111 representing investment in immovable property; or
(c) avoidance or reduction of capital gains tax under section 37.
(5) The Directorate-General may appoint any valuer or expert as it considers necessary for the purposes of determination of valuation including fair market value of immovable property.
(6) The mode and manner of appointment of a valuer or expert shall be as may be prescribed.
(7) The valuation made under sub-section (4) and reasons that consideration is less than the fair market value shall be recorded in writing.
(8) No proceedings shall be initiated in respect of any immovable property after expiration of a period of six months from the end of the month in which the instrument of transfer in respect of such property is registered, recorded or attested.
(9) The mode and manner of initiation of proceedings and acquisition of immovable property under this section shall be as may be prescribed:
Provided that the proceedings shall not be initiated unless the transferee is provided with an opportunity of being heard and where the objection by the transferee, if any, is rejected by the Directorate-General, it shall record in writing the reasons for rejection through an order.
(10) If the Directorate-General is satisfied with the objections or reasons furnished by the transferee or the transferor, it shall, by order in writing, declare that the property shall not be acquired under this section.
(11) If after hearing the objections, if any, and after taking into account all the relevant material on record, the Directorate-General is satisfied that the fair market value of such property exceeds the consideration by more than fifty per cent of such consideration and that transfer as agreed to between the transferor and the transferee has not been truly stated in the instrument of transfer it may, after obtaining approval of the Board, make an order for acquisition of the immovable property under this section.
(12) The transferee may prefer express appeal to the Appellate Tribunal of Immovable Property against the order of acquisition of any immovable property under sub-section (11) within sixty days of service of a copy of such order.
(13) There shall be established an Appellate Tribunal of Immovable Property to exercise the powers conferred on the Tribunal under this section.
(14) The appointment of members of the Tribunal, powers, functions, constitution of the Tribunal and mode and manner of disposal of appeals shall be as may be prescribed.
(15) The Appellate Tribunal may, after giving the appellant and the Directorate-General an opportunity of being heard, pass such order as it thinks fit.
(16) The transferee or the Directorate-General aggrieved by any order of the Tribunal may, within sixty days of the date on which the order under sub-section (15) is served, prefer an appeal against such order to the High Court.
(17) As soon as may be after the order for acquisition of immovable property made under sub-section (11) becomes final, the Directorate-General may, by notice in writing, order the transferee or any other person who may be in possession of the immovable property to surrender or deliver possession thereof to the Directorate-General within thirty days of the date of the service of the notice.
(18) The order referred to in sub-section (11) becomes final if either no appeal has been there against filed or on appeal filed before the Tribunal, the order is confirmed and no appeal is filed before the High Court or on appeal filed before the High Court the order is confirmed.
(19) Notwithstanding anything contained in any law or any agreement for the time being in force, where order referred to in sub-section (11) becomes final, the immovable property and all rights including ownership rights thereof shall be vested in the Federal Government and shall be treated to be in the same position in relation to such rights as the person in whom such rights would have continued to vest if such order had not become final.
(20) Where any immovable property is acquired under this section, the Board shall make the payment of consideration for acquisition to the person or persons entitled thereto, as soon as may be, after the property becomes vested in the Federal Government.
(21) Notwithstanding the provisions of section 68, for the purpose of this section,-
(a) "consideration for acquisition" means a sum equal to the aggregate of the amount of the consideration for the transfer of immovable property and hundred per cent of such consideration;
(b) "fair market value" in relation to an immovable property means the price that the immovable property would ordinarily fetch on sale in the open market on the date of execution of the instrument of transfer of such property;
(c) "immovable property" means any land with or without a superstructure or any building or part of a building or any rights therein and includes, where any land or any building or part of a building is transferred along with any machinery, plant, equipment, furniture and fittings; and
(d) "transfer" in relation to any immovable property means transfer of such property by way of sale or exchange or lease for a term of not less than ten years.
(22) The provisions of this section shall come into force on such date as the Federal Government may, by notification in official Gazette, appoint.
(23) From the date of appointment as mentioned in sub- section (21), rates mentioned in column (3) of the Table in Division XVIII shall be 1% and provisions of clause (c) of sub-section (4) of section 111, section 236C, section 236W and Division X of Part IV of the First Schedule shall not apply.";
(49) in section 233A, in sub-section (2), for the words "final tax", the word "adjustable" shall be substituted;
(50) after section 236H, the following new section shall be inserted, namely:-
"236HA. Tax on sale of certain petroleum products.-
(1) Every person selling petroleum products to a petrol pump operator or distributer, where such operator or distributer is not allowed a commission or discount, shall collect advance tax on ex- depot sale price of such products at the rate specified in Division XVA of Part IV of the First schedule.
