Budget amendments 2013 2014


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Sales Tax & federal Excise Budget 2013-14

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Budget amendments 2013 2014

  1. 1. BUDGETRY AMENDMENTS-2013-2014SALES TAX1. Introduction of CREST (Computerized Risk-Based Evaluationof 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 developedSales Tax IT system i.e. Computerized Risk-Based Evaluation of Sales Tax(Crest) will process all Sales Tax refund claims on the basis of datacaptured in sales tax returns and no separate CD would be required fromregistered person for processing of claim. The Crest has given newdimension to the whole scheme of processing of claims by checking andverification of supply chain to avert tax frauds with facilitation to thegenuine 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 wasdefined separately. New definition is as under:Provincial Sales Tax” means tax levied under provincial laws or lawsrelating to Islamabad Capital Territory, which are declared by the FederalGovernment through notification in the official Gazette, to be provincialsales 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.
  2. 2. 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 thatsupply whichever is earlier”.Time of supply now can be fulfilled in both ways i.e. either by delivery ofgoods 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 torecipient.5. Rate of Tax Increased from 16% to 17%[Section 3a]Rate of Sales Tax Increased from 16% to 17%. This is only applicablewhere the word 16% occurring.(Effective from 13, June, 2013)6. 2% Further Tax will be charged where taxable suppliesaremade 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 of2% will be charged in addition to 17%.(Effective from 13, June, 2013)7. SALES TAX ON THE BASIS OF CAPACITY OR ON A FIXEDBASIS[Section 3(1B)]A new sub section (1B) is proposed to be inserted in section 3 empoweringthe Federal Government to impose sales tax on the basis of productioncapacity of manufacturers or on a fixed basis instead of the sales taxpayable on the generalized basis i.e. ‘value of supply’ under section 3(1).(Effective from 13, June, 2013)2
  3. 3. 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 atsuch rate or amount before that it was “such extra amount of tax”(Effective from 1stJuly, 2013)9. Registered Person shall not be allowed or reclaim or deductinput 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 orreclaim input tax if discrepancy found by CREST Or Input Tax which isnot 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 theregistered buyer has fulfilled his responsibilities under section 73” shall beomitted11. Investigation and Appropriate legal action if registered personis engaged in issuing fake or flying invoices, claimingfraudulent input tax or refunds, does not physically exist orconduct actual business, or is committing any otherfraudulent 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 boardhas reasons to believe that a registered person is engaged in issuing fakeor flying invoices, claiming fraudulent input tax or refunds, does notphysically exist or conduct actual business, or is committing any otherfraudulent activity the Board, Commissioner or such officer may afterrecording reasons in writing, block the refunds or input tax adjustments ofsuch person and direct the concerned Commissioner having jurisdictionfor further investigation and appropriate legal action.”3
  4. 4. 12. Omission of word “and”[Section 22 (1e)]In Section 22, subsection (1), after clause (e) the word “and shall beomitted13. Responsibility of Registered Person to keep a record relatingto gate passes, inward or outward and transport receipts[Section 22 (1ea)]In Section 22, subsection (1), after clause (e) new clause (ea) added whichstates that it is the responsibility of registered person to keep a record ofgate passes, inward or outward and transport receipts.14. Addition of Explanation for removal of doubts in terms ofPower of Board, commissioner or officer of inland revenue ascompared with Section 72B[Section 25 Subsection 5]In Section 25, subsection (5), explanation is added which clarifies thedoubt in terms of Power of board, commissioner or officer of inlandrevenue in comparison with section 72B i.e. nothing contained in section72B restricts the power of board, commissioner or officer of inlandrevenue to have access to premises, stocks, accounts, records, etc. underthese sections or to conduct audit under these sections.15. Now Board & Chief Commissioner can post Officer InlandRevenue to the premises of registered person or class of suchpersons to monitor production, sale of taxable goods and stockpositions before that only board can appoint Officer InlandRevenue[Section 40B]In Section 40B, along with the word “Board” a new word shall be added“or Chief Commissioner”. Now both Board & Chief Commissioner canpost Officer in land revenue to the premises of registered person or classof such persons to monitor production, sale of taxable goods and stockpositions16. Monitoring or Tracking by electronic or other means[Section 40C]4
