budget amendments 2013 2014

BUDGETRY AMENDMENTS-2013-2014

SALES TAX

1. Introduction of CREST (Computerized Risk-Based Evaluation of Sales Tax). [Section 2 Clause 5AC]

In section 2 after clause 5AB new clause 5AC introduced: ”CREST”, The Federal Board of Revenue (FBR)'s indigenously developed Sales Tax IT system i.e. Computerized Risk-Based Evaluation of Sales Tax (Crest) will process all Sales Tax refund claims on the basis of data captured in sales tax returns and no separate CD would be required from registered person for processing of claim. The Crest has given new dimension to the whole scheme of processing of claims by checking and verification of supply chain to avert tax frauds with facilitation to the genuine registered units.

2. Amendments in the Definition of Provincial Sales Tax

[Section 2 Clause 22A]Definition of Provincial Sales Tax seek to be amended before that it was defined separately. New definition is as under:Provincial Sales Tax” means tax levied under provincial laws or laws relating to Islamabad Capital Territory, which are declared by the Federal Government through notification in the official Gazette, to be provincial sales tax for the purpose of input tax.

3. Introduction of Supply Chain

[Section 2 Clause33A]In section 2 after clause 33 new clause 33A introduced: Series of transaction from Ist Stage of Import/Purchase to the final stageof supply end.

4. Time of Supply elaborated [Section 2 Clause 44a]In section 2 clause 44 after the word “recipient of the Supply” the words “or the time when any payment us received by supplier in respect of that supply whichever is earlier”. Time of supply now can be fulfilled in both ways i.e. either by delivery of goods or payment is received by the supplier in respect of that supply. Before it was only met by supply of goods or supply made available to recipient.

5. Rate of Tax Increased from 16% to 17% [Section 3a]Rate of Sales Tax Increased from 16% to 17%. This is only applicable where the word 16% occurring.

(Effective from 13, June, 2013)

6. 2% Further Tax will be charged where taxable supplies are

made to a Unregistered Person [Section 3(1A)]In Section 3 after subsection (1) following subsection namely (1A) added ”Where taxable supplies are made to unregistered person further tax of 2% will be charged in addition to 17%.


7. SALES TAX ON THE BASIS OF CAPACITY OR ON A FIXED BASIS[Section 3(1B)]A new sub section (1B) is proposed to be inserted in section 3 empowering the Federal Government to impose sales tax on the basis of production capacity of manufacturers or on a fixed basis instead of the sales tax payable on the generalized basis i.e. ‘value of supply’ under section 3(1).


2

8. Substitution of Word “tax at such extra rate or amount” [Section 3 (5c)]In Section 3 after subsection (5) following word will be substituted “Tax at such rate or amount before that it was “such extra amount of tax”

(Effective from 1st July, 2013)

9. Registered Person shall not be allowed or reclaim or deduct input tax paid If Discrepancy is indicated by CREST[Section 8 Subsection 1 clause (caa)]In Section 8 after subsection (1), Sub-clause (ca) a new sub-clause (caa) inserted which clarifies that if a registered person shall not be allowed or reclaim input tax if discrepancy found by CREST Or Input Tax which is not verifiable in supply-chain i.e. (your purchase/sale didn’t match).

10. Omission of Word & Figure

[Section 21 Subsection 3]In Section 21 after subsection (3), the words and figure “unless the registered buyer has fulfilled his responsibilities under section 73” shall be omitted

11. Investigation and Appropriate legal action if registered person

is engaged in issuing fake or flying invoices, claiming fraudulent input tax or refunds, does not physically exist or conduct actual business, or is committing any other fraudulent activity [Section 21 Subsection 3]In Section 21 after subsection (3), new subsection (4) shall be

added: “If Board, the Commissioner or any other Officer authorized by the board has reasons to believe that a registered person is engaged in issuing fake or flying invoices, claiming fraudulent input tax or refunds, does not physically exist or conduct actual business, or is committing any other fraudulent activity the

3

Board, Commissioner or such officer may after recording reasons in writing, block the refunds or input tax adjustments of such person and direct the concerned Commissioner having jurisdiction for further investigation and appropriate legal action.”