(2) The tax deductible under sub-section (1) shall be a final tax on the income arising from the sale of petroleum products to which sub-section (1) applies.";
(51) in section 236K, -
(a) after sub-section (2), the following new sub-section shall be inserted, namely:-
"(3) Any person responsible for collecting payments in installments for purchase or allotment of any immovable property where the transfer is to be effected after making payment of all installments, shall at the time of collecting installments collect from the allotee or transferee advance tax at the rate specified in Division XVIII of Part IV of the First Schedule.";
(52) section 236M shall be omitted;
(53) section 236N shall be omitted;
(54) after section 236X, the following new section shall be inserted, namely:-
"236Y. Advance tax on persons remitting amounts abroad through credit or debit or prepaid cards.-(1) Every banking company shall collect advance tax, at the time of transfer of any sum remitted outside Pakistan, on behalf of any person who has completed a credit card transaction, a debit card transaction, or a prepaid card transaction with a person outside Pakistan at the rate specified in Division XXVII of Part IV of the First Schedule.
(2) The advance tax collected under this section shall be adjustable.";
(55) in section 241, the existing provision thereof shall be numbered as sub-section (1) of that section and thereafter the following new sub- section shall be added, namely:-
"(2) Notwithstanding any omission, irregularity or deficiency in the establishment, or conferment of powers and functions, of the Directorate-General (Intelligence and Investigation), Inland Revenue and authorities specified in section 230, all orders passed, notices issued and actions taken in exercise or purported exercise of the powers and functions of the Commissioner under this Ordinance by the Directorate-General (Intelligence and Investigation), Inland Revenue or the authorities specified in section 230 shall be deemed to have been validly passed, issued and taken under this Ordinance.";
(56) in the First Schedule,-
(A) in Part I,-
(i) for Division I, the following shall be substituted, namely:-
"Division I
Rates of Tax for Individuals
(1) The rates of tax imposed on the taxable income of every individual shall be as set out in the following table, namely:-
TABLE
==========================================================================
S.No. Taxable income Rate of tax
==========================================================================
(1) (2) (3)
==========================================================================
1. Where the taxable 0%
income does not
exceed Rs. 4,00,000
2. Where the taxable Rs.1,000
income exceeds
Rs.4,00,000 but does
not exceed Rs.
8,00,000
3. Where the taxable Rs.2,000
income exceeds
Rs.8,00,000 but does
not exceed Rs.
12,00,000
4. Where the taxable 5% of the amount
Rates of Tax for income exceeds exceeding Rs.12,00,000
Association of Rs.12,00,000 but
Persons does not exceed
Rs.24,00,000
5. Where the taxable Rs. 60,000 + 10% of the
income exceeds amount exceeding
Rs.24,00,000 but Rs.24,00,000
does not exceed
Rs.48,00,000
6. Where the taxable Rs. 300,000 + 15% of
income exceeds the amount exceeding
Rs.48,00,000 Rs.48,00,000
==========================================================================
(2) The rates of tax imposed on the taxable income of every Association of Persons shall be as set out in the following table, namely:-
TABLE
========================================================
S. No. Taxable Income Rate of Tax
========================================================
(1) (2) (3)
========================================================
1. Where the taxable 0%
income does not
exceed Rs.400,000
2. Where the taxable 5% of the amount
income exceeds exceeding Rs.400,000
Rs.400,000 but does
not exceed
Rs.1,200,000
3. Where the taxable Rs.40,000 + 10% of
income exceeds the amount exceeding
Rs.1,200,000 but Rs.1,200,000
does not exceed
Rs.2,400,000
4. Where the taxable Rs.160,000 + 15% of
income exceeds Rs. the amount exceeding
2,400,000 but does Rs.2,400,000
not exceed
Rs.3,600,000
Where the taxable Rs.340,000 + 20% of
5. income exceeds Rs. the amount exceeding
3,600,000 but does Rs.3,600,000
not exceed
Rs.4,800,000
6. Where the taxable Rs.580,000 + 25% of
income exceeds Rs. the amount exceeding
4,800,000 but does Rs.4,800,000
not exceed
Rs.6,000,000
7. Where the taxable Rs.880,000 + 30% of
income exceeds the amount exceeding
Rs.6,000,000 Rs.6,000,000;
========================================================
ii) in Division II, in paragraph (i), in the third proviso, for the word "onwards" the following shall be substituted, namely:-
"thereafter as set out in the following Table, namely:-
================================
"TABLE
================================
Tax Year Rate of Tax
================================
2019 29%
2020 28%
2021 27%
2022 26%
2023 and onwards 25%"
================================
(iii) for Division IIA, the following shall be substituted, namely:-
"Division IIA
TABLE
===========================================================================
S. No. Person Rate of super tax
Rate (percentage of income)
===========================================================================
Tax Year Tax Tax Year Tax Year
2018 Year 2020 2021
2019
===========================================================================
(1) (2) (3) (4) (5) (6)
===========================================================================
1. Banking 4% 3% 2% 0%
company
2. Person other 3% 2% 1% 0%
than a banking
company,
having income
equal to or
exceeding Rs.
