LIST OF AMENDMENTS
CLAUSE 2
1. MR. ASAD UMER, Minister for Finance, Revenue and Economic Affairs to move that in the Finance Supplementary (Second Amendment) Bill, 2019 as introduced in the National Assembly, for clause 2, the following shall be substituted, namely;-
"2. Amendment of Customs Act, 1969 (IV of 1969). - In the Customs Act, 1969 (IV of 1969), the following further amendments shall be made which shall come into force at once except clause 2(1 )(a) and 2(2)(i) which shall take effect from first day of July, 2019 and clause 2(2) (iii) which shall take effect from thirty first day of March, 2019, namely: -
(1) In the First Schedule, in chapter 99, -
(a) In sub-chapter-V, against PCT code 9917, in column (2), in serial (2), for the words "plant and machinery", the words and comma "plant, machinery and firefighting equipment" shall be substituted; and
(b) in sub-chapter-VII, in column (1), for the PCT code 9925 arid the entries relating thereto in columns (2) and (3), the following shall be substituted, namely: -
"9925 (A) Artificial kidneys, hemodialysis machines, hemodialyzers, A.V.0"; and fistula needles, hemodialysis fluids and powder, blood tubing tines for dialysis, reverse osmosis plants for dialysis, double lumen catheter for dialysis, catheters for renal failure patients, peritoneal dialysis solution and cardiac catheters.
(B) Following items and appliances for Ostomy use: -
1. 3aseplate/Stoma Wafer/Flange.
2. Ostomy (Colostomy/Ileostomy/Urostomy) bags (All type)
3. Ostomy (Colostomy/Ileostomy/Urostomy) Paste
4. Ostomy (Colostomy/Ileostomy/Urostomy) Belt
5. Ostomy (Colostomy/Ileostomy/ Urostomy) Deodorizers
6. Ostony (Colostomy/ Ileostomy/ Urostomy) Strip Paste
7. Stoma Powder/Ostomy Powder (Colostomy/Ileostomy/Urostomy Powder/Ileostomy/Urostomy Powder)
8. Ostomy (Colostomy/Ileostomy/Urostomy) Skin Barrier Spray and Wipe
9. Ostomy (Colostomy/Ileostomy/Urostomy) Adhesive Remover Spray and Wipe.
10. Ostomy (Colostomy/Ileostomy/Urostomy) Mouldable Ring
11. Ostomy (Colostomy/Ileostomy/Urostomy) Elastic Tape
12. Ostomy (Colostomy/Ileostomy/Urostomy) Barrier Cream
13. Ostomy (Colostomy/Ileostomy/Urostomy) Protective Sheets
14. Ostomy (Colostomy/Ileostomy/Urostomy) Cap
15. Ostomy (Colostomy/Ileostomy/Urostomy) Protective Seal
16. Plastic Clips for closing the Ostomy bags.
17. Liquid washers and wipes for cleaning and washing peristomal skin
18. Night Drainage Bag
19. Cystoscope
20. Lithotripter
21. Colonoscope
22. Sigmoidoscope
23. Laparoscope
24. Suprapubic Cystostomy Set
25. Ryles Tube (Nasogastric Tube)
26. Foley's Catheter
27. Endoscope (Video Endoscopes)
28. Linear Cutter/Stapler
29. Circular Stapler
30. Right Angle Cutter/Stapler
31. Laparoscopic Hand Instruments:
a) Dissector
b) Grasper
c) Scissors
d) Clipper
e) Hook
f) Retractors
g) Needles Holders
h) Knot Pusher
i) Telescope (0°, 30°)
32. Urological Endoscopic Instruments:
(a) Resectoscope (Rotating and Fix)
(b) Optical Urethrotone
(c) Telescope (0°, 30°, 75°)
(d) Turp Resecting Loops
(2) In the Fifth Schedule, -
(i) In Part-I, in column (1), after Sr.33, the following new serial number and the entries relating thereto in columns (2), (3), (4) and (5) shall be added, namely: -
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"34 Plant and machinery Chapters 0% This exemption shall be
excluding consumer 84 and 85 available subject to
durable goods and fulfillment of following
office equipment as conditions, namely: -
imported by greenfield (a) the importer is
industries, intending to registered under the
manufacture taxable Sales Tax Act on or after
goods, during their the first day of July, 2019;
construction and (b) the industry is not
installation period. established by splitting up
or reconstruction or
reconstitution of an
undertaking already in
existence or by transfer
of machinery or plant from
another industrial
undertaking in Pakistan.