12. Omission of word “and” [Section 22 (1e)]In Section 22, subsection (1), after clause (e) the word “and shall be omitted

13. Responsibility of Registered Person to keep a record relating to gate passes, inward or outward and transport receipts [Section 22 (1ea)]In Section 22, subsection (1), after clause (e) new clause (ea) added which states that it is the responsibility of registered person to keep a record of gate passes, inward or outward and transport receipts.

14. Addition of Explanation for removal of doubts in terms of Power of Board, commissioner or officer of inland revenue as compared with Section 72B[Section 25 Subsection 5]In Section 25, subsection (5), explanation is added which clarifies the doubt in terms of Power of board, commissioner or officer of inland revenue in comparison with section 72B i.e. nothing contained in section 72B restricts the power of board, commissioner or officer of inland revenue to have access to premises, stocks, accounts, records, etc. under these sections or to conduct audit under these sections.

15. Now Board & Chief Commissioner can post Officer Inland Revenue to the premises of registered person or class of such persons to monitor production, sale of taxable goods and stock positions before that only board can appoint Officer Inland Revenue [Section 40B]

4

In Section 40B, along with the word “Board” a new word shall be added “or Chief Commissioner”. Now both Board & Chief Commissioner can post Officer in land revenue to the premises of registered person or class of such persons to monitor production, sale of taxable goods and stock positions

16. Monitoring or Tracking by electronic or other means

[Section 40C]After Section 40B, new Section 40C shall be inserted which

states that 1. As the Board specify by notification in official gazette specify

any registered persons any class of person or any good or class of goods in respect of which monitoring or tracking of production, sales, clearances, stocks or any other related activity may be implemented through electronic or other means as may be prescribed.

2. From the date as prescribed by board the said manufacturer or any other person cannot sold or remove taxable goods without affixing tax stamp, banderole, stickers, labels, etc. in any such form, style and manner as may be prescribed by the Board in this behalf

17. if undue hardship faced by the tax payer a Stay for a period not exceeding 30 days may be granted on recovery of tax by Commissioner(Appeals) [Section 45B subsection 1]After Section 45B, subsection 1 following new subsection shall be

inserted:In a particular case if Commissioner (Appeals) of the opinion that a registered tax payer is facing undue hardship after being heard to Commissioner or Officer inland revenue may grant stay of 30 days for recovery of that tax.

18. Rectification of mistake [Section 57 subsection 1]For Section 57B, following shall be substituted:

5

1. If there is a mistake specified by tax payer or on his own motion the Order passed by Commissioner, the Commissioner (Appeals) or the Appellate Tribunal may rectify any mistake apparently by passing another Order.

2. The Order passed under Subsection 1 has no effect in increasing an assessment or reducing a refund or otherwise applying adversely to the tax payer shall be made unless the taxpayer has been given a reasonable opportunity of being heard.

3. Where there is clear indication of a mistake and same is notified to the Commissioner or Commissioner (Appeals), as the case may be, and no order has been made under sub-section (1), before the expiration of the financial year next following the date on which the mistake was brought to their notice, the mistake shall be treated as rectified and all the provisions of this Act shall have effect accordingly.

4. No order under sub-section (1) shall be made after five years from the date of the order sought to be rectified.

19. Reward to Inland revenue Officers and Officials [Section 72C]After Section 72B, following new section shall be inserted:1. Cash reward shall be sanctioned to the officers and officials

of Inland Revenue in the cases involving concealment or evasion of sales tax and other taxes.

2. Board by notice specify the apportionment of reward sanctioned under this section for individual performance or to collective welfare of the officers and officials of Inland Revenue.

20. Bank Account Updated by STR-I Form [Section 73]In Section 73, in the explanation after the word “is registered” the words, letters and figure “through Form STR 1 or change of particulars in registration database” shall be inserted:A registered person now updates his bank account through STR-1 Form or change of particulars in registration.