500 million
===========================================================================
(iv) in Division IV, after the word "services", the expression "and 5% of the gross amount of the fee for offshore digital services" shall be inserted;
(v) in Division VII, for the expression "Tax Year 2018", the expression "Tax Years 2018 and 2019" shall be substituted;
(vi) in Division VIII, in the Table, in the third row, for the expression "sub-section (4)", the expression " the proviso to sub-section (1)" shall be substituted;
(B) in Part-II, in the Table, in column (1), after S. No. 3 and entries relating thereto in columns (2), (3) and (4), the following new serial number and entries relating thereto shall be inserted, namely:-
===========================================================
"3A Persons importing coal 4% 6%";
===========================================================
(C) in Part III,-
(i) in Division I, in the fourth proviso, for full stop at the end a colon shall be inserted and thereafter the following new proviso shall be added, namely,-
"Provided also that the rate of tax on dividend received by an individual, from a Rental REIT Scheme shall be 7.5%";
(ii) in Division III,-
(a) in paragraph (1), in sub-paragraph (b),-
(I) in clause (i), for the figure "7", the figure "8" shall be substituted; and
(II) in clause (ii), for the figure "7.75" the figure "9" shall be substituted;
(b) in paragraph (3),-
(I) in sub-paragraph (ii), for the figure "12" the figure "14" shall be substituted; and
(II) in sub-paragraph (iii), for the figure "12.5" the figure "15" shall be substituted;
(D) in Part IV,-
(i) in Division XI, for full stop at the end a colon shall be substituted and thereafter the following proviso and the Table shall be added, namely:-
"Provided that the rate for the function of marriage in a marriage hall, marquee, hotel, restaurant, commercial lawn, club, a community place or any other place used for such purpose shall be as set out in the Table below:-
TABLE
===========================================================
S. No. Rate of tax
===========================================================
(1) (2) (3)
===========================================================
1. 5% of the For Islamabad, Lahore, Multan,
bill ad Faisalabad, Rawalpindi,
valorem or Gujranwala, Bahawalpur,
Rs. 20,000 Sargodha, Sahiwal, Shekhurpura,
per Dera Ghazi Khan, Karachi,
function, Hyderabad, Sukkur, Thatta,
whichever Larkana, Mirpur Khas,
is higher Nawabshah, Peshawar, Mardan,
Abbottabad, Kohat, Dera Ismail
Khan, Quetta, Sibi, Loralai,
Khuzdar, Dera Murad Jamali and
Turbat.
2. 5% of the For cities other than those
bill ad mentioned above";
valorem or
Rs. 10,000
per
function,
whichever
is higher
===========================================================
(ii) after Division XV, the following new Division shall be inserted, namely:-
"Division XVA
Advance tax on sale of certain petroleum products
The rate of collection of tax under section 236HA shall be 0.5% of ex-depot sale price for filers and 1% for non-filers."; and
(iii) in Division XXI,-
(a) for the figure "0.6", the figure "0.4" shall be substituted.;
(b) both the provisos shall be omitted; and
(iv) after Division XXVI, the following new Division shall be inserted, namely:-
"Division XXVII
Advance tax on amount remitted abroad through credit, debit or prepaid cards
The rate of tax to be deducted under section 236Y shall be 1% of the gross amount remitted abroad for filers and 3% for non-filers.";
(57) in the Second Schedule,-
(A) in Part I,-
(i) after clause (39), the following new clause shall be inserted, namely:-
"(39A) Any amount paid as kit allowance, ration allowance, special messing allowance, SSG allowance, Northern Areas compensatory allowance, special pay for Northern Areas and height allowance to the Armed Forces personnel.";
(ii) in clause (57), in sub-clause (3), after paragraph (xiv), the following new sub-clauses shall be added, namely:-
"(xv) Khyber Pakhtunkhwa Retirement Benefits and Death Compensation Fund.
(xvi) Khyber Pakhtunkhwa General Provident Investment Fund.
(xvii) Khyber Pakhtunkhwa Pension Fund." ;
(iii) in clause (61), after sub-clause (xlv), the following new sub-clauses shall be added, namely:-
"(xlvi) Pakistan Sweet Home, Angels and Fairies Place.
(xlvii) Al-Shifa Trust Eye Hospital. (xlviii) Aziz Tabba Foundation.
(xlix) Sindh Institute of Urology and Transplantation, SIUT Trust and Society for the Welfare of SIUT.
(l) Sharif Trust.
(li) The Kidney Centre Post Graduate Institute.
(lii) Pakistan Disabled Foundation.";
(iv) in clause (66),-
a. after sub-clause (xxxiv), the following sub-clause shall be added, namely:-
"(xxxv) Third Pakistan International Sukuk Company Limited."; and
b. after sub-clause (xli), the following new sub-clauses shall be added, namely:-
"(xlii) SAARC Energy Centre.
(xliii) Pakistan Bar Council.
(xliv) Pakistan Centre for Philanthropy.
(xlv) Pakistan Mortgage Refinance Company Limited.
(xlvi) Aziz Tabba Foundation.
(l) Al-Shifa Trust Eye Hospital.
(li) Saylani Welfare International Trust.
(lii) Shaukat Khanum Memorial Trust.
(liii) Layton Rahmatullah Benevolent Trust (LRBT).
(liv) The Kidney Centre Post Graduate Training Institute.