(c)exemption certificate
issued by the
Commissioner Inland
Revenue having
jurisdiction; and
(d) the goods shall not be
sold or otherwise
disposed of without prior
approval of the FBR and
the payment of customs
duties and taxes leviable
at the time of import.";
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(ii) in Part-VII, in Table-B, in column (1), the following amendments shall be made, namely: -
(a) against serial numbers 15 and 16, in column (4), for the figure "5", the figure "3", shall be substituted; and
(b) against serial number 18, in column (4), for the figure "5", the figure "0", shall be substituted.
(iii) After Part-VII, as amended aforesaid, the following new "Part-VIII", shall be added, namely: -
"Part-VIII
Import of industrial inputs/raw materials
TABLE
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S. Description PCT Customs Conditions
No. Code Duty (%)
===============================================================================================================
1 Magnesium oxide 2519 9010 0% Nil
2 Other 2836.9990 0% Nil
3 Cyclopentane 2902.1910 0% Nil
4 o-Xylene 2902.4100 0% Nil
5 Tetrafluoroethane 2903.3930 0% Nil
6 Octanol (octyl alcohol) and isomers thereof 2905.1600 0% Nil
7 Formic acid 2915.1100 16% Nil
8 Sodium formate 2915.1210 0% Nil
9 Other 3204.9000 16% Nil
10 Verifiable enamels and glazes, engobes (slips) 3207.2000 3% Nil
and similar preparations
11 Of a kind used in the leather or like industries 3403.1110 16% Nil
12 Of a kind used in the leather or like industries 3403.9110 16% Nil
including fat liquors
13 Of a kind used in the paper or like industries 3809.9200 11% Nil
14 Of a kind used in the leather or like industries 3809.9300 11% Nil
15 Acrylonitrile butadiene styrene (ABS) copolymers 3903.3000 0% Nil
16 Other poly-ethers 3907.2000 0% Nil
17 Polyurethanes 3909.5000 0% Nil
18 Insulation tape double sided 3919.1010 0% Nil
19 Shoe lasts 3926.9060 16% Nil
20 Latex 4002.1100 0% Nil
21 Other 4002.1900 0% Nil
22 Other 4016.1090 5% Nil
23 Containing by weight more than 50% of graphite 6903.1000 3% Nil
or other carbon or of a mixture of these products
24 Other 6903.2090 3% Nil
25 Adhesive tape 7607.1910 0% Nil
26 Used with HCFC and non-CFC gases 8414.3010 0% Nil
27 Of machines of heading 8414.1000 and 8414.9010 0% Nil
8414.3010
28 Evaporators (roll bond/fin/tube on plate types) 8418.9910 0% Nil
29 Machines for reeling unreeling, folding, cutting or 845.5000 0% Nil
pinking textile fabrics
30 Other 8452.2900 0% Nil
31 Machinery for preparing, tanning or working hides, 8453.1000 0% Nil
skins or leather
32 Machinery for making or repairing footwear 0% Nil
8453.2000
33 Parts 8453.9000 0% Nil
34 Other 8465.9190 0% Nil
35 Other 8477.3090 0% Nil
36 Parts 8477.9000 0% Nil
37 Injection or compression types 8480.7100 0% Nil
38 Motors of an output 'lot exceeding 37 .5 W 8501.1000 0% Nil
39 Other 8501 4090 16% Nil
40 Burglar or fire alarms and similar apparatus 8531.1000 0% Nil
41 Other 9030.8900 0% Nil
42 Of a kind used in refrigerators, deep freezers and 9032.1010 0% Nil
air conditioners
43 Other 9032.1090 16% Nil
44 (i) Other 3506 9190 5% If imported by
manufacturers of
(ii) Other 390^.9090 5%
diapers/sanitary napkins
registered under the
(iii) Of polymers of ethylene 3920.100v,) 16%
Sales Tax Act, 1.990,
subject to annual quota
(iv) Of other plastics 3921.1900 16%
determination and
(v) Of polymers of ethylene 3923.2100 5% verification by the Input
Output Coefficient
(vi) Weighing not more than 25 glm2 5603.1100 11% Organization (IOCO)
and certification by the
(vii) Weighing more than 25 g/m"1 but not more 5603.9200 16%
Engineering
than'70 g/m2 Development Board.
(viii) Weighing more than 70 g/m^ but not more 5603.9300 11%
than 150 g/m2
45 Other 1901.9090 5% Imports by
manufacturers of
infant formula milk,
registered under the
Sales Tax Act, 1990,
subject to annual
quota determination
and verification by the
Input Output Co
efficient Organization
(IOCO)."