6

21. Following new Serials Numbers and entries relating thereto shall be added 3 rd Schedule: [Effective June 13, 2013]With regard to goods specified in the Third Schedule, sales tax at retail price is collected from the manufacturer. The scope of Third Schedule is extended to following goods:

Sr. No Description

Heading Nos of the First Schedule to the Customs Act 1969(IV of 1969)

22Finished or made-up articles of textile and leather, including garments, footwear, and bed ware, sold in retail packing

Respective headings.

23

Household electrical goods, including air conditioners, refrigerators, deep freezers televisions, recorders and players, electric bulbs, tube-lights, fans, electric irons, washing machines and telephone sets


24

Household gas appliances, including cooking range, ovens, geysers and gas heatersRespective headings.


25 Foam or spring mattresses, and other foam products for household use Respective headings.

26 Auto parts and accessories sold in retail packing Respective headings.

27Lubricating oils, brake fluid, transmission fluid, and other vehicular fluids and maintenance products in retail packing


28 Tyres and tubes Respective headings.29 Storage batteries Respective headings.30 Arms and ammunition Respective headings.

31

Paints, distempers, enamels, pigments, colors, varnishes, gums, resins, dyes, glazes, thinners, blacks, cellulose lacquers and polishes sold in retail packing


32 Fertilizers Respective headings.

7

33 Cement sold in retail packing Respective headings.34 Tiles sold in retail packing Respective headings.

35 Biscuits, confectionary, chocolates, toffees and candies Respective headings.

36 Other goods and products sold in retail packing Respective headings.

22. Withdrawal of Exemptions;[Effective June 13, 2013]Withdrawal of exemptions from sixth Schedule; Following entries are proposed to be omitted from the Sixth Schedule to the Act:

- Milk preparations obtained by replacing one or more of the constituents of milk by another substance, whether or not packed for retail sale. PCT heading 1901.1000, 1901.9020 and 1901.9090– omitted from 6th Schedule

- Supplies against International Tender- omitted from 6th Schedule.

23. Withdrawal of Zero rating Facility;[Effective June 13, 2013]

i) Withdrawal of Zero rating facility by Rescinding various sales tax and federal excise notifications

S.No.

Withdrawal SRO No. After Amendments

01S.R.O. 646(I)/2005 dated 30th June,2005

Zero rating on supply of hydrogen, nitrogen andhelium falling under PCT headings 2804.1000,2804.3000 and 2804.2990 by M/s BOC PakistanLimited to M/s Pakistan PTA Limited.

02 S.R.O. 172(I)/2006 dated 24th

February, 2006Exemption from sales tax available to members ofPakistan Film Producers Association

8

(PFPA) onimport of specified goods used in production of film making.

03 S.R.O. 863(I)/2007 dated 24th

August, 2007Consequent to exemption allowed and withdrawal of zero rating earlier available under SRO 549(I)/2008, the facility available under thisnotification for sales-tax free procurement of rawmaterials, sub-components, components, subassemblies and assemblies (imported or local) by manufacturers of following goods has also been taken awayS.No.

Description of goods

PCTHeadings

01 Colors in sets 3213.100002 Writing, drawing

andmarking inks

3215.9010 and3215.9090

03 Erasers 4016.9210 and4016.9290

04 Exercise books 4820.200005 Pencils

sharpener 8214.1000

06 Geometry box 9017.200007 Pens, ball pens,

markers and poroustipped pens

96.08

8. Pencils including color pencils

96.09

9. Milk including flavoured milk

04.01 and0402.9900

10. Yogurt 0403.1000 11 Cheese 0406.1010

9

12 Butter 0405.100013 Cream 04.01 and

04.0214 Desi Ghee 0405.900015 Whey 04.0416 Milk and cream,

concentrated andadded sugar or othersweetening matter

0402.1000

17 Preparations forinfant use put up forretail sale

1901.1000

18 Fat filled milk 1901.909004 S.R.O. 160(I)/2010 dated 10th

March, 2010Amnesty from payment of default surcharge andpenalties available on payment of principalamounts by June 30, 2010 to registered person(other than cement, sugar, beverages andcigarette sectors) located in Hangu, Bannu, Tank,Kohat, Chitral, Charsadda, Peshawar, Dera IsmaelKhan, Batagram, Lakki Marwat, Sawabi andMardan. No concession is currently availableunder this notification, being time specific.