(lv) Pakistan Disabled Foundation. (lvi) Forman Christian College.";
(v) in clause (72A), after the expression "Limited", the expression "and the Third Pakistan International Sukuk Company Limited" shall be inserted;
(vi) after clause (90), the following new clause shall be inserted, namely:-
"(90A) Any profit on debt derived by any person on bonds issued by Pakistan Mortgage Refinance Company to refinance the residential housing mortgage market, for a period of five years with effect from the 1st day of July, 2018.";
(vii) in clause (100), after the word "from" the words "manufacturing or" shall be inserted;
(viii) after clause (110B), the following new clause shall be inserted, namely:-
"(110C) Any gain by a person on transfer of a capital asset, being a bond issued by Pakistan Mortgage Refinance Company to refinance the residential housing mortgage market, during the period from the 1st day of July, 2018 till the 30th day of June, 2023.";
(ix) after clause (126B), the following new clause shall be inserted, namely:-
""(126BA) Profits and gains derived by a refinery set up between the 1st day of July, 2018 and the 30th day of June, 2023 with minimum 100,000 barrels per day production capacity for a period of twenty years beginning in the month in which the refinery is set up or commercial production is commenced, whichever is later. Exemption under this clause shall also be available to existing refineries, if-
(a) existing production capacity is enhanced by at least 100,000 barrels per day;
(b) the refinery maintains separate accounts for income arising from aforesaid additional production capacity; and
(c) the refinery is a deep conversion refinery.";
(B) in Part-II, after clause (24A), the following new clause shall be added, namely:-
"(24AA) The rate of tax, under section 152 in the case of M/S CR-NORINCO JV (Chinese Contractor) as recipient, on payments arising out of commercial contract agreement signed with the Government of Punjab for installation of electrical and mechanical (E&M) equipment for construction of the Lahore Orange Line Metro Train Project, shall be 6% of the gross amount of payment.";
(C) in Part III,-
(a) in clause (6), after the word "Account" the words "and Shuhada Family Welfare Account" shall be inserted;
(b) after clause (6), amended as aforesaid, the following new clauses shall be added, namely:-
"(7) The amount of tax payable by foreign film-makers from making films in Pakistan shall be reduced by fifty percent on income from film-making in Pakistan.
(8) The amount of tax payable by resident companies deriving income from film-making shall be reduced by fifty percent on income from film-making.";
(D) in Part IV,-
(a) in clause (1A), after the word "Limited" " the words "and the Third Pakistan International Sukuk Company Limited" shall be added;
(b) in clause (11A),-
(i) after sub-clause (xxvii), the following new sub-clause shall be inserted, namely:-
"(xxviii) Third Pakistan International Sukuk Company Limited."; and
(ii) after sub-clause (xxix), the following new sub-clause shall be added, namely:-
"(xxx) taxpayers qualifying for exemption under clause
(126) of Part-I of this Schedule with effect from the tax year 2014.";
(c) after clause (11D), the following new clause shall be inserted, namely:-
"(11E) The provisions of clause (b) of sub-section (1) of section 153 shall not apply to payments received by Sui Southern Gas Company Limited and Pakistan LNG Terminal Limited from Sui Northern Gas Pipelines Limited on account of re-gasification charges.";
(d) after clause (12), the following new clause shall be inserted, namely:-
"(12A) The provisions of section 150 shall not apply to dividend paid to Transmission Line Projects under Transmission Line Policy 2015.";
(e) in clause (36A), after the word "Account" the words "and Shuhada Family Welfare Account" shall be inserted.;
(f) in clause (56), in sub-clause (ia), for the expression "Bakri Trading Company Pakistan (Pvt) Ltd, Overseas Oil Trading Company (Pvt) Ltd " the expression "Bakri Energy (Private) Limited" shall be substituted.";
(g) clause (56B) shall be omitted;
(h) in clause (57), in the second proviso, for the figure "2019" the figure "2021" shall be substituted;
(i) after clause (60), the following new clauses shall be inserted, namely:-
"(60A) The provisions of section 148 shall not apply for import of plant, machinery and equipment including dumpers and special purposes motor vehicles imported by the following for construction of Sukkur-Multan section of Karachi-Peshawar Motorway project and Karakorum Highway (KKH) Phase-II (Thakot to Havellian Section) of CPEC project respectively, namely:-
(a) M/s China State Construction Engineering Corporation Ltd. (M/s CSCEC); and
(b) M/s China Communication Construction Company (M/s CCCC).
(60AA) The provisions of section 148 of the Income Tax Ordinance, 2001(XLIX of 2001), shall not apply for import of construction materials or goods up to a maximum of 10,898.000 million rupees imported by China State Construction Engineering Corporation (M/s CSCEC) for construction of Sukkur-Multan section of Karachi- Peshawar Motorway project of National Highway Authority under CPEC.";
(60B) The provisions of section 148 shall not apply on import of thirty-five armoured and security vehicles imported by or for Ministry of Foreign Affairs, Government of Pakistan meant for security of visiting foreign dignitaries, subject to the following conditions, namely: -
(a) that the vehicles imported under this clause shall only be used for the security purpose of foreign dignitaries and will be parked in
Central Pool of Cars (CPC) in the Cabinet Division for further use as and when needed; and
(b) that the importing Ministry at the time of import shall furnish an undertaking to the concerned Collector of Customs to the extent of customs-dues exempted under this clause on consignment to consignment basis binding themselves that the vehicles imported under this clause shall not be re-exported, sold or otherwise disposed of without prior approval of the Board and in the manner prescribed therefor.
