RECORDER REPORT

ISLAMABAD: The withholding tax under the provision of section 148 of Income Tax Ordinance, 2001 shall not apply on import of equipment for rail-based mass transit projects in Lahore, Karachi, Peshawar and Quetta under China Pakistan Economic Corridor (CPEC). According to SRO 44 (1)/2017 issued here on Friday, pursuant to the approval of the Economic Co-ordination Committee of the Cabinet vide case No ECC-2/1/2017, dated the 6th January, 2017, the federal government has amended Second Schedule of the Income Tax Ordinance.

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 percent of the gross amount of payment. The provision of section 148 of the Income Tax Ordinance, 2001 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 the CPEC, the FBR added.