  5. 5. After Section 40B, new Section 40C shall be inserted which states that1. As the Board specify by notification in official gazette specify anyregistered persons any class of person or any good or class of goods inrespect of which monitoring or tracking of production, sales,clearances, stocks or any other related activity may be implementedthrough electronic or other means as may be prescribed.2. From the date as prescribed by board the said manufacturer or anyother person cannot sold or remove taxable goods without affixing taxstamp, banderole, stickers, labels, etc. in any such form, style andmanner as may be prescribed by the Board in this behalf17. if undue hardship faced by the tax payer a Stay for a periodnot exceeding 30 days may be granted on recovery of tax byCommissioner(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 aregistered tax payer is facing undue hardship after being heard toCommissioner or Officer inland revenue may grant stay of 30 days forrecovery of that tax.18. Rectification of mistake[Section 57 subsection 1]For Section 57B, following shall be substituted:1. If there is a mistake specified by tax payer or on his own motion theOrder passed by Commissioner, the Commissioner (Appeals) or theAppellate Tribunal may rectify any mistake apparently by passinganother Order.2. The Order passed under Subsection 1 has no effect in increasing anassessment or reducing a refund or otherwise applying adversely tothe tax payer shall be made unless the taxpayer has been given areasonable opportunity of being heard.3. Where there is clear indication of a mistake and same is notified to theCommissioner or Commissioner (Appeals), as the case may be, and noorder has been made under sub-section (1), before the expiration of the5
  6. 6. financial year next following the date on which the mistake wasbrought to their notice, the mistake shall be treated as rectified and allthe provisions of this Act shall have effect accordingly.4. No order under sub-section (1) shall be made after five years from thedate 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 ofInland Revenue in the cases involving concealment or evasion ofsales tax and other taxes.2. Board by notice specify the apportionment of reward sanctionedunder this section for individual performance or to collectivewelfare 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 inregistration database” shall be inserted:A registered person now updates his bank account through STR-1 Formor change of particulars in registration.21. Following new Serials Numbers and entries relating theretoshall be added 3rdSchedule:[Effective June 13, 2013]With regard to goods specified in the Third Schedule, sales tax at retailprice is collected from the manufacturer. The scope of Third Schedule isextended to following goods:Sr. No DescriptionHeading Nos of the FirstSchedule to the CustomsAct 1969(IV of 1969)22Finished or made-up articles of textile andleather, including garments, footwear, and bedware, sold in retail packingRespective headings.23 Household electrical goods, including air Respective headings.6
  7. 7. conditioners, refrigerators, deep freezerstelevisions, recorders and players, electricbulbs, tube-lights, fans, electric irons, washingmachines and telephone sets24Household gas appliances, including cookingrange, ovens, geysers and gas heatersRespective headings.Respective headings.25Foam or spring mattresses, and other foamproducts for household useRespective headings.26Auto parts and accessories sold in retailpackingRespective headings.27Lubricating oils, brake fluid, transmission fluid,and other vehicular fluids and maintenanceproducts in retail packingRespective headings.28 Tyres and tubes Respective headings.29 Storage batteries Respective headings.30 Arms and ammunition Respective headings.31Paints, distempers, enamels, pigments, colors,varnishes, gums, resins, dyes, glazes, thinners,blacks, cellulose lacquers and polishes sold inretail packingRespective headings.32 Fertilizers Respective headings.33 Cement sold in retail packing Respective headings.34 Tiles sold in retail packing Respective headings.35Biscuits, confectionary, chocolates, toffees andcandiesRespective 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 ofmilk by another substance, whether or not packed for retail sale. PCTheading 1901.1000, 1901.9020 and 1901.9090– omitted from 6thSchedule- Supplies against International Tender- omitted from 6thSchedule.23. Withdrawal of Zero rating Facility;7