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CLAUSE 3
2. MR. ASAD UMER, Minister for Finance, Revenue and Economic Affairs to move that in the Finance Supplementary (Second Amendment) Bill, 2019 as introduced in the National Assembly, in clause 3,
(1) the existing sub-clause (4) shall be omitted and existing sub-clauses (1), (2) and (3) shall be re-numbered as (2), (3) and (4), respectively.
(2) Before sub-clause (2), re-numbered as aforesaid, the following new sub-clause (1) shall be inserted, namely:-
"(1) in section 2, the existing clause (11 A) shall be re-numbered as (11B), and after clause (11), the following new clause shall be inserted, namely-
"(11 A) "FBR Refund Settlement Company (Private) Limited" means the company with this name as incorporated under the Companies Ordinance, 1984, for the purpose of settlement of sales tax and income tax refund claims including payment by way of issuing refund bonds under section 67A;";";
(3) in sub-clause (2), re-numbered as aforesaid, for the proposed section 67A, the following shall be substituted, namely:-
"67A. Payment of refund through sales tax refund bonds.- (1)
Notwithstanding anything contained in section 67, the sales tax refunds payable under this Act may also be paid through sales tax refund bonds to be
issued by FBR Refund Settlement Company (Private) Limited, in book-entry form through an establishment licensed by the Securities Exchange Commission of Pakistan as a central depository under the Securities Act, 2015, in lieu of payment to be made through issuance of cheques or bank debit advice.
(2) The Board shall issue a promissory note to FBR Refund Settlement Company Private Limited, hereinafter referred to as the company, incorporating the details of refund claimants and the amount of refund determined as payable to each for issuance of sales tax refund bonds, hereinafter referred to as the bonds, of the same amount.
(3) The bonds shall be issued in values in multiples of one hundred thousand rupees.
(4) The bonds so issued shall have a maturity period of three years and shall bear annual simple profit at ten per cent.
(5) The bonds shall be traded freely in the country's secondary markets.
(6) The bonds shall be approved security for calculating the statutory liquidity reserve.
(7) The bonds shall be accepted by the banks as collateral.
(8) There shall be no compulsory deduction of Zakat against the bonds and sahib-e-nisab may pay Zakat voluntarily according to Shariah.
(9) After period of maturity, the company shall return the promissory note to the Board and the Board shall make the payment of amount due under the bonds, along with profit due, to the bond holders.
(10) The bonds shall be redeemable in the manner as in the preceding sub-section before maturity only at the option of the Board along with simple profit payable at the time of redemption in the light of general or specific policy to be formulated by the Board.
(11) The refund under sub-section (1) shall be paid in the aforesaid manner to the claimants who opt for payment in such manner.
(12) The Federal Government may notify procedure to regulate the issuance, redemption and other matters relating to the bonds, as may be required.";
(4) in sub-clause (3), re-numbered as aforesaid, in paragraph (b), in sub-paragraph (ii), after the semi-colon at the end, the word "and" shall be added;
(5) in the re-numbered sub-clause (4), for the expression "; and", a full stop shall be substituted.
CLAUSE 4
3. MR. ASAD UMER, Minister for Finance, Revenue and Economic Affairs to move
that in the Finance Supplementary (Second Amendment) Bill, 2019 as introduced in the National Assembly, in clause 4,
(1) in the heading, for the expression "4(12)(A)(b), 4(12)(B) and 4(12)(C)(f)'', the express on u4(13)(A)(b) and 4(13)(B)(f>" shall be substituted;
(2) the sub-clauses (1), (2), (3), (4), (5), (6), (7), (8), (9), (10), (11), (12) and (13) shall be re-numbered as (2), (3), (4), (5), (6), (7), (8), (9), (10), (11), (12), (13) and (14) respectively and following new clause shall be inserted, namely:-
"(1) in section 4B, for the expression "to 2020", the words "and onwards"
(2) for sub-clause (4), re-numbered as aforesaid the following shall be substituted, namely:-
"(4) in section 49, after sub-section (4), in the proviso, after the word "licenses", the words "and renewal thereof shall be inserted.'';
(3) in sub-clause (9), re-numbered as aforesaid, the following shall be substituted;
"(9) in section 227C, after clause (b),-
(A) in the first proviso,-
(a) for clause (i), the following shall be substituted, namely:-
"(i) locally manufactured motor vehicle" and
(b) in clause (ii), after the word "Pakistanis", the words "or a nonresident Pakistani citizen holding international passport" shall be inserted;
(B) in the second proviso, in clause (ii), after the word "Pakistanis", the words "or a non-resident Pakistani citizen holding international passport" shall be inserted";
(4) for sub-clause (10), re-numbered as aforesaid, the following shall be substituted, namely:-
"(10) for section 230E, the following shall be substituted, namely:-
"230E Directorate General of International Tax Operations,- (1)
Tie Directorate General of International Tax Operations shall consist of a Director-General and as many Directors, Additional Directors, Deputy Directors, 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 207 upon the Directorate General and its officers.
