For the purpose of ensuring the availability of the commodity, the Federal Board of Revenue Pakistan (FBR) will be exempting the withholding tax on the import of wheat soon.

This was said by Omar Hamid, Secretary Ministry of National Food Security and Research (NFS&R), while chairing a meeting on wheat import on Monday.

As per His sayings, the federal government has already abolished the taxes and duties including regulatory duty 60 percent, custom duty 11 percent, sales tax 17 percent, and withholding tax 06 percent.

Waiving of the withholding tax shall be notified in a couple of days, said Omar Hamid. He further added that the private wheat importers would be on priority and the concerns of the importers would be getting solved at the earliest.

He mentioned that NFS&R is working in PM Imran Khan's direction of to ensure an uninterrupted supply countrywide. NFS&R will help wheat importers at all levels.

This is being done to make the supply of wheat to the general public at an affordable price and the NFS&R is facilitating wheat importers by helping them in priority berthing, storage, multiple ports, and clearances on the landing of shipment.

Imported wheat has also been exempted from the Anti- Hoarding Act imposed by the provincial governments on producing verified import records by the importers.

The meeting was attended by wheat importers, representatives from NFS&R, Ministry of Maritime Affairs, FBR and Finance Division.

28 July 2020

It has been made mandatory for the registered persons to provide details of all unregistered persons who made purchases of above Rs.100000. The information of CNIC of unregistered persons should be provided through sales tax return for the month of July 2020 in August 2020.

The government has made it mandatory for sales tax registered persons to provide information of unregistered persons including their CNICs, names, and addresses on making supplies above Rs.50000 through finance act 2020.

There were difficulties in the implementation of this condition due to disputes between FBR and the retailers.

 Finance Act, 2020 has enhanced the limit of purchases by unregistered persons to Rs.100000 with and effect from July 01, 2020.

Section 23 of the Sales Tax Act, 1990 requires the registered persons to provide the details of unregistered persons while issuing a tax invoice.

Section 23 (Tax Invoices):

 A registered person making a taxable supply shall issue a serially numbered tax invoice at the time of supply of goods containing the following particulars, in Urdu or English language, namely:-

• name, address and registration number of the supplier;
• name, address and registration, number of the recipient and NIC or NTN of the unregistered person, as the case may be, excluding supplies made by a retailer where the transaction value inclusive of sales tax amount does not exceed rupees fifty thousand if the sale is being made to an ordinary consumer.

Explanation:

Ordinary customer means any person buying the goods for his own consumption and not for the purpose of resale or processing.

 Condition of NIC or NTN shall be effective from 1st August 2019:

• date of issue of invoice;
• description including count, denier, and construction in case of textile yarn and fabric, and quantity of goods;
• value exclusive of tax;
• amount of sales tax;
• value inclusive of tax:

The Board may, by notification in the Official Gazette, specify such modified invoices for different persons or classes of persons.

 if it is subsequently proved that CNIC provided by the purchaser was not correct, the liability of tax or penalty shall not arise against the seller, in case of a sale made in good faith.

• No person other than a registered person or a person paying retail tax shall issue an invoice under this section.
• A registered person making a taxable supply may, subject to such conditions, restrictions, and limitations as the Board may, by notification in the Official Gazette, specify, issue invoices to another registered person electronically and to the Board as well as to the Commissioner, as may be specified.
• The Board may, by notification in the Official Gazette, prescribe the manner and procedure for regulating the issuance and authentication of tax invoices.”

27 July 2020

Finance Bill 2020 has made an amendment according to which Pakistan Stock Exchange (PSX) is required to deduct/collect a reduced rate of three percent on payment to non-residents.

As per the Federal Board of Revenue Pakistan, after Finance Act, 2020, various service providers are required to collect three percent income tax on payment to non-residents.

These services include:

• Inspection, certification, testing and training services,
• Building maintenance services,
• Share registrar services,
• Tracking services,
• Software development services,
• Hotel services,
• Courier services,
• Freight forwarding services,
• Transport services,
• Air cargo services,
• Manpower outsourcing services,
• Security guard services,
• IT services and IT-enabled services as defined in clause (133) of Part I of Second Schedule,
• Advertising services (other than by print or electronic media),
• Car rental services,
• Services rendered by Pakistan Stock Exchange Limited and Pakistan Mercantile Exchange Limited.

25 July 2020

As per the Finance Act 2020, for the persons appearing in an Active Taxpayers List (ATL), condition for the advance tax on educational fee under Section 236I of Income Tax Ordinance, 2001 has been abolished.

However, the condition for paying advance tax on educational fee is still valid for those not appearing in ATL.

Also, it has been made the requirement for educational institutes to provide details of those Non-ATL persons making a fee of more than Rs.200000 per annum.

The tax shall be collected under section 236I at a rate of 5 percent of the amount of fee for persons not appearing on ATL.

The collection of advance income tax on payment of the educational fees was introduced through Finance Act, 2013. The purpose of introducing the advance tax on such transaction was to bring those people into tax net who have taxable income but not paying their tax liability.

However, advance tax payable is adjustable against income tax liability, if the persons ensure his name on ATL and also files the income tax return.

23 July 2020