  8. 8. [Effective June 13, 2013]i) Withdrawal of Zero rating facility by Rescinding various sales taxand federal excise notificationsS.No. Withdrawal SRO No. After Amendments01 S.R.O. 646(I)/2005 dated 30thJune,2005Zero rating on supply of hydrogen, nitrogenandhelium falling under PCT headings2804.1000,2804.3000 and 2804.2990 by M/s BOCPakistanLimited to M/s Pakistan PTA Limited.02 S.R.O. 172(I)/2006 dated 24thFebruary,2006Exemption from sales tax available tomembers ofPakistan Film Producers Association (PFPA)onimport of specified goods used in productionof film making.03 S.R.O. 863(I)/2007 dated 24thAugust,2007Consequent to exemption allowed andwithdrawal of zero rating earlier availableunder SRO 549(I)/2008, the facility availableunder thisnotification for sales-tax free procurement ofrawmaterials, sub-components, components,subassemblies and assemblies (imported orlocal) by manufacturers of following goodshas also been taken awayS.No. Description ofgoodsPCTHeadings01 Colors in sets 3213.100002 Writing, drawingand3215.9010 and3215.90908
  9. 9. marking inks03 Erasers 4016.9210 and4016.929004 Exercise books 4820.200005 Pencils sharpener 8214.100006 Geometry box 9017.200007 Pens, ball pens,markers andporoustipped pens96.088. Pencils includingcolor pencils96.099. Milk includingflavoured milk04.01 and0402.990010. Yogurt 0403.100011 Cheese 0406.101012 Butter 0405.100013 Cream 04.01 and04.0214 Desi Ghee 0405.900015 Whey 04.0416 Milk and cream,concentrated andadded sugar orothersweetening matter0402.100017 Preparations forinfant use put upforretail sale1901.100018 Fat filled milk 1901.909004 S.R.O. 160(I)/2010 dated 10thMarch,2010Amnesty from payment of default surchargeandpenalties 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, DeraIsmael9
  10. 10. Khan, Batagram, Lakki Marwat, Sawabi andMardan. No concession is currently availableunder this notification, being time specific.05 S.R.O. 161(I)/2010 dated 10thMarch,2010Withdrawal of exemption on whole of theamount of additional duties and penaltiespayable by a registered person located inAgencies of Bajaur, Mohmand, Khyber,Orakzai, Kurrum, North Waziristan andSouth Waziristan06 S.R.O. 162(I)/2010 dated 10thMarch,2010Withdrawl of exemption of central exciseduty in areas Bajaur Agency, MohmandAgency, KhyberAgency, Orakzai Agency, Kurrum Agency,NorthWaziristan Agency and South WaziristanAgency07 S.R.O. 163(I)/2010 dated 10thMarch,2010Withdrawal of exemption of federal exciseduty leviable on goods produced or servicesrendered in the areas Districts of Hangu,Bannu, Tank, Kohat and Chitral, Districts ofCharsadda, Peshawar, Dera Ismael Khan,Batagram, Lakki Marwat, Sawabi andMardan.08 S.R.O. 164(I)/2010 dated 10thMarch,2010Withdrawal of exemption of sales taxleviable on supply of electricity by PeshawarElectric Supply Company or any other dulyregistered Electric Supply Company tomanufacturing units (having industrialconnections) whether registered or not,located in districts of Hangu, Bannu, Tank,Kohat, Chitral, Charsadda, Peshawar, DeraIsmael Khan, Batagram, Lakki Marwat,Sawabi and Mardan.10
  11. 11. 09 S.R.O. 117(I)/2011 dated 10thFebruary,2011Withdrawal of fifty per cent of the rateleviable under sub-section (1) of section 3 ofthe Sales Tax Act, 1990 under PrimeMinister’s Fiscal Relief to Rehabilitate theEconomic Life in Khyber Pakhtunkhwa,FATA and PATA, namely, Bajaur Agency,Mohamand Agency, Khyber Agency, OrakzaiAgency, Kurram Agency, North WaziristanAgency, South Waziristan Agency, MalakandAgency, District Swat, District Buner, DistrictShangla, District Upper Dir and DistrictLower Dir10 S.R.O. 180(I)/2011 dated 05thMarch,2011Withdrawl of 50% reduction in sales tax wasavailable on supply of goods by theregistered persons (other than cement, sugar,beverages andcigarette sectors) located indistricts of Hangu, Bannu, Tank, Kohat,Chitral, Charsadda, Peshawar, Dera IsmaelKhan, Batagram, Lakki Marwat, Sawabi,Nowshera and Mardan.11 S.R.O. 200(I)/2010 dated 14thMarch,2011Withdrawal of fifty percent of the rateleviable under sub-section (1) of section 3 ofthe Sales Tax Act, 1990 districts of KPK12 S.R.O. 201(I)/2010 dated 14thMarch,2011Withdrawal of fifty percent of the rateleviable under sub-section (1) of section 3 ofthe Sales Tax Act, 1990 districts of KPKS.R.O. 500(I)/2013, dated the 12thJune, 2013ii) Withdrawl of Zero Percent Rate of Sales Tax And SubstitutedWith Exemption on following Goods.[Effective June 13, 2013]11