(60C) The provision of section 148 shall not apply on import of equipment to be furnished or installed for Rail Based Mass Transit Projects in Lahore, Karachi, Peshawar and Quetta under CPEC.";
(j) in clause (63), after the word "Karachi" the expression "and Lahore University of Management Sciences, Lahore" shall be inserted;
(k) for clause (86), the following shall be substituted, namely:-
"(86) (a) The provisions of section 111 shall not apply to-
(i) investment made by an individual in a greenfield industrial undertaking directly or as an original allottee in the purchase of shares of a company establishing an industrial undertaking or capital contribution in an association of persons establishing an industrial undertaking;
(ii) investment made by an association of persons in an industrial undertaking; and
(iii) investment made by a company in an industrial undertaking-
if the said investment is made on or after the 1st day of January, 2014 and commercial production commences on or before the 30th day of June, 2019.
(b) The concessions given in this clause shall also apply to investment made in -
(i) construction industry in corporate sector;
(ii) low cost housing construction in the corporate sector;
(iii) livestock development projects in the corporate sector;
(iv) new captive power plants; and
(v) mining and quarrying in Thar coal, Balochistan and Khyber Pakhtunkhawa.
(c) The concessions given in sub-clause (a) shall not apply to investment made in-
(i) arms and ammunitions;
(ii) explosives;
(iii) fertilizers;
(iv) sugar;
(v) cigarettes;
(vi) aerated beverages;
(vii) cement;
(viii) textile spinning units;
(ix) flour mills
(x) vegetable ghee; and
(xi) cooking oil manufacturing;
(d) The term green field industrial undertaking shall include expansion projects for the purposes of this clause;
(e) Immunity under this clause shall not be available to proceeds of crime relating to offences under the following laws, namely:-
(i) Control of Narcotics Substances Act, 1997;
(ii) Anti Terrorism Act, 1997; and
(iii) Anti-Money Laundering Act, 2010.
(l) in clause (94),-
(a) after the expression "Mercantile Exchange Limited", the expression "inspection, certification, testing and training services" shall be inserted;
(b) for the figure "2018", the figure "2019" shall be substituted;
(c) in the first proviso, for the figure "2018", the figure "2019" shall be substituted; and
(d) in the second proviso,-
(i) for the figure "2018" the figure "2019" shall be substituted; and
(e) for the figure "2017", the figure "2018" shall be substituted;
(m) for clauses (95) and (96), the following shall be substituted , namely:-
"(95) the provisions of sections 147, 150A, 151, 152, 231A, 231AA, 236A and 236K shall not apply to "The second Pakistan international Sukuk Company Limited" and the Third Pakistan International Sukuk Company Limited, as a payer." "(96) the provisions of sections 147, 150A, 151, 155 and 236K shall not apply to "The second Pakistan international Sukuk Company Limited" and the Third Pakistan International Sukuk Company Limited, as a recipient."
(n) after clause (99), the following new clause shall be inserted, namely:-
"(100) The provisions of section 236U shall not apply to an insurance company collecting premium under-
(a) Crop Loan Insurance Scheme (CLIS); and
(b) Livestock Insurance Scheme (LIS).";
(o) after clause (102), the following new clauses shall be added, namely:-
"(103) The provisions of section 7B shall not apply to yield or profit on investment in Bahbood Savings Certificate or Pensioner's Benefit Account, provided that tax on the said yield or profit on debt is paid at the rates specified in Division I of Part I of the First Schedule subject to clause (6) of Part III.
(104) The provisions of section 5A shall not apply to a company where a restriction has been imposed on distribution of dividend on account of an agreement with the Government of Pakistan.
(105) The provisions of section 177 and 214C shall not apply to a person whose income tax affairs have been audited in any of the preceding three tax years: Provided that the Commissioner may select a person under section 177 for audit, with approval of the Board.";
(58) in the Seventh Schedule,-
(a) in rule 1, for the word "Income", occurring for the first time, the expression "Subject to the provisions of Chapter VII and VIII, income" shall be substituted; and
(b) in rule (7C), for the expression "year 2015, 2016 and 2017" the expression "years 2015 to 2020" shall be substituted;
6. Amendments of the Federal Excise Act, 2005.- In the Federal Excise Act, 2005, the following further amendments shall be made, namely:-
(1) in section 3, -
(a) in sub-section (1), in clause (c), for the words "Board with the approval of the Federal Minister-in-charge", the words "Federal Government" shall be substituted; and
(b) in sub-section (4), for the words "Board with the approval of the Federal Minister-in-charge", the words "Federal Government" shall be substituted;
(2) In section 8, for the words "KIBOR plus three", the word "twelve" shall be substituted;
(3) after section 14A, the following new section shall be inserted, namely:- "14B. Assessment giving effect to an order.-. (1) Except where sub- section (2) applies, where, in consequence of, or to give effect to, any finding or direction in any order made under Chapter-V by the Commissioner (Appeals), Appellate Tribunal, High Court, or Supreme Court, the Commissioner or an officer of Inland Revenue empowered in this behalf, shall issue the order within one year from the end of the financial year in which the order of the Commissioner (Appeals), Appellate Tribunal, High Court or Supreme Court, as the case may be, was served on the Commissioner or Officer of Inland Revenue.
