Budget 2014-2015: Finance Act, 2014

KARACHI: Following is the Finance Act, 2014 approved by the Parliament to incorporate Budget 2014/2015.
(1) Short title, extent and commencement.__ (1) This Act may be called the Finance Act, 2014.
(2) It extends to the whole of Pakistan.
(3) It shall come into force from the first day of July, 2014, except sub-section (11) and (12) of sections 2 and sub-section (2), (9), (10), (11) and (12) of section 4 which shall have effect from the next day of assent given to this Act by the President of the Islamic Republic of Pakistan.
2. Amendments of Act IV of 1969.__ In the customs Act, 1969 (IV of 1969), the following further amendments shall be made, namely: __
In section 2,__ (a) for clause (k), the following shall be substituted, namely:__ “customs-station” means any customs-station, customs airport, an inland river port, land customs-station or any place declared as such under section 9;”; and (b) clause (m) shall be omitted;
(2) In section 7, for the word “Central”, the word “Federal” shall be substituted;
(3) in section 18, after sub-section (1), the following new sub-section shall be inserted:__
“(1A) Notwithstanding anything contained in sub-section (1), customs duties shall be levied at such rates on imports of goods or class of goods as are prescribed in the Fifth Schedule, subject to such conditions, limitations and restrictions as prescribed therein,”;
(4) in section 18A, for the words, figures and brackets “Central Excises and Salt Act (1944)”, the words and figures “the Federal Excise Act, 2005” shall be substituted;
(5) in section 25,__ (a) in sub-section (5), clause (d) shall be omitted; and (b) in sub-section (6),__
(i) for the comma, occurring for eighth time, the word “and” shall be substituted; and
(ii) the word, letter and brackets “and (d)” shall be omitted;
(6) in section 32, in sub-section (2, (3) and (3A), after the word “duty”, the comma and word, “taxes” shall be inserted;
(7) in section 80. In sub-section (3), after the word “duty”, the comma and the word, “taxes and other charges levied thereon” shall be inserted;
(8) in section 81, in sub-section (1),__ (a) in the first proviso, after the word “duty”, the comma and words “taxes and other charges” shall be inserted; and (b) in the second proviso, for the word “tax”, the words “taxes and other charges” shall be substituted;
(9) in section 185B, for clause (a), the following shall be substituted, namely:__ “(a) no court other than the special judge having jurisdiction shall try an offence relating to narcotics and narcotic substances which shall be tried by the special courts established under the Control of Narcotic Substances Act, 1997 (XXV of 1997);”;
(10) in section 194, in sub-section (3),__ (a) for the words “Customs and Excise Group”, the words “Pakistan Customs Services” shall be substituted; and (b) for the word “five”, the word “three” shall be substituted;
(11) the amendments set out in the First Schedule to this Act shall be made in the First Schedule to the Customs Act, 1969 (IV of 1969); and
(12) the provision in the Second Schedule to this Act shall be added as Fifth Schedule to the Customs Act, 1969 (IV of 1969).
3. Amendment of Act XXVII of 1947.__ In the Member of Parliament (Salaries and Allowances) Act, 1947 (XXVII of 1974), in section 4, in sub-section (1), for the words “seven hundred and fifty”, for the words “two thousands” shall be substituted.