  12. 12. ‘Zero rating’ [available under SRO 549(I)/2008 dated June 11, 2008] has beenwithdrawn and ‘exemption’ from whole of sales tax has been extended with theexception of Cotton Seed Oil. This effectively means that input tax, if any, forsuch products will not be available. Earlier, input tax borne by the manufacturerwas refundable.Zero rating on ‘Cotton Seed Oil’, supplied to registered manufacturer ofvegetable ghee and cooking oil, has been withdrawn. However, it has not beengranted exemption from sales tax. Therefore, it is now chargeable to sales tax atthe rate of 17 per cent. List of exempted goods (previously zero rated):S.No.Description of Goods Amendments01 Cotton Seeds (PCT Heading 107.2000) Omitted02 Oil Cake and other Solid Residues, Whether or not ground orin the form of pellets (PCT Heading 2306.1000)Omitted03 (i). Uncooked poultry meat (PCTHeading 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 sugaror other sweetening matter (PCT Headings0402.1000, 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);Omitted12
  13. 13. (ix). Desi ghee (PCT Heading 0405.9000);(x). Cheese (PCT Heading 0406.1010);(xi). Processed cheese not grated or powdered (PCT Heading0406.3000)(xii). Frozen, prepared or preserved sausages and similarproducts of poultry meat or meat offal (PCT Heading1601.0000);(xiii). Meat and similar products of prepared frozen orpreserved meat or meat offal of all types includingpoultry 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 Heading3213.1000)(xix). Writing, drawing and marking inks (PCT Headings3215.9010 and 3215.9090);(xx). Erasers (PCT Headings 4016.9210 and 4016.9290)13
  14. 14. (xxi). Exercise books (PCT Heading 4820.2000);(xxii). Remeltable scrap (PCT Heading 72.04);(xxiii). Pencil sharpeners (PCT Heading 8214.1000)(xxiv). Sewing machines of the household type (PCT Headings8452.1010 and 8452.1090);(xxv). Dedicated CNG buses and all other buses meant fortransportation of forty or more passengers whether in CBU orCKD 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 goodshaving specifications duly approved by the EngineeringDevelopment Board (PCT Heading 87.16);(xxix). Road tractors for semi-trailers, prime movers and roadtractors 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 ongirder chassis and having following features, namely:-(xxxi). Attack resistance central division along with payment14
  15. 15. tray;(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 mathematicalcalculating instruments (geometry box) (PCT Heading9017.2000)(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’sinvestors and to Export Processing Zone Gawadar for developmentof Zone’s infrastructureOmitted07 Wheelchair PCT 8713.1000, 8713.9000 Omitted08 Cotton Seed Oil OmittedS.R.O. 501(I)/2013, dated the 12thJune, 2013S.R.O. 502(I)/2013, dated the 12thJune, 201324. 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 goodsother than ‘finished’ articles. Consequently, the local sale of these ‘finishedarticles’ such as ‘garments’ now attracts sales tax at the rate of 17 per cent.- Against Serial number 56, in column (2), after the word “preparations” theword “excluding master batches shall be added;15
  16. 16. - “Shoe Adhesive” PCT 3506.9110 now omitted from SRO.S.R.O. 504(I)/2013, dated the 12thJune, 201325. Amendments in the Sales Tax Special Procedure(Withholding Rules 2007WITHHOLDING ON SUPPLIES FROM UNREGISTEREDPERSON - EXTENDED[Rule 2(3)][Effective June 12, 2013]At present, only following persons are required to withhold sales tax onpurchase of taxable goods from unregistered persons:- Federal and provincial governments- Autonomous bodies- Public sector organizationsNow all companies who are withholding agents under these Rules andpersons registered as exporters are also required to withhold sales tax onpurchase of taxable goods from unregistered personsS.R.O. 505(I)/2013, dated the 12thJune, 201326. 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 theRegional Tax Office (RTO) or Large Taxpayers Unit (LTU), in whosejurisdiction the registered office is located whereas in the case of a non-corporate person, it is determined with reference to the place where thebusiness is actually carried on and in case of both business premises andmanufacturing unit in different areas, the jurisdiction is determined withreference to the place of manufacturing unit.16
