The second session of Post Budget Conference 2019 held at a local hotel, which covered the topic of indirect taxation with main speaker Asim Zulfiqar Ali, FCA. Rana Muhammad Usman Khan moderated the session while the panelists included Naeem Akhtar Sheikh, FCA, Rafqat Hussain, FCA, Ejaz Hussain Rathore, FCA and Muhammad Raza, FCA.
In his presentation, Asim Zulfiqar Ali, FCA spoke in length about the amendments proposed in Sales Tax and Federal Excise Duty.
He said the general rate has been kept at 17 percent. However, certain steps have been proposed for documenting the economy and strengthening of tax structure.
He said the proposed amendments also aim to consolidate the special procedures governing various sectors in the main law as well as eliminate the culture of issuance of notifications/ Sales Tax General Orders.
Regarding the cottage industry, he said the proposed amendments are conceptually rational; however, limit of annual turnover of less than Rs 2 million would create enforcement issues.
Sales Tax to be charged on Retail Price of certain imported goods. This concept/practice is currently applicable under FED for imported cigarettes and this could be followed.
On 'Value of Supply' for toll manufacturing, he said dispute/controversy with provincial sales tax is still unresolved. Honorable Lahore High Court has already referred the matter to both authorities for appropriate resolution.
Presently, he said, withholding provisions are contained in Sales Tax Special Procedure (Withholding) Rules, 2007. The Bill proposes to insert Eleventh Schedule prescribing the rates of withholding tax by specified withholding agents in manner and mode to be prescribed by the Board. Certain provisions contained in the Rules excluding a number of sectors/persons from applicability of withholding sales tax provisions have however not been incorporated in the Schedule, he added.
He said it is proposed to omit restrictions related to audit once in every three years.
He further proposed power of the Board to specify goods subject to zero rating through a general order in certain cases is proposed to be withdrawn.
According to him, power of Federal Government to issue notifications in following matters is proposed to be transferred to the Board (with the approval of the Minister-in-charge)
This presentation was followed a panel discussion and Q&A session.