4. Amendments of the Sales Tax Act, 1990.__ In the Sales Tax Act, 1990, the following further amendments shall be made, namely:__ (1) in section 2, in clause (27), for the semicolon at the end a colon shall be substituted, and thereafter the following proviso shall be added, namely:__
“Provided that the Board may through a general order specify zones or area for the purpose of determination of highest retail price for any brand or variety of goods;”;
(2) in section 3,__ in sub-section (2),__ (a) in clause (a), in the proviso, the word “and”, at the end shall be omitted; and (b) after clause (a), amended as aforesaid, the following new clause (aa) shall be inserted, namely:__
(ii) after sub-section (3A); the following new sub-section shall be inserted namely:__
“3B Notwithstanding anything contained in sub-section (!) and (3), sales tax on the import and supply of the goods specified in the Ninth Schedule to this Act shall be charged, collected and paid at the rates, in the manner, at the time, and subject to the procedure and conditions as specified therein or as may be prescribed, and the liability to charge, collect and pay the tax shall be on the persons specified therein.”;
(iii) for sub-section (8), the following shall be substituted, namely:__ “(8) notwithstanding anything contained in any law or notification made thereunder, in case of supply of natural gas to CNG stations, the Gas Transmission and Distribution Company shall charge sales tax from the CNG stations at the rate of seventeen percent of the value of supply to the CNG consumers, as notified by the Board from time to time, but excluding the amount of tax, a s provided in clause (46) of section 2.”;
(iv) after sub-section (8), substituted as aforesaid, the following new sub-section shall be added, namely:__
“(9) notwithstanding anything contained in sub-section (1), tax shall be charged from retailers through their monthly electricity bills, at the rate of five percent where the monthly bill amount does not exceed rupees twenty thousand and at the rate of seven and half percent where the monthly bill amount exceeds the aforesaid amount, subject to the exclusions, procedures, restrictions and limitations as prescribed in Chapter II of the Sales Tax Special Procedure Rules, 2007:
Provided that the tax under this sub-section shall be in addition to the tax payable on supply of electricity under sub-section (I), (IA) and (5).”;
(3) in section 3B, for sub-section (2), the following shall be substituted and shall be deemed to have been always so substituted, namely:__
“(2) Notwithstanding anything contained in any law or judgment of a court, including the Supreme Court and a High Court, any amount payable to the Federal Government under sub-section (I) shall be deemed to be an arrear of tax or charge payable under this Act and shall be recoverable accordingly and any claim for refund in respect of such amount shall neither be admissible to the registered person nor payable to any court of law or to any person under direction of the court.”;
(4) in section 4, in clause (d), for the words “zero rated goods”, the words “goods at reduced rate of sales tax” shall be substituted;
(5) in section 7, in sub-section (1),__ (a) for the word “Section”, occurring for the first time, the words and figure “section 8 and” shall be substituted; and (b) after the words “output tax”, the commas, words, brackets and figures, “excluding the amount of further tax under sub-section (1A) of section 3.” Shall be inserted;
(6) in section 8, in sub-section (1),__ (i) in clause (d), the word “and”, at the end, shall be omitted; (ii) after clause (e), for full stop at the end a semicolon shall be substituted and thereafter the following new clauses shall be added, namely:__
“(f) goods and services not related to the taxable supplies made by the registered person;
(g) goods and services acquired for personal or non-business consumption;
(h) goods used in, or permanently attached to, immoveable property such as building and construction materials, paints, electrical and sanitary fittings, pipes, wires and cables, but excluding such goods acquired for sale or re-sale or for direct use in the production or manufacturers of taxable goods; and
(i) vehicles falling in Chapter 87 of the First Schedule to the Customs Act, 1969 (IV of 1969), parts of such vehicles, electrical and gas appliances, furniture, furnishings, office equipments (excluding electronic cash registers), but excluding such goods acquired for sale or re-sale.”;
(7) in section 40B, after the proviso, the following explanation shall be added, namely:__
“Explanation.__ for the removal of doubt, it is declared that the powers of the Board, Chief Commissioner and Commissioner under this section are independent of the provisions of section 40.”;
(8) after section 50A, the following new section shall be inserted, namely:__
“50B. Electronic security and intimation.__ (1) The Board may implement a computerized system for the purpose of automated scrutiny, analysis and cross-matching of returns and other available data relating to registered persons and to electronically send intimations to such registered persons about any issue detected by the system.
(2) the intimation sent by the computerized system under sub-section (1) shall be in nature of an advice or advance notice, aimed at allowing the registered person to clarify the issue, rectify any mistake or take other corrective action before any legal or penal action is initiated.