05 S.R.O. 161(I)/2010 dated 10th

March, 2010Withdrawal of exemption on whole of the amount of additional duties and penalties payable by a registered person located in Agencies of Bajaur,

10

Mohmand, Khyber, Orakzai, Kurrum, North Waziristan and South Waziristan

06 S.R.O. 162(I)/2010 dated 10th

March, 2010Withdrawl of exemption of central excise duty in areas Bajaur Agency, Mohmand Agency, Khyber Agency, Orakzai Agency, Kurrum Agency, North Waziristan Agency and South Waziristan Agency

07 S.R.O. 163(I)/2010 dated 10th

March, 2010Withdrawal of exemption of federal excise duty leviable on goods produced or services rendered in the areas Districts of Hangu, Bannu, Tank, Kohat and Chitral, Districts of Charsadda, Peshawar, Dera Ismael Khan, Batagram, Lakki Marwat, Sawabi and Mardan.

08 S.R.O. 164(I)/2010 dated 10th

March, 2010Withdrawal of exemption of sales tax leviable on supply of electricity by Peshawar Electric Supply Company or any other duly registered Electric Supply Company to manufacturing units (having industrial connections) whether registered or not, located in districts of Hangu, Bannu, Tank, Kohat, Chitral, Charsadda, Peshawar, Dera Ismael Khan, Batagram, Lakki Marwat, Sawabi and Mardan.

09 S.R.O. 117(I)/2011 dated 10th

February, 2011Withdrawal of fifty per cent of the rate leviable under sub-section (1) of section 3 of the Sales Tax Act, 1990 under Prime Minister’s Fiscal Relief to Rehabilitate the Economic Life in Khyber Pakhtunkhwa, FATA and PATA,

11

namely, Bajaur Agency, Mohamand Agency, Khyber Agency, Orakzai Agency, Kurram Agency, North Waziristan Agency, South Waziristan Agency, Malakand Agency, District Swat, District Buner, District Shangla, District Upper Dir and District Lower Dir

10 S.R.O. 180(I)/2011 dated 05th

March, 2011Withdrawl of 50% reduction in sales tax was available on supply of goods by the registered persons (other than cement, sugar, beverages andcigarette sectors) located in districts of Hangu, Bannu, Tank, Kohat, Chitral, Charsadda, Peshawar, Dera Ismael Khan, Batagram, Lakki Marwat, Sawabi, Nowshera and Mardan.

11 S.R.O. 200(I)/2010 dated 14th

March, 2011 Withdrawal of fifty percent of the rate leviable under sub-section (1) of section 3 of the Sales Tax Act, 1990 districts of KPK

12 S.R.O. 201(I)/2010 dated 14th

March, 2011Withdrawal of fifty percent of the rate leviable under sub-section (1) of section 3 of the Sales Tax Act, 1990 districts of KPK

S.R.O. 500(I)/2013, dated the 12th June, 2013ii) Withdrawl of Zero Percent Rate of Sales Tax And

Substituted With Exemption on following Goods.[Effective June 13, 2013]

‘Zero rating’ [available under SRO 549(I)/2008 dated June 11, 2008] has been withdrawn and ‘exemption’ from whole of sales tax has been extended with the exception of Cotton Seed Oil. This effectively means

12

that input tax, if any, for such products will not be available. Earlier, input tax borne by the manufacturer was refundable.Zero rating on ‘Cotton Seed Oil’, supplied to registered manufacturer of vegetable ghee

and cooking oil, has been withdrawn. However, it has not been granted exemption from

sales tax. Therefore, it is now chargeable to sales tax at the rate of 17 per cent. List of

exempted goods (previously zero rated):

S.No.