  17. 17. The amendment sets out a revised and uniform basis for determination ofplace of jurisdiction as follows:- Following change in clauses (a), (b), (c) in rule 5 i.e (Application forregistration), in sub rule (1):Determination of Jurisdiction having a single manufacturing unitor businessa) Jurisdiction is determined where the manufacturing unit orbusiness premises is actually located in both corporate & non-corporate person.Determination of Jurisdiction having a multiple manufacturingunit or businessb) Board may decide the place of registration of such person- Chapter VIIA (ZERO-RATING OF SUPPLIES AGAINSTINTERNATIONAL TENDER FOR AFGHAN REFUGEES) and the rulesthereunder shall be omitted.(W.e.f 1stday of July, 2013)S.R.O. 506(I)/2013, dated the 12thJune, 201327. Levy of Extra 5% on supplies of electric power andnatural Gas having Industrial or Commercial Connectionswho are unregistered or are not on Active Tax Payer List.Industrial or Commercial connections who are unregistered or not onactive taxpayer list maintained by Federal Board of Revenue will be extra5% of total bill excluding the amount of federal taxes if there bill exceedsrupees fifteen thousand in any month.S.R.O. 509(I)/2013, dated the 12thJune, 201328. Amendments in the Sales Tax Special Procedure Rules2007[Effective from June 13, 2013]After Chapter IV, new Chapter VIA shall be inserted:“Special Procedure for collection and payment of extra tax onsupplies of electric power and natural gas consumes byunregistered and inactive persons”18B. Mode & Manner of Collection17
  18. 18. 1) Industrial or Commercial connections who are unregistered or noton active taxpayer list maintained by Federal Board of Revenuewill be extra 5% of total bill excluding the amount of federal taxes ifthere bill exceeds rupees fifteen thousand in any month.2) The amount of extra tax will be shown separately in the bill orinvoice.18C. Conditions & Limitations1) Extra Tax shall not be adjustable by the supplier or consumer intheir returns and shall be paid in full by the supplier in to thetreasury.2) The Supplier of Electric or Natural Gas verify the name addressand other particulars appearing on the registration certificate andalso verify same from Active Tax Payer List if a person claims thathe has a sales tax registration number.3) Multiple places of business shall ensure that all such places ofbusiness are properly declared and entered on his registrationcertificate and Taxpayer List.4) The Supplier of Electric or Natural Gas after above said verificationshall incorporate the Sales Tax registration number in billingsystem so that it is printed in future bills. Thereafter, the suppliershall stop charging and collecting the extra tax from such person.5) If registered person is deregistered or inactive from ATL Listsupplier shall again start charging and collecting extra tax.S.R.O. 510(I)/2013, dated the 12thJune, 2013FEDERAL EXCISE1. FURTHER DUTY[Section 3]The Bill proposes to levy a ‘Further Duty’ at the rate of two per cent of thevalue in addition to the normal rate, when excisable goods and servicesare supplied to a person who has not obtained a registration number.Federal Government will be empowered to issue a notification in theofficial gazette to specify the excisable goods and services where uponsuch further duty will be charged, levied and collected.18
  19. 19. 2. RECORDS[Section 17]Every person registered for FED Act is required to maintain and retainrecords of excisable goods purchased, manufactured and cleared by himor 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) tostay 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 taxlevied 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 withthe deposit of duty demanded or penalty imposed, subject to suchconditions as he may deem fit to impose so as to safeguard the interest ofrevenue. The order for such dispensation, however, ceases to have effecton the expiration of a period of 6 months from the date of the dispensationorder or decision of appeal, whichever is earlier4. POWERS OF FBR OR COMMISSIONER TO PASS CERTAINORDERS[Section 35]An Explanation has been inserted to clarify that the powers of FBR,Commissioner or Officer of Inland Revenue vested under sections 35, 45and 46 are independent of the powers of the FBR under section 42B. It hasfurther being clarified that nothing contained in section 42B restricts thepowers of FBR, Commissioner or officer of Inland Revenue under theaforesaid sections or to conduct audit.5. REWARD TO INLAND REVENUE OFFICERS AND OFFICIALS[Section 42C]It is proposed to reward officers and officials of Inland Revenue for theirmeritorious conduct in cases involving concealment or evasion of exciseduty and other taxes. Moreover, the informer providing credibleinformation leading to such detection would also be rewarded afterrealization of part or whole of the taxes involved in such cases. It isproposed that FBR may by notification prescribe the procedure to specifythe apportionment of reward for individual performance or to collectivewelfare of the officers and officials of Inland Revenue.19