(3) the computerized system shall be so implemented so as to keep record of the issues detected, intimations sent, responses received and actions taken, and to present such information to the officer of Inland Revenue and to and to the Board in the prescribed manner.
(4) The Board may prescribed procedures and specifications for the smooth and efficient operation of the computerized system.”;
(9) in the Fifth Schedule, in column (I), after Serial No. 8 entries relating thereto in column (2), the following new serial numbers and entities relating thereto shall be added, namely:__
“9. Goods exempted under section 13, if exported by a manufacturer who makes local supplies of both taxable and exempt goods.
10. Petroleum Crude Oil (PCT Heading 2709.0000).
11. Raw materials, components, sub-components and parts, if imported or purchased locally for use in the manufacturing of such plant and machinery as is chargeable to sales tax at the rate of zero percent, subject to the condition that the importer or purchaser of such goods holds a valid sales tax registration showing his registration category as “manufacturer”; and in case of import, all the conditions, restrictions, limitations and procedures as are imposed by notification under section 19 of the Customs Act, 1969 (IV of 1969), shall apply.
12. The following goods and the raw materials, packaging materials, sub-components, components, sub-assemblies and assemblies imported or purchased locally for the manufacturers of the said goods, subject to the conditions, limitations and restrictions as specified in Chapter XIV of the Sales Tax Special Procedure Rules, 2007:__
(i) Colors in sets (PCT heading 3213.1000)
(ii) Writing, drawing and making inks (PCT heading 3215.9010 and 3215.9090)
(iii) Erasers (PCT heading 4016.9210 and 4016.9290)
(iv) Exercise books (PCT heading 4820.2000)
(v) Pencil sharpeners (PCT heading 8214.1000)
(vi) Geometry boxes (PCT heading 9017.2000)
(vii) Pens, ball pens, makers and porous tipped pens (PCT heading 96.08)
(viii) Pencils including color pencils (PCT heading 96.09)
(ix) Milk including flavored milk (PCT heading 04.01 and 0402.9900)
(x) Yogurt (PCT heading 0403.1000)
(xi) Cheese (PCT heading 0406.1010)
(xii) Butter (PCT heading 0404.1000)
(xiii) Cream (PCT heading 04.01 and 04.02)
(xiv) Desi ghee (PCT heading 0405.9000)
(xv) Whey (PCT heading 04.04)
(xvi) Milk and cream, concentrated and added sugar or other sweetening matter (PCT heading 0402.1000)
(xviii) Preparations for infant use put up for retail sale (PCT heading 1901.1000)
(xviii) fat filled milk (PCT heading 1901.9090)
(xix) Bicycle (PCT heading 87.12)
(10) in the Sixth schedule,__
(i) in table-1, in column (1),__ (a) against serial No.24, in column (3), after the figure and comma, “1510.0000”. the figure and comma “1511.1000.” shall be inserted;
(b) against serial No. 59, in column (2) after the word, “solution”, the comma and words “, cochlear implants system”, and in column (3), after the figure “99.25”, the comma and figure “, 99.37” shall respectively be inserted; and
(c) after Serial No. 71 and the entries relating thereto in columns (2) and (3), the following new Serial Nos. and entries relating thereto shall be added, namely:__
Table
(ii) in table-2, in column (I),__
(a) Against Serial No. 3, for the entry in column (2), the following shall be substituted, namely:__ “supplies made be cottage industry.”; ]
(b) after the already omitted Serial No. 12, the following new Serial No. 12, the following new Serial Nos. and entries relating thereto in columns (2) and (3) shall be added, namely:__
Table
(iii) after Table-2, amended as aforesaid, the following new Table shall be added, namely:__
Table 3
The plant, machinery, equipment and apparatus, including capital goods, specified in columns (2) of the Annexure below, falling under the HS code specified in columns (3) of that Annexure, shall be exempt from the whole of sales tax, subject to the following conditions, besides the conditions specified in column (4) of the annexure, namely:__
(i) the imported goods as are not listed in the locally manufactured items, notified through a Customs General issued by the Board from time to time or, as the case may be, certified as such by the Engineering Development Board;
(ii) except for S. No. 9 and 14 of the Annexure, the Chief Executive, or the person next in hierarchy duly authorized by the Chief Executive or head of the importing company shall certify in the prescribed manner and format as per Annex-A that the imported items are the company’s bonafide requirement. He shall furnish all relevant information online to Pakistan Customs Computerized System against a specific user ID and password obtained under section 155D of the Customs Act, 1969. In already computerized Collectorates or Customs stations where the Pakistan Customs Computerized System is not operational, the Project Director or any other person authorized by the Collector in this behalf shall enter the requisite information in the Pakistan Customs Computerized System on daily basis, whereas entry of the data obtained from the customs stations which have not yet been computerized shall be made on weekly basis; and