(2) Where, by an order made under Chapter V by the Appellate Tribunal, High Court, or Supreme Court, an order of assessment is set aside wholly or partly, and the Commissioner or Commissioner (Appeals) or the Officer of Inland Revenue, as the case may be, is directed to pass a new order of assessment, the Commissioner or Commissioner (Appeals) or Officer of Inland Revenue, as the case may be, shall pass the new order within one year from the end of the financial year in which the Commissioner or Commissioner (Appeals) or Officer of Inland Revenue, as the case may be, is served with the order:
Provided that limitation under this sub-section shall not apply if an appeal or reference has been preferred against the order passed by Appellate Tribunal or a High Court.";
(4) in section 16, in sub-section (2), for the words "with the approval of the Federal Minister-in-charge", the words "Federal Government" shall be substituted;
(5) in section 29, in sub-section (2), after clause (a), the following new clause shall be inserted, namely:-
"(aa) The Board may, by notification in the official Gazette,-
(i) specify the functions and jurisdiction of the Directorate General and its officers; and
(ii) confer the powers of authorities specified in section 30 upon the Directorate General and its officers;";
(6) in section 37, in sub-section (3), in the second proviso, for the words "twenty-five", the word "ten" shall be substituted;
(7) for section 38, the following shall be substituted, namely:-
"38. Alternative Dispute Resolution.- (1) Notwithstanding any other provision of this Act or the rules made thereunder, an aggrieved person, who has filed an appeal which is pending before an Appellate Authority, may apply to the Board for the appointment of a committee for the resolution of any hardship or dispute mentioned in detail in the application, except where prosecution proceedings have been initiated or where interpretation of question of law having effect on identical other cases is involved.
(2) The Board after examination of the application of an aggrieved person shall, within sixty days of receipt of such application in the Board, appoint a committee consisting of an officer of Inland Revenue not below the rank of Commissioner and two persons from a panel comprising of retired High Court justices, retired District and Session Judges, Chartered or Cost Accountants, Advocates, Income Tax Practitioners or reputable taxpayers for the resolution of the hardship or dispute.
(3) The aggrieved person and the Board as the case may be, shall withdraw the appeal pending before the appellate authority.
(4) The committee shall not commence the proceeding under sub-section (2) unless the order of withdrawal from the appellate authority is communicated to the Board:
Provided that if the order of withdrawal is not communicated within seventy-five days of the appointment of the committee, the said committee shall be dissolved and this section shall not apply.
(5) The committee appointed under sub-section (2) shall examine the issue and may, if it deems necessary, conduct inquiry, seek expert opinion, direct any officer of the Inland Revenue or any other person to conduct an audit and shall decide the dispute by majority, within one hundred and twenty days of its appointment:
Provided that in computing the aforesaid period of one hundred and twenty days, the period, if any, for communicating the order of withdrawal under sub-section (3) shall be excluded.
(6) The decision of the committee made under sub-section (5) shall be binding on the Board and the aggrieved person.
(7) If the committee fails to decide within the period of one hundred and twenty days under sub-section (5), the Board shall dissolve the committee by an order in writing and the matter shall be decided by the appellate authority, which issued the order of withdrawal under sub- section (3) and the appeal shall be treated to be pending before such appellate authority as if the appeal had never been withdrawn.
(8) The Board shall communicate the order of dissolution to the appellate authority mentioned in sub-section (1) and the commissioner.
(9) The aggrieved person may make the payment of federal excise duty and other duties and taxes as decided by the committee under sub-section (5) and all decisions, orders and judgments made or passed shall stand modified to that extent and all proceedings under this Act or the rules made thereunder by any authority shall abate.
(10) The Board may, by notification in the official Gazette, make rules for carrying out the purposes of this section.";
(8) in section 45,-
(a) in sub-section (2),-
(i) the words "or Chief Commissioner" shall be omitted; and
(ii) for the proviso at end, a full stop shall be substituted; and
(b) the proviso shall be omitted.
(9) in section 46, after sub-section (9), a new sub-section shall be added, namely:-
"(10) The audit of a registered person under this section shall be conducted only once in every three years.";
(10) section 47C shall be re-numbered as sub-section (1) of that section and thereafter the following new sub-section shall be added, namely:-
"(2) Notwithstanding any omission, irregularity or deficiency in the establishment of or conferment of powers and functions on the Directorate General (Intelligence and Investigation), Inland Revenue and authorities specified in clause (a) of sub-section (2) of section 29 of this Act, all orders passed, notices issued and actions taken in exercise or purported exercise of the powers and functions of the Officers of Inland Revenue under this Act by the Director General (Intelligence and Investigation), Inland Revenue or the authorities specified in clause (a) of sub-section (2) of section 29 of this Act shall be treated to have been validly passed, issued and taken under this Act.";
(11) in the First Schedule, in Table-1,-
(a) for serial numbers 9, 10 and 10a in column (1) and the entries relating thereto in columns (2), (3) and (4), the following serial numbers and the entries relating thereto shall be substituted, namely:-
===================================================================
"9. Locally produced 24.02 Rupees three
cigarettes if their on- thousand nine
pack printed retail price hundred and sixty
exceeds four thousand four per thousand
five hundred rupees cigarettes
per thousand
cigarettes.