Description of GoodsAmendme

nts01 Cotton Seeds (PCT Heading 107.2000) Omitted02 Oil Cake and other Solid Residues, Whether or not

ground or in the form of pellets (PCT Heading 2306.1000)

Omitted

03 (i). Uncooked poultry meat (PCT Heading 02.07); (ii). Milk (PCT Heading 04.01); (iii). Flavored Milk (PCT Headings (0402.9900 and 22.02);

(iv). Cream (PCT Heading 04.01 and 04.02);

(v). Milk and cream, concentrated or containing added sugar or other sweetening matter (PCT Headings

0402.1000, 0402.2100, 0402.2900, 0402.9100 and 0402.9900)

(vi). Yogurt (PCT Heading 0403.1000);

(vii). Whey (PCT Heading 04.04); and

(viii). Butter (PCT Heading 0405.1000);

Omitted

13

(ix). Desi ghee (PCT Heading 0405.9000);

(x). Cheese (PCT Heading 0406.1010);

(xi). Processed cheese not grated or powdered (PCT Heading 0406.3000)

(xii). Frozen, prepared or preserved sausages and similar products of poultry meat or meat offal (PCT Heading 1601.0000);

(xiii). Meat and similar products of prepared frozen or preserved meat or meat offal of all types including poultry meat and fish (PCT Headings 1602.3200, 1602.3900, 1602.5000, 1604.1100, 1604.1200, 1604.1300, 1604.1400, 1604.1500, 1604.1600, 1604.1900, 1604.2010, 1604.2020, 1604.2090, 1604.3000);

(Xiv)Fat filled milk (PCT Heading1901.9090);

(xvi). Soyabean meal (PCT Heading 2304.0000);

(xviii). Colours in sets (Poster colours) (PCT Heading 3213.1000)

(xix). Writing, drawing and marking inks (PCT Headings 3215.9010 and 3215.9090);

(xx). Erasers (PCT Headings 4016.9210 and 4016.9290)

(xxi). Exercise books (PCT Heading 4820.2000);

14

(xxii). Remeltable scrap (PCT Heading 72.04);

(xxiii). Pencil sharpeners (PCT Heading 8214.1000)

(xxiv). Sewing machines of the household type (PCT Headings 8452.1010 and 8452.1090);

(xxv). Dedicated CNG buses and all other buses meant for transportation of forty or more passengers whether in CBU or CKD condition (PCT Heading 87.02);

(xxvi). Trucks and dumpers with g.v.w. exceeding 5tonnes (PCT Heading (87.04);

(xxvii). Bicycles (PCT Heading 87.12); (xxviii). Trailers and semi-trailers for the transport of goods having specifications duly approved by the Engineering Development Board (PCT Heading 87.16);

(xxix). Road tractors for semi-trailers, prime movers and road tractors for trailers whether in CBU condition or in kit form (PCT Headings 8701.2010, 8701.2020, 8701.2030, 8701.2090,8710.9030, 8701.9040, 8701.9050 and 8701.9060);

(xxx). Purpose built taxis, whether in CBU or CKD condition (PCT Headings 8703.3226 and 8703.3227) which are built on girder chassis and having following features, namely:-

(xxxi). Attack resistance central division along with payment tray;

15

(xxxii). Wheelchair compartment with folding ramp; and

(xxxiii). Taximeter and two-way radio system;

(xxxiv). Vessels for breaking up (PCT Heading 89.08);

(xxxv). Other drawing, marking out or mathematical calculating instruments (geometry box) (PCT Heading 9017.2000)

(xxxvi). Pens and ball pens (PCT Heading 96.08) and

(xxxvii). Pencils including colour pencils (PCT Heading 96.09);