(3) The functions and powers of the Directorate General of International Tax Operations shall include but not limited to-
(a) receive and send information from other jurisdictions under spontaneous, automatic and on demand exchange of information under exchange of information agreements;
(b) ' levy and recover tax by passing an assessment order under
section 123(1A) in case of undeclared off-shore assets and incomes;
(c) receive, transmit and exchange country by country reports to the jurisdictions that are parties to international agreements with Pakistan and
(d) conduct transfer pricing audit in cases selected for such audit by the Director General of International Tax Operations.
(4) The Board may, by notification in the official Gazette, specify the criteria for selection of the taxpayer for transfer pricing audit.
Explanation.- For the removal of doubt, it is clarified that transfer pricing audit refers to the audit for determination of transfer price at arm's length in transactions between associates and is independent of audit under section 177, 214C which is audit of the income tax affairs of the taxpayer.";
(5) in sub-clause (11), re-numbered as aforesaid, in the proposed sub-section (3), for the word "February", the word "March" shall be substituted;
(6) in sub-clause (13), re-numbered as aforesaid-
(A) in paragraph (A),-
(i) in sub-paragraph (a), in clause (66), after the proposed sub-clause (Ixiv), the following new sub-clause shall be added, namely:-
"(Ixv) SARMAYA-E-PAKISTAN LIMITED";
(ii sub-paragraph (b) is re-numbered as (c) and the following new sub- paragraph shall be inserted, namely:-
"(b) after the omitted clause (103B), the following new clause shall be inserted namely:-
"(103C) Dividend income derived by a company, if the recipient of the dividend, for the tax year has availed group relief under section 59B, computed according to the following formula-
A * B / C
Where-
A is the amount of dividend;
B is the shareholding of the company receiving the dividend in the company distributing the dividend; and
C is the total ordinary share capital of the company distributing the dividend";
(B) after the paragraph (c), re-numbered as aforesaid, the following new paragraph shall be added, namely:-
"(d) after clause (126N), the following new clause shall be inserted, namely:-
"(1260) Profits and gains of a company from a green field industrial undertaking for a period of five years incorporated on or after the first day of July, 2019 provided that the green field industrial undertaking is not formed by the splitting up or reconstitution of an undertaking already in existence or by transfer of machinery or plant from an undertaking established in Pakistan before the commencement of the new business";
(C) Paragraph (B) shall be omitted;
(D) Paragraph (B) omitted as aforesaid, the paragraph (C) shall be re-numbered as
(B) and the existing sub-paragraphs (b), (c), (d), (e) and (f) shall be re-numbered as (d), (e), (f), (g) and (h) respectively and-
(i) in sub-paragraph (a), in clause (11 A), after the proposed sub-clause (xxxii), the following new sub-clauses shall be added, namely:-
"(xxxiii) SARMAYA-E-PAKISTAN LIMITED; and
(xxxiv) Green field industrial undertaking qualifying for
exemption under clause (1260) of Part I of the Second Schedule";
(ii) sub-paragraph (b) re-numbered as aforesaid, the following new sub-
"(36B) The provisions of section 151 shall not apply to profit on debt paid on promissory notes issued under the provisions of Sales Tax Act, 1990;
(36C) The provisions of section 151 shall not apply to profit on debt paid on Pakistan Banao Certificate;
(36D) The provisions of section 150 and 151 shall not apply to profit on debt paid to SARMAYA-E- PAKISTAN LIMITED; and
(36E) The provisions of section 151 shall not apply on profit on debt paid on bonds issued under Federal Government Duty Drawback Bonds Rules, 2019";
(c) after clause (60C), the following new clauses shall be added, namely:-
(60D) The provisions of section 148 shall not apply on import of fire fighting equipments by industrial undertakings set up in the special economic zones established by the Federal Government.""
(iii) in paragraph (h), re-numbered as aforesaid, in the proposed clause "(111)", after the word "company", the words "as defined in the said
"(14) in the Seventh Schedule, after rule 7C, the following new rules shall be inserted, namely:-
"7D. Reduced rate of tax on additional advances for micro, small and medium enterprises.- (1) The taxable income arising from additional advances to micro, small and medium enterprises, for the tax years 2020 to 2023, shall be taxed at the rate of 20% instead of the rate provided in Division II of Part I of the First Schedule.