10. Locally produced 24.02 Rupees one
cigarettes if their on- thousand seven
pack printed retail price hundred and
exceeds two thousand seventy per
nine hundred and thousand cigarettes
twenty-five rupees per
thousand cigarettes
but does not exceed
four thousand five
hundred rupees per
thousand cigarettes.
10a. Locally produced 24.02 Rupees eight
cigarettes if their on- hundred and forty
pack printed retail price eight per thousand
does not exceed two cigarettes"; and
thousand nine hundred
and twenty-five rupees
per thousand
cigarettes.
===================================================================
(b) in column (1), in serial number 13, in column (4), for the words "one rupee and twenty five paisa per kilogram", the words "one rupee and fifty paisa per kilogram" shall be substituted;
(12) in the Third Schedule,-
(a) in Table-1, after serial number 21 in first column and the entries relating thereto in second and third columns, the following new serial numbers and the entries relating thereto shall be added, namely:-
===========================================================
"22. Equipment, whether or not locally
manufactured, imported by M/s China
Railway Corporation to be furnished and
installed in Lahore Orange Line Metro Train
Project subject to the following conditions:
(a) that the equipment imported under
this Notification shall only be used in the
aforesaid Project;
(b) that the importer shall furnish an
indemnity bond, in the prescribed manner
and format as set out in Annex-A to this
Notification, at the time of import to the
extent of sales tax exempted under this
Notification on consignment to consignment
basis;
(c) that the Punjab Mass Transit
Authority, established under the Punjab
Mass Transit Authority Act, 2015 (ACT
XXXIII of 2015), hereinafter referred as the
Regulatory Authority, shall certify in the
prescribed manner and format as set out in
Annex-B to this Notification that the
imported equipment is bona fide
requirement of the Project under the
Contract No. PMA-CR-NORINCO-OL, dated
20.04.2015, hereafter referred as the
contract, signed between the Regulatory
Authority and CR-NORINCO;
(d) in the event a dispute arises whether
any item is entitled to exemption under this
Notification, the item shall be immediately
released by the Customs Department
against a corporate guarantee, valid for a
period of six months, submitted by the
importer. A certificate from the Regulatory
Authority duly verified by the Transport and
Communication Section of the Ministry of
Planning, Development and Reform, that
the item is covered under this Notification
shall be given due consideration by the
Customs Department towards finally
resolving the dispute. Disputes regarding
the local manufacturing only shall be
resolved through the Engineering
Development Board of the Federal
Government;
(e) for the clearance of imported
equipment through Pakistan Customs
Computerized System the authorized officer
of the Regulatory Authority shall furnish all
relevant information, as set out in Annex-B
to this Notification, online against a specific
user ID and password obtained under
section 155D of the Customs Act, 1969 (IV
of 1969). In Collectorates or Customs
stations where the Pakistan Customs
Computerized System is not operational, the
Director Reforms and Automation or any
other person authorized by the Collector in
this behalf shall enter the requisite
information in the Pakistan Customs
Computerized System on daily basis,
whereas entry of the data obtained from the
customs stations which have not yet been
computerized shall be made on weekly
basis;
(f) that the equipment, imported under
this Notification, shall not be re-exported,
sold or otherwise disposed of without prior
approval of the Federal Board of Revenue
(FBR). In case goods are sold or otherwise
disposed of with prior approval of FBR the
same shall be subject to payment of sales
tax as may be prescribed by the FBR;
(g) in case the equipment, imported
under this Notification, is sold or otherwise
disposed of without prior approval of the
FBR in terms of condition (f), the same shall
be subject to payment of statutory rates of
sales tax as were applicable at the time of
import;
(h) notwithstanding the condition (f) and
(g), equipment imported under this
Notification may be surrendered at any time
to the Collector of Customs having
jurisdiction, without payment of any sales
tax, for further disposal as may be
prescribed by the FBR;
(i) the indemnity bond submitted in
terms of condition (b) above shall stand
discharged on submission of a certificate
from the Regulatory Authority to the effect
that the equipment has been installed or
consumed in the said Project. In case the
equipment is not consumed or installed in
the project the indemnity bond shall be
discharged on fulfillment of conditions
stipulated at (f) or (g) or (h), as the case
may be; and
(j) that violation of any of the above
conditions shall render the goods liable to
payment of statutory rate of sales tax
leviable on the date of clearance of goods in
addition to any other penal action under
relevant provisions of the law.
Explanation. For the purpose of this
provisions, "equipment" shall mean
machinery, apparatus, materials and all
things to be provided under the contract for
incorporation in the works relating to Lahore
Orange Line Metro Train Project.
===========================================================
Annex-A
[See condition (b)]
INDEMNITY BOND
(On appropriately stamp non-judicial paper attested by a Government servant in BPS 17
or above, an Oath Commissioner, a Notary Public or an officer of a Scheduled Bank)
THIS DEED OF INDEMNITY is made on the ________date of________BETWEEN Messrs________having registered office at ________(hereinafter called "the importers" which means and includes their successors, administrators, executors and assignees) of the one part, AND the President of the Islamic Republic of Pakistan through the Collector of Customs ________ (hereinafter called the "Collector of Customs"), of the other part.