04 Compost (non-chemical fertilizer) Omitted05 Energy saver lamps (PCT heading 8539.3910). Omitted06 Construction materials to Gawadar Export Processing Zone’s

investors and to Export Processing Zone Gawadar for development of Zone’s infrastructure

Omitted

07 Wheelchair PCT 8713.1000, 8713.9000 Omitted08 Cotton Seed Oil Omitted

S.R.O. 501(I)/2013, dated the 12th June, 2013S.R.O. 502(I)/2013, dated the 12th June, 2013

24. FINISHED CONSUMER GOODS OF FIVE EXPORT-ORIENTED SECTORSAmendment in SRO 1125(I)/2011 dated December 31, 2011[Effective 12, June, 2013]

- Through the subject notification now finished goods in case of leather, textile, Carpets, sports goods, surgical goods are now charged at 17%., with effect from June 12, 2013, the concession has been restricted to goods other than ‘finished’ articles. Consequently, the local sale of these ‘finished articles’ such as ‘garments’ now attracts sales tax at the rate of 17 per cent.

16

- Against Serial number 56, in column (2), after the word “preparations” the word “excluding master batches shall be added;

- “Shoe Adhesive” PCT 3506.9110 now omitted from SRO.S.R.O. 504(I)/2013, dated the 12th June, 2013

25. Amendments in the Sales Tax Special Procedure (Withholding Rules 2007WITHHOLDING ON SUPPLIES FROM UNREGISTERED PERSON - EXTENDED

[Rule 2(3)][Effective June 12, 2013]At present, only following persons are required to withhold sales tax on purchase of taxable goods from unregistered persons:

- Federal and provincial governments- Autonomous bodies- Public sector organizations

Now all companies who are withholding agents under these Rules and persons registered as exporters are also required to withhold sales tax on purchase of taxable goods from unregistered persons

S.R.O. 505(I)/2013, dated the 12th June, 2013

26. Amendments in the Sales Tax Rules 2006PLACE OF JURISDICTION[Rule 5(1)][Effective July 1, 2013]

Presently, the jurisdiction over the case of a corporate person lies with the Regional Tax Office (RTO) or Large Taxpayers Unit (LTU), in whose jurisdiction the registered office is located whereas in the case of a non-corporate person, it is determined with reference to the place where the business is actually carried on and in case of both business premises and manufacturing unit

17

in different areas, the jurisdiction is determined with reference to the place of manufacturing unit.

The amendment sets out a revised and uniform basis for determination of place of jurisdiction as follows:

- Following change in clauses (a), (b), (c) in rule 5 i.e (Application for registration), in sub rule (1):

Determination of Jurisdiction having a single manufacturing unit or business

a) Jurisdiction is determined where the manufacturing unit or business premises is actually located in both corporate & non-corporate person.

Determination of Jurisdiction having a multiple manufacturing unit or business

b) Board may decide the place of registration of such person

- Chapter VIIA (ZERO-RATING OF SUPPLIES AGAINST INTERNATIONAL TENDER FOR AFGHAN REFUGEES) and the rules thereunder shall be omitted.

(W.e.f 1st day of July, 2013)


27. Levy of Extra 5% on supplies of electric power and natural Gas having Industrial or Commercial Connections who are unregistered or are not on Active Tax Payer List.

Industrial or Commercial connections who are unregistered or not on active taxpayer list maintained by Federal Board of Revenue will be extra 5% of total bill excluding the amount of federal taxes if there bill exceeds rupees fifteen thousand in any month.


28. Amendments in the Sales Tax Special Procedure Rules 2007[Effective from June 13, 2013]After Chapter IV, new Chapter VIA shall be inserted:

18

“Special Procedure for collection and payment of extra tax on supplies of electric power and natural gas consumes by unregistered and inactive persons”

18B. Mode & Manner of Collection

1) Industrial or Commercial connections who are unregistered or not on active taxpayer list maintained by Federal Board of Revenue will be extra 5% of total bill excluding the amount of federal taxes if there bill exceeds rupees fifteen thousand in any month.