(iii) in case of partial shipments of machinery and equipments for setting up a plant, the importer shall, at the time of arrival of first partial shipments, furnish complete details of the machinery, equipment and components required for the complete plant, duly supported by the contract layout plan and drawings:
(iv) explanation.__ For the purpose of Table -3, capital goods mean any plant, machinery, equipment, spares and accessories, classified in Chapter 84, 85 or any other chapter of the Pakistan Customs Tariff, required for__
(a) the manufacturers or production of any goods and includes refractory bricks and materials required for setting up a furnace, catalysts, machinery tools, packaging machinery and equipment, refrigeration equipment, power generating sets and equipment, instruments for testing, research and development, quality control, pollution control and the like; or
(b) use in mining, agriculture, fisheries, animal husbandry, floriculture, horticulture, livestock, dairy and poultry industry.
Table
Certificate: it is certified that the description and quantity mentioned above are commensurate with the project requirement and that the same are not manufactured locally. It is further certified that the above items shall not be used for any other purpose.
Signature of Chief Executive, or the person next in hierarchy duly authorized by the Chief Executive Name_____________
N.I.C No. _____________
Note: in case of clearance through Pakistan Customs Computerized System, the above information shall be furnished online against a specific user ID and password obtained under 155D of the Customs Act, 1969.
Explanation.__ Chief Executive means.__
1. owner of the film having major share, in case of sole proprietorship; or
2. partner of firm having major share, in case of partnership firm; or
3. Chief Executive Officer or the Managing Director in case of limited company or multinational organization; or
4. Principal Officer in case of a foreign company.
Table
Certificate: Before certifying the above-authorized officer of the Regulatory Authority shall ensure that the goods are genuine and bonafide requirement of the project and that the same are not manufactured locally.
Signature ____________
Designation ___________
Note: In case of clearance through Pakistan Customs Computerized System, the above information shall be furnished on line against a specific user ID and password obtained under section 155D of the Customs Act, 1969.”;
(11) after the Sixth Schedule amended as aforesaid, the following new
Schedule shall be inserted, namely,__
table
Table-2
Plants, machinery, equipment and apparatus, including capital goods, specified in column(2) of the annexure below, falling under the HS Codes of five percent, subject to the following conditions, besides the conditions specified in column (4) of the Annexure, namely:
(i) The imported goods as are not listed in the locally manufactured items, notified through a Customs General Order issued by the Board from time to time or, as the case may be, certified as such by the Engineering Development Board;
(ii) The Chief Executive, or the person next in hierarchy duly authorized by the Chief Executive or Head of the importing company shall certify in the prescribed manner and format as per Annex-A that the imported items are the company’s bonafide requirement. He shall furnish all relevant information Online to Pakistan Customs Computerized System against a specific user ID and password obtained under section 155D of the customs Act, 1969. In already computerized Collectorates or Customs stations where the Pakistan Customs Computerized System is not operational, the Project Director or any other person authorized by the Collector in this behalf shall enter the requisite information in the Pakistan Customs Computerized System on daily basis, whereas entry of the data obtained from the customs stations which have not yet been computerized shall be made on weekly basis; and
(iii) In case of partial shipments of machinery and equipment for setting up a plant, the importer shall, at the time of arrival of first partial shipment, furnish complete details of the machinery, equipment and components required for the complete plant, duly supported by the contract, lay out plan and drawings.