WHEREAS the Federal Government, by its decision contained in Notification No.
S.R.O. ________dated the ________and subject to the conditions given in the said Notification, has been pleased to direct that such equipment shall be exempt from the whole of customs-duties leviable thereon, in accordance with the said Notification, if imported for Lahore Orange Line Metro Train Project.
AND WHEREAS M/S. ________, the importers have imported the equipment mentioned in the said Notification for the above mentioned project in accordance with the conditions given in the said Notification;
NOW, THEREFORE, in consideration of the release of the equipment without recovery of leviable duties, the importers bind themselves to pay on demand to the
Government of Pakistan the sum of Rs. ________being the customs duties and charges leviable on the equipment, if the importers fail to fulfill the condition (f) or (g) or (h) of the said Notification, as the case may be.
The importers further agree and bind themselves that the amount covered by this Indemnity Bond shall be recovered as arrears of customs duties under section 202 of the Customs Act, 1969. This Bond shall stand revoked automatically when the Collector of Customs is satisfied that the importers have fulfilled all the conditions of the said Notification.
Signed by importers on this________day of________ 201_.
Managing Director or person next in hierarchy duly authorized by MD
(Name and permanent address)
Collector of Customs
(On behalf of President)
Witness (1)___________________________________
(signature, name, designation and full address)
Witness (2)___________________________________
(signature, name, designation and full address)
Annex-B
[See conditions (c) and (e)]
====================================================
NTN or FTN of Importer Approval No.
====================================================
Details of equipment (to be filled by the authorized
officer of the Regulatory Authority) to be imported
========================================================================================================
Description and Quantity/UOM L/C No. or bank IGM No. Date Remarks, if any.
specifications. Contract No. & Index No.
and B/L.
========================================================================================================
(1) (2) (3) (4) (6)
========================================================================================================
CERTIFICATE BY THE AUTHORIZED OFFICER OF REGULATORY AUTHORITY: It is hereby certified that the description, quantity and other details mentioned above are true and correct. Goods imported are in commensuration with the project requirements and are bona fide requirement of the Project under the Contract. It is further certified that the above items shall not be used for any other purpose except for the Project.
Signature: _________________
Name and Designation: _________________
Official Stamp:_________________
Date: _________________
=================================================================
23. Imported construction materials and Respective
goods imported by M/s China State heading"; and
Construction Engineering
Corporation Limited (M/s CSCECL),
whether or not locally
manufactured, for construction of
Karachi-Peshawar Motorway
(Sukkur-Multan Section) subject to
fulfilment of same conditions,
limitations and restrictions as are
specified under S. No. 145 of
Table-1 of Sixth Schedule to the
Sales Tax Act, 1990, provided that
total incidence of exemptions of all
duties and taxes in respect of
construction materials and goods
imported for the project shall not
exceed ten thousand eight hundred
ninety-eight million rupees.
=================================================================
(b) in Table-2,after serial number 13 in column (1) and the entries relating thereto in columns (2) and (3), the following new serial number and the entries relating thereto shall be added, namely:-
======================================================================
"14. Commission paid by State Bank of Respective heading".
Pakistan and its subsidiaries to
National Bank of Pakistan or any
other banking company for handling
banking services of Federal Or
Provincial Governments as State
Bank of Pakistan's agents
======================================================================
Health Levy on tobacco.- Pakistan Tobacco Board or its contractors, at the time of collecting cess on tobacco, directly or indirectly, shall collect Health Levy at the rate of ten rupees per kilogram of tobacco from every person purchasing tobacco including manufacturers of cigarettes.
Mobile handset levy.- (1) There shall be levied a Mobile handset levy, at the rates specified in column (3) of the Table below, on smart phones of different categories as specified in column (2) of the said Table, namely:-
TABLE
===================================================================
S.No Category of smart phone Rate of levy
per Set in rupees
===================================================================
(1) (2) (3)
===================================================================
1. Where Import value of handset (including Nil
duties and taxes) does not exceed
Rs.10,000/-
2. Where Import value of handset (including 1000
duties and taxes) exceeds Rs.10,000 but
does not exceed Rs.40,000/-
3. Where Import value of handset (including 3000
duties and taxes) exceeds Rs.40,000 but
does not exceed Rs.80,000/-
4. Where Import value of handset (including 5000
duties and taxes) exceeds Rs.80,000
===================================================================
(2) The Federal Board of Revenue shall collect levy on mobile handsets in prescribed manner.
STATEMENT OF OBJECTS AND REASONS
The purpose of this bill is to make financial provisions for the year beginning on the first day of July, 2018 and shall come into force on the first day of July, 2018 except clauses 3(2), 3(3), 3(19), 3(20), 3(22) 6(11)(a) & 6(11)(b) which shall have effect on the next day of assent given to this Act by the President of the Islamic Republic of Pakistan.
(DR. MIFTAH ISMAIL)
Minister for Finance, Revenue and Economic Affairs
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