Latest news with #SalesTaxAct
Business Recorder
2 days ago
- Business
- Business Recorder
Unregistered taxpayers: 4pc ‘further sales tax' to be abolished
ISLAMABAD: The government is all set to take a bold documentation measure to abolish four percent 'further sales tax' on un-registered sales taxpayers and sustain huge revenue loss by registering the entire supply chain of businesses in budget (2025-26). Sources told Business Recorder here on Tuesday that the abolition of the four percent 'further sales tax' will result in revenue loss to the Federal Board of Revenue (FBR), but it will be instrumental in registration of the entire supply chain covering dealers, wholesalers and retailers. From manufacturing stage till retail outlets, the entire supply chain would come under the documented regime. The same is the situation with the importers where subsequent supply chain of imported goods are not registered with the sales tax department. Budget 2025-26: KCCI urges govt to expand tax net, targets 4.6mn unregistered entities The un-registered sales tax persons are enjoying the same status of 'non-filers of income tax returns' and carrying out all business transactions by paying higher rates of withholding taxes or further tax on sales tax side. The revenue loss after abolition of the 'further sales tax' would be temporary and revenue gains are much higher in long term period. Through Finance Bill (2025-26), the FBR has proposed amendments in the Sales Tax Act for the documentation of the entire supply chain with the sales tax department. In 2023, the FBR had increased the rate of 'further sales tax' from three to four percent in the amended Finance Bill 2023. Presently, the rate of further tax is four percent on the supplies made to the un-registered persons. The rate of 'further sales tax' was increased by one percent to discourage supplies made to the unregistered persons. If a person intended to remain out of the sales tax net, he is required to pay higher rate of further tax at the rate of four percent. Under the law, the 'further tax' is charged on supplies of taxable goods made by a registered person to a person who has not obtained a sales tax registration number or has obtained a registration number but is not an active taxpayer. The said rate of sales tax under sub-section (1A) of Section 3 of the Sales Tax Act was enhanced to four percent through the Finance Act, 2023. Officials added that the sales tax base totalled between 40,000 to 60,000 who are paying sales tax including those depositing very low amount of sales tax. Copyright Business Recorder, 2025
Business Recorder
2 days ago
- Business
- Business Recorder
Sec 179(4) Customs Act: Power of FBR to grant extension ‘narrower': SC
ISLAMABAD: The Supreme Court noted that the power of Federal Board of Revenue (FBR) under Section 179(4) of the Customs Act, 1969 to grant extension of time is much narrower and circumscribed. A three-judge bench, headed by Justice Munib Akhtar, ruled that while hearing an appeal of Director, Directorate General, Intelligence and Investigation (Customs) against the decision of the Sindh High Court (SHC), and dismissed it. Dr Farhat Zafar, representing the petitioner (DG Intelligence and Investigation (Customs) submitted that in this case an extension of time was granted by the FBR and therefore, the impugned decision of the SHC is not sustainable. She relied on paragraphs 11 and 12 of the judgment of larger bench of the Supreme Court, which upheld the principles laid down in the case of Collector of Sales Tax, Gujranwala and others v Messrs Super Asia Mohammad Din and Sons and others 2017 SCMR 1427 (Super Asia). SHC judgment: SC reserves verdict on DG Customs Valuation's pleas The court noted that these paras dealt with Section 74 of the Sales Tax Act, 1990, and considered the possibility of the grant of an extension of time in terms thereof. Section 74 was held to apply in terms as stated in para 12 of the judgment in Super Asia. The judgment said this matter (extension of time) has arisen under the Customs Act, 1969, which Section 179 (4) says; 'The Board shall have the powers to regulate the system of adjudication including transfer of cases and extension of time-limit in exceptional circumstances.' The court noted that the power to grant an extension by the Board under Section 179(4) of the Customs Act, 1969, is circumscribed, and is to be exercised only in 'exceptional circumstances'. On the other hand, Section 74 of the 1990 Act provides that the Board is empowered to grant an extension to the extent found 'appropriate'. The court said that there is an obvious and clear difference between the two provisions; the power under Section 179(4) is much narrower and circumscribed. Therefore, the paragraphs of Super Asia sought to be relied upon by counsel for the petitioner have no relevance. It stated that the Larger Bench has also made some observations with regard to Section 74 of the Sales Tax Act, 1990. The judgment also said that, on a query from the Court, the counsel for the petitioner has candidly stated that the permission/ letter of extension that was granted by the Board was not placed on the record before the Appellate Tribunal. The judgment said that indeed, this was specifically noted by the Tribunal in its order; i.e., 'However, the plea taken by the respondents is that they have taken approval from FBR as mentioned in Section 179(4) but no such approval was placed before the Tribunal'. The court noted that the matter came before it from a tax reference and it is well established that beyond the stage of the Appellate Tribunal, it is only questions of law that can be taken to the High Court. It is also well settled that the record on the basis of which the questions of law can be decided is in terms of the record as it stood before the Appellate Tribunal. The judgment said that record cannot be added to and certainly not on a point that requires factual determination. Since the position is that the FBR letter by which it is claimed extension of time was granted by the Board was never placed on the record before the Appellate Tribunal, it is impermissible for any reliance to be placed on the same in this Court. The Court; therefore, declined to entertain this point, saying; 'Any departure from the well settled position would allow a party to a tax reference to alter the record either before the High Court or this Court which is not permissible.' Copyright Business Recorder, 2025