Explanation.__ in this Table the expression, capital goods mean any plant, machinery, equipment, spares and accessories, classified in chapter 84, 85 or any other chapter of the Pakistan Customs Tariff, required for__
(a) The manufacturer or production of any goods, and includes refractory bricks and materials require for setting up a furnace, catalysts, machine tools, packaging machinery and equipment, refrigeration equipment, power generating sets and equipment, instruments for testing, research and development, quality control, pollution control and the like; or
b) Use in mining, agriculture, fisheries animal husbandry, floriculture, horticulture, livestock, dairy and poultry industry.
Table
CERTIFICATE. It is certified that the description and quantity mentioned above are commensurate with the project requirement and that the same are not manufactured locally. It is further certified that the above items shall not be used for any other purpose.
Signature of Chief Executive, or
The person next in hierarchy duly authorised
By the Chief Executive
Name_____________
N.I.C.NO_________________
NOTE:- In case of clearance through Pakistan Customs Computerized System, the above information shall be furnished on line against a specific user I.D. and password obtained under section 155D of the Customs Act, 1969.
Explanation:-
Chief Executive Mens:-
1. Owner of the firm, in case of sole proprietorship; or
2. Partner of firm having major share, in case of partnership firm; or
3. Chief Executive Officer or the Managing Director in case of limited Company or multinational organization; or
4. Principal Officer in case of a foreign company.
5. Pak Law Publication:
Office#05, Ground Floor, Arshad Mansion, Near Chowk A.G. Office, Nabha Road Lahore, Ph.042-37350473 Cell# 0300-8848226
Finance Act 2014
As Passed By National Assembly of Pakistan
Table:
CERTIFICATE:- Before certifying the above-authorized Officer of the Regulatory Authority shall ensure that the goods are genuine and bonafide requirement of the project and that the same are not manufactured locally.
Signature__________
Designation___________
NOTE: – In case of clearance thorugh Pakistan Customs Computerized System, the above information shall be furnished on line against a specific user I.D. and password obtained under section 155D of the Customs Act. ,1969”; and
(12) After the Eighth Schedule, inserted as aforesaid, the following new schedule shall be added, namely:-
“NINTH SCHEDULE
(See Sub-section (3B) of section 3)
TABLE
LIABILITY,PROCEDURE AND CONDITIONS
i. In case of the goods specified against S.No.1 of the Table, the liability to change, collect and pay tax shall be on the Cellular Mobile Operator (CMO) at the time of supply. In case of the goods specified against S.No.2, the liability to pay sales tax at the time of import shall be on the importer, and the liability to charge, collect and pay sales tax payable on supplies shall be on the Cellular Mobile Operator at the time of registering International Mobile Equipment Identity (IMEI) number in his system.
ii. The Cellular Mobile Operators shall, if not already registered, obtain registration under the Sales Tax Act, 1990.
iii. No IMEI shall be registered in his system by a Cellular Mobile Operator without charging and collecting the sales tax as specified in the Table.
iv. The Cellular Mobile Operator shall deposit the sales tax so collected through his monthly tax return in the manner prescribed in section 26 of the Sales Tax Act,1990 and rules made thereunder.
v. The Cellular Mobile Operator shall maintain proper records of all IMEI numbers regiwstered for a period of six years, and such records shall be produced for inspection, audit or verification, as and when reqjired, by an authorized Officer of Inland Revenue.
vi. The Pakistan Telecommunication Authority shall provide data regarding IMEI numbers registered with other Cellular Mobile Operators to prevent double taxation on the same IMEI number in
Case of switching by a subscriber from one operator to another, and to provide data regarding registration of IMEI numbers to the Board on monthly basis.
vii. No adjustment of input tax shall be admissible to the Cellular Mobile Operator or any purchaser of Cellular mobile Phone against the sales tax charged and paid in terms of his Schedule.