(2) A banking company shall furnish a certificate from external auditor along with accounts while e-filing return of income certifying the amount of such advances made in preceding tax year, additional advance made for the tax year and net mark-up earned from such additional advances for the tax year.
(3) Notwithstanding anything contained in this Ordinance, the Commissioner may require the banking company to furnish details of the advances to micro, small and medium enterprises.
(4) For the purposes of this rule, the . term "micro, small and medium enterprises" shall have the same meaning as provided in Prudential Regulations issued by State Bank of Pakistan.
(5) Additional advances means any average advances disbursed in addition to average amount of such advances made in such sector by the bank for the tax year 2019.
(6) The taxable income arising from additional advances under sub rule (1) shall be determined according to the following formula, namely:-
Taxable income subject to reduced rate of tax = A x B/C Where-
A is taxable income of the banking company
B. is net mark-up income earned from such advances for the tax year as declared in the annual accounts; and
C. is total of the net mark-up, non mark-up income of the banking company as per accounts.
7E. Reduced rate of tax on additional advances for low cost housing.- (1) The taxable income arising from additional advances for low cost housing, for the tax years 2020 to 2023, shall be taxed at the rate of 20% instead of the rate provided in Division II of Part I of the First Schedule.
(2) A banking company shall furnish a certificate from external auditor along with accounts while e-filing return of income certifying the amount of such advances made in preceding tax year, additional advance made for the tax year and net mark-up earned from such additional advances for the tax year.
(3) Notwithstanding anything contained in this Ordinance, the Commissioner may require the banking company to furnish details of the advances made for low cost housing.
(4) For the purposes of this rule, the term "low cost housing" shall have the same meaning as provided in Prudential Regulations issued by State Bank of Pakistan.
(5) Additional advances means any average advances disbursed in addition to average amount of such advances made in such sector by the bank tor the tax year 2019.
(6) The taxable income arising from additional advances under si b-rule (1) shall be determined according to the following formula, namely:-
Taxable income subject to reduced rate of tax = A * B/C
Where-
A is taxable income of the banking company
B is net mark-up income earned from such advances for the tax year as declared in the annual accounts; and
C is total of the net mark-up, non mark-up income of the banking company as per accounts.
7F. Reduced rate of tax on additional advances as Farm
Credit.- (1) The taxable income arising from additional advances for Farm Credit in Pakistan, for the tax years 2020 to 2023, shall be taxed at the rate of 20% instead of the rate provided in Division II of Part I of the First Schedule.
(2) A banking company shall furnish a certificate from external auditor along with accounts while e-filing return of income certifying the amount of such advances made in preceding tax year, additional advance made for the tax year and net mark-up earned from such additional advances for the tax year.
(3) Notwithstanding anything contained in this Ordinance, the Commissioner may require the banking company to furnish details of the advances made for Farm Credit.
(4) For the purposes of this rule, the term "Farm Credit" shall have the same meaning as provided in Prudential Regulations issued by State Bank of Pakistan for agriculture financing excluding such advances made to a company as defined in section 80.
(5) Additional advances means any average advances disbursed in addition to average amount of such advances made in such sector by the bank for the tax year 2019.
(6) The taxable income arising from additional advances under suo-rule (1) shall be determined according to the following formula, namely:-
Taxable income subject to reduced rate of tax = A x B/C
Where-
A. is taxable income of the banking company
B. is net mark-up income earned from such advances for the tax year as declared in the annual accounts; and
C. is total. of the net mark-up, non mark-up income of the banking company as per accounts"".
CLAUSE 5
4. MR. ASAD UMER, Minister for Finance, Revenue and Economic Affairs to move
that in the Finance Supplementary (Second Amendment) Bill, 2019 as introduced in the National
Assembly, in clause 5,
(i) in sub-clause (2), in paragraph (a), in sub-paragraph (ii), in column (1), against newly proposed S. No. 58B, in column (2), for the figure "1800", the figure "1700" shall be substituted;
STATEMENT OF OBJECTS AND REASONS
5. MR. ASAD UMER, Minister for Finance, Revenue and Economic Affairs to move
that in the Finance Supplementary (Second Amendment) Bill, 2019 as introduced in the National
Assembly, in the Statement of Objects and Reasons,
(1) for the expression "2(2)(ii)", the expression "2(2)(iii)" shall be substituted; and
(2) for the expression "2(l)(a), 2(2X0,4(1), 4(2), 4(12)(A)(b), 4(I2)(B), 4(12)(C)(d), 4(12)(C)(f) and 4(13)(A)", the expression "4(13)(A)(b) and 4(13)(B)(f)" shall be substituted.
Islamabad, the TAHIR HUSSAIN
6th March. 2019. Secretary.
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