Business Recorder
3 days ago
- Business
- Business Recorder
Sindh farmers ask FBR to reduce duty on tractors
ISLAMABAD: Small farmers from Sindh have approached Federal Board of Revenue (FBR) to reduce custom duty on imported tractors from 15 percent to 5 percent under massive tariff rationalisation plan to be implemented in budget (2025-26) to support agriculture sector. Farmers have also proposed FBR Chairman Rashid Mahmood to reduce the existing sales tax rate on locally manufactured and imported tractors from 14 percent to 5 percent, enabling the farmers to purchase tractors. This is not an exemption, but only a reduced rate already applicable of many items including vehicles under Sales Tax Act. The budget proposals of the Sindh Chamber of Agriculture (SCA) Hyderabad to FBR Chairman included rationalisation of tax structure and abolishment of levy of sales tax on tractors to support agriculture sector. Sales tax on tractors, pesticides likely When contacted, sources in the FBR revealed that the proposals are under consideration of the FBR during ongoing budget preparation exercise to facilitate poor farmers of the country. The chamber stated that the approved tariff plan to be implemented in budget (2025-26) covers elimination of Additional Customs Duty (ACD); phasing out of Regulatory Duty (RD); gradual elimination of the Fifth Schedule of the Customs Act and restructuring of the customs tariff. This must cover most essential item i.e. tractor which is not a luxury item like vehicle. Nabi Bux Sathio, Senior Vice President, Sindh Chamber of Agriculture Hyderabad stated: 'We, as representatives of the farming and agricultural community in Sindh, feel compelled to shed light on the significant challenges and hardships faced by our fellow farmers and agriculturists in recent times'. The chamber stated that the agricultural sector plays a pivotal role in Pakistan's economy, contributing 24% to the GDP and employing 37.4% of the workforce. However, the sector is currently grappling with a myriad of complex issues. These include the lack of investment and support, the adverse effects of climate change, and the dwindling availability of water, exacerbating the challenges faced by farmers and agriculturists. Moreover, farmers have been severely impacted by the inability to secure fair prices for their produce. The government's announcement of support prices for wheat and cotton has not translated into actual purchases at the stipulated rates, leaving farmers with no choice but to sell their crops at significantly lower prices. The situation is further compounded by the low prices offered for rice and the potential delay in the sugar cane crushing season, which has added to the woes of the farming community. He urged the FBR to reduce the existing sales tax rate on locally manufactured and imported tractors from 14% to 5% enabling the farmers to purchase tractors, and also reduce the custom duty on imported tractors from 15% to 5% and also for re-conditional tractors. Copyright Business Recorder, 2025
Business Recorder
5 days ago
- Business
- Business Recorder
ST, Federal Excise Return: FBR extends date of submission upto June 5
ISLAMABAD: The Federal Board of Revenue (FBR) has extended date of submission of Sales Tax and Federal Excise Return for the tax period of April, 2025 upto June 5, 2025. This is subject to the condition that due sales tax liability has been deposited within due date. FBR to levy 18% sales tax in erstwhile tribal areas In this regard, the FBR has issued instructions to all Chief Commissioners Inland Revenue of Large Taxpayers Offices (LTOs), Medium Taxpayers Office (MTO), Corporate Tax Offices (CTOs) and Regional Tax Offices (RTOs) on extension in date of Submission of Sales Tax & Federal Excise Return for the Tax Period of April, 2025. In exercise of the powers conferred under section 74 of the Sales Tax Act, 1990 and section 43 of the Federal Excise Act, 2005, the FBR has directed that the date of submission of Sales Tax and Federal Excise Return for the tax period of April, 2025 which was due on May 18, 2025 is extended till June 5, 2025 subject to the condition that due sales tax liability has been deposited within due date, FBR added. Copyright Business Recorder, 2025
Business Recorder
24-05-2025
- Business
- Business Recorder
Collection at manufacturing stage likely: Govt may scrap sugar FED in FY26 budget
ISLAMABAD: The government is likely to withdraw Rs 15 per kg Federal Excise Duty (FED) on sugar and replace it with the FED collection at the manufacturing stage of around 50 industries/sectors on retail price basis. Presently, FED of Rs 15 per kg is applicable on sugar supplied by any person to a manufacturing, processing This levy is to the extent of supply of sugar for further use as a raw material and not for supply directly to ultimate consumers. According to sources, the proposal is to end the Rs 15 per kg FED on sugar. Alternatively, it may be separately charged on the basis of printed retail price under Third Schedule of the Sales Tax Act to generate additional revenue. The manufacturer would be required to pay the due amount of FED on sugar after change in the FED regime on sugar. Pakistan govt working on options to increase FED Recently, the FBR has fixed the minimum ex-mill value of white crystalline sugar from April 1 for assessment of sales tax. The SRO 577(I)/2025 has fixed minimum value inclusive of Sales Tax of domestically produced white crystalline sugar. The minimum value inclusive of sales tax would be average national retail price of refined sugar last published at Pakistan Bureau of Statistics (PBS) website (weekly sensitive price indicator - SPI) before 1st and 16th of every month minus sixteen rupees for respective fortnight starting on first and 16th of every month, the notification added. Copyright Business Recorder, 2025