  20. 20. 6. MONITORING OR TRACKING BY ELECTRONIC OR OTHERMEANS[Section 45A]It is proposed that FBR may by notification prescribe the procedure tospecify any registered person or class of registered persons or any goodsor class of goods in respect of which monitoring or tracking of production,sales, clearances, stocks or any other related activity may be implementedthrough electronic or other means, as may be prescribed. Moreover,excisable goods shall not be removed or sold by the manufacturer or anyother person without affixing tax stamp, banderole, stickers, labels, etc. inany 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 pricefor following goods with effect from July 1, 2013:S.No.Description of Goods Heading Number4. Aerated waters 2201.10205.Aerated waters, containing addedsugar or othersweetening matter of flavoured2202.10106.Aerated waters if manufacturedwholly from juicesor pulp of vegetables, food grains orfruits andwhich do not contain any otheringredient,indigenous or imported, other thansugar, colouringmaterials, preservatives or additivesin quantitiesprescribed under the West PakistanPure FoodRules, 1965RespectiveHeadingsLOCALLY PRODUCED CIGARETTESDescription and duty on the locally produced cigarettes (PCT heading24.02) has been revised as under, with effect from June 13, 201320
  21. 21. S.No.Description of Goods Revised Rate ofDuty9.Locally produced cigarettes if their on-packprinted retail price exceeds rupees twothousand two hundred and eighty six perthousand cigarettesRupees two thousandthree hundred andtwenty five per thousandcigarettes10.Locally produced cigarettes if their on-packprinted retail price does not exceed rupeestwo thousand two hundred and eighty sixper thousand cigarettesRupees eight hundredand eighty perthousand cigarettes8. Repayment-Cum-Drawback of Sales Tax and Federal Excise Dutyto the Registered Person on the export of vegetable Ghee, CookingOil & MargarineThe 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 theNotification No. S.R.O.24(I)/2006, dated the 7thJanuary, 2006, paid atimport stage on the same quantity of edible oil as exported toAfghanistan, by the units located in the violence affected areas specified inSales Tax General Order 01/2010, dated the 20thJanuary, 2010:S.R.O. 503(I)/2013, dated the 12thJune, 20139. Levy Fixed Amount of Federal Excise Duty one ruppee onLocally produced oil purchased by manufacturer ofvegetable ghee and cooking oilLevy of fixed amount of federal excise duty at the rate of one rupee perkilogram of locally produced oil purchased by a manufacturer ofvegetable ghee and cooking oil, instead of the federal excise duty payable@16%. Which shall be paid by the producer or manufacturer of vegetableghee and cooking oil along with his monthly return for the tax period inwhich locally produced oil is purchasedIf the Stocks of locally produced oil purchased before 12thJune, 2013 andlying in the premises of vegetable ghee and cooking oil producer ormanufacturer on the said date shall be paid along with return filed forJune, 2013 in accordance with the above specified rateS.R.O. 508(I)/2013, dated the 12thJune, 201321
  22. 22. 10. Levy Fixed Amount of Federal Excise Duty Forty PaisaPer Kilogram on Oilseeds, at the import stageLevy fixed amount of federal excise duty of forty paisa per kilogram onoilseeds, at the import stage instead of federal excise duty payable atproduction or manufacturing stage of vegetable ghee or cooking oil.11. MOTOR VEHICLESIt is proposed to charge duty on motor vehicles as under, witheffect from June 13, 2013:S.No. Description of Goods PCT Heading Rate of Duty55Motor cars, SUVs and othermotor vehicles of cylindercapacity of 1800 cc orabove, principally designedfor the transport of persons(other than those ofheadings 87.02), includingstation wagons and racingcars of cylinder capacity of1800 cc or above87.03Ten per centad.val12. THIRD SCHEDULETABLE I – GOODSThe duty in respect of the following goods is proposed to bewithdrawn, effective June 13, 2013:22
  23. 23. Note: If you have any query please don’t hesitate to contact us at thefollowing Nos. or e-mail at this address.Ph. # 021-32722828-9, Fax # 021-32726449E-mail: stspakistan@gmail.comYours truly,The Sales Tax ServicesS.No. Description of Goods PCT Heading5Hydraulic cement imported or purchasedlocally by petroleum or energy sectorcompanies or projects subject to the sameconditions and procedures as are applicablefor the purposes of exemption ofcustom duty,2523.90007Lubricating oil if supplied to Pakistan Navy forconsumption in itsvesselsRespectiveheading8Transformer oil if used in the manufacture oftransformers suppliedagainst international tenders to a projectfinanced out of fundsprovided by the international loan or aid givingagenciesRespectiveheading23