2) The amount of extra tax will be shown separately in the bill or invoice.

18C. Conditions & Limitations

1) Extra Tax shall not be adjustable by the supplier or consumer in their returns and shall be paid in full by the supplier in to the treasury.

2) The Supplier of Electric or Natural Gas verify the name address and other particulars appearing on the registration certificate and also verify same from Active Tax Payer List if a person claims that he has a sales tax registration number.

3) Multiple places of business shall ensure that all such places of business are properly declared and entered on his registration certificate and Taxpayer List.

4) The Supplier of Electric or Natural Gas after above said verification shall incorporate the Sales Tax registration number in billing system so that it is printed in future bills. Thereafter, the supplier shall stop charging and collecting the extra tax from such person.

5) If registered person is deregistered or inactive from ATL List supplier shall again start charging and collecting extra tax.


FEDERAL EXCISE

19

1. FURTHER DUTY[Section 3]The Bill proposes to levy a ‘Further Duty’ at the rate of two per cent of the value in addition to the normal rate, when excisable goods and services are supplied to a person who has not obtained a registration number. Federal Government will be empowered to issue a notification in the official gazette to specify the excisable goods and services where upon such further duty will be charged, levied and collected.

2. RECORDS[Section 17]Every person registered for FED Act is required to maintain and retain records of excisable goods purchased, manufactured and cleared by him or by his agent for the specified period. Such records will now include, inward and outward gate passes and transport receipts.

3. APPEALS TO COMMISSIONER (APPEALS)[Section 33]The Bill proposes to expressly empower the Commissioner (Appeals) to stay the recovery of tax for a period not exceeding 30 days in aggregate, where in a particular case, he is of the opinion that the recovery of tax levied shall cause undue hardship to the taxpayer.

It is important to note that under section 37(1), the Commissioner (Appeals), in any particular case, is already empowered to dispense with the deposit of duty demanded or penalty imposed, subject to such conditions as he may deem fit to impose so as to safeguard the interest of revenue. The order for such dispensation, however, ceases to have effect on the expiration of a period of 6 months from the date of the dispensation order or decision of appeal, whichever is earlier

4. POWERS OF FBR OR COMMISSIONER TO PASS CERTAIN ORDERS[Section 35]An Explanation has been inserted to clarify that the powers of FBR, Commissioner or Officer of Inland Revenue vested under sections 35, 45 and 46 are independent of the powers of the FBR under section 42B. It has further being clarified that nothing contained in section 42B restricts the powers of FBR, Commissioner or officer of Inland Revenue under the aforesaid sections or to conduct audit.

20

5. REWARD TO INLAND REVENUE OFFICERS AND OFFICIALS[Section 42C]It is proposed to reward officers and officials of Inland Revenue for their meritorious conduct in cases involving concealment or evasion of excise duty and other taxes. Moreover, the informer providing credible information leading to such detection would also be rewarded after realization of part or whole of the taxes involved in such cases. It is proposed that FBR may by notification prescribe the procedure to specify the apportionment of reward for individual performance or to collective welfare of the officers and officials of Inland Revenue.

6. MONITORING OR TRACKING BY ELECTRONIC OR OTHER MEANS[Section 45A]It is proposed that FBR may by notification prescribe the procedure to specify any registered person or class of registered persons or any goods or class of goods in respect of which monitoring or tracking of production, sales, clearances, stocks or any other related activity may be implemented through electronic or other means, as may be prescribed. Moreover, excisable goods shall not be removed or sold by the manufacturer or any other person without affixing tax stamp, banderole, stickers, labels, etc. in any such form, style and manner as may be prescribed by FBR.

7. FIRST SCHEDULEREVISION IN DUTY(TABLE I – EXCISABLE GOODS)AERATED BEVERAGESThe rate of duty is proposed to be enhanced from 6% to 9% of retail price for following goods with effect from July 1, 2013:

S.No.Description of Goods Heading Number

4. Aerated waters 2201.1020

5.Aerated waters, containing added sugar or othersweetening matter of flavoured

2202.1010

6. Aerated waters if manufactured wholly from juicesor pulp of vegetables, food grains or fruits and

RespectiveHeadings

21

which do not contain any other ingredient,indigenous or imported, other than sugar, colouringmaterials, preservatives or additives in quantitiesprescribed under the West Pakistan Pure FoodRules, 1965

LOCALLY PRODUCED CIGARETTESDescription and duty on the locally produced cigarettes (PCT heading 24.02) has been revised as under, with effect from June 13, 2013

S.No.

Description of Goods Revised Rate of Duty

9.

Locally produced cigarettes if their on-packprinted retail price exceeds rupees twothousand two hundred and eighty six perthousand cigarettes

Rupees two thousand three hundred andtwenty five per thousand cigarettes

10.

Locally produced cigarettes if their on-packprinted retail price does not exceed rupeestwo thousand two hundred and eighty sixper thousand cigarettes

Rupees eight hundred and eighty perthousand cigarettes

8. Repayment-Cum-Drawback of Sales Tax and Federal Excise Duty to the Registered Person on the export of vegetable Ghee, Cooking Oil & Margarine

The Clause (iv) of serial No. 3 in column 3 shall be omitted:

Clause iv is as under:“100% of federal excise duty, including the duty paid under the Notification No. S.R.O.24(I)/2006, dated the 7th January, 2006, paid at import stage on the same quantity of edible oil as exported to Afghanistan, by the units located in the violence affected areas specified in Sales Tax General Order 01/2010, dated the 20th January, 2010:


22

9. Levy Fixed Amount of Federal Excise Duty one ruppee on Locally produced oil purchased by manufacturer of vegetable ghee and cooking oil

Levy of fixed amount of federal excise duty at the rate of one rupee per kilogram of locally produced oil purchased by a manufacturer of vegetable ghee and cooking oil, instead of the federal excise duty payable @16%. Which shall be paid by the producer or manufacturer of vegetable ghee and cooking oil along with his monthly return for the tax period in which locally produced oil is purchased

If the Stocks of locally produced oil purchased before 12th June, 2013 and lying in the premises of vegetable ghee and cooking oil producer or manufacturer on the said date shall be paid along with return filed for June, 2013 in accordance with the above specified rate


10. Levy Fixed Amount of Federal Excise Duty Forty Paisa Per Kilogram on Oilseeds, at the import stage

Levy fixed amount of federal excise duty of forty paisa per kilogram on oilseeds, at the import stage instead of federal excise duty payable at production or manufacturing stage of vegetable ghee or cooking oil.

11. MOTOR VEHICLESIt is proposed to charge duty on motor vehicles as under, with effect from June 13, 2013:

S.No.

Description of Goods PCT Heading Rate of Duty

55

Motor cars, SUVs and other motor vehicles of cylinder capacity of 1800 cc or above, principally designed for the transport of persons (other than those of headings 87.02), includingstation wagons and racing cars of cylinder capacity of 1800 cc or above

87.03 Ten per cent ad.val

23

12. THIRD SCHEDULETABLE I – GOODSThe duty in respect of the following goods is proposed to be withdrawn, effective June 13, 2013:

S.No.

Description of Goods PCT Heading

5

Hydraulic cement imported or purchased locally by petroleum or energy sector companies or projects subject to the same conditions and procedures as are applicable for the purposes of exemption ofcustom duty,

2523.9000

7Lubricating oil if supplied to Pakistan Navy for consumption in itsvessels

Respectiveheading

8

Transformer oil if used in the manufacture of transformers suppliedagainst international tenders to a project financed out of fundsprovided by the international loan or aid giving agencies

Respectiveheading

Note: If you have any query please don’t hesitate to contact us at the following Nos. or e-mail at this address.

Ph. # 021-32722828-9, Fax # 021-32726449E-mail: [email protected]

Yours truly,

The Sales Tax Services

24

budget amendments 2013 2014

Technology