Viii. The tax specified in column (4) of the Table shall be charged, collected and paid with effect from such data as may be specified by the Board and the sales tax specified in column (3) shall stand withdrawn from the data so specified.
Note:- Not withstanding anything contained in any other law for the time being in force, the levy, collection and payment of sales tax under notification No S.R.O. 460(1)2013, dated th 30th May,2013, shall be deemed to always have been lawfully and validly levied, collected and paid.”;
1. Amendment of Act XVII of 1996.-In the Pakistan Telecommunication (Re-organization)Act,1996 (XVII of 1996), the following further amendment shall be made and shall be deemed to have been so made on the Ist be omitted.
2. Amendments of Ordinance XXIV of 2001.- In the Controller General of Accounts (Appointment, Functions and Powers)Ordinance,2001 (XXIV of 2001), in section 5, in clause (b),-
(a) After the word “may” th commas and words “. With the approval of the President,” shall be inserted; and
(b) For the semi colon, at the end, a colon shall be substituted and thereafter the following proviso shall be added, namely:-
“ Provided that in case of exigency Ministry of Finance or Finance Departments, as the case may be, may authorize payments directly from the State Bank of Pakistan and submit such information to Controller General to enable him to record the transactions;”.
1. Amendments of Ordinance XLIX of 2001._In the Income Tax Ordinance,2001 (XLIX of 2001), the following further amendments shall be made, namely:-
(1) In section 2,–
(a) Clauses(8), (9),(10) and (11) shall be re-numbered as clauses (9), (10),(11) and (8) respectively;
(b) After clause (23), the following new clause shall be inserted, namely:-
“(23A) “filer” means a taxpayer whose name appears in the active taxpayers; list issued by the Board from time to time or is holder of taxpayer’s card;”;
© In clause (29),-
(i) For the word “and”, occurring for the first time, a comma shall be substituted;
(i) After the figure “234”, the word and figure “and 236M” shall be inserted;
(ii) The words and commas “but does not include, in case of a shareholder of a company, the amount representing the face value of anuy bonus share or the amount of anuy bonus declared, issued or paid by the company to the shareholders with a view to increasing its paid up share capital”, shall be omitted:
© After clause (35B), the following new clause shall be inserted, namely:-
(“35C) “non-filer” means a person who is not a filer;”;
© After clause (59A), the following new clause shall be inserted, namely:-
(“959B) “Special Judge” means the Special Judge appointed under section 203;”; and
© After clause (61), the following new clause shall be inserted, namely:-
“(61A) “stock fund” means a collective investment scheme or a mutual fund where the investible funds are invested by way of equity shares in companies, to the extent of more than seventy percent of the investment;”;
(2) section 4A shall be omitted;
(3) in section 8, in clauses (d) and (e), for the word “sections”, the word “section” shall be substituted;
(4) in section 13, in sub-section (8), the word “the”, occurring last shall be omitted;
In section 18, in sub-section (3), for the word “lesser”, occurring twice, the word “lesser” shall be substituted;
(6) in section 21, in clause (e), after the word “fund”, occurring for the second time a comma shall be inserted;
(7) in section 31, in sub-section (I), for the expression “Banking Tribunals Ordinance, 1984” the expression “Financial Institutions (Recovery of Finances) Ordinance, 2001 (XLVI of 2001)” shall be substituted;
(8) in section 37, in sub-section (1A), the words and comma “held for a period up to two years,” shall be omitted;
(9) in section 37A, in sub-section (1),__
(a) first proviso shall be omitted;
(b) in the second proviso, the word further shall be omitted;
© in sub-section (3), after the word “capital” the comma and words “,debt securities” shall be inserted;
© After sub-section (3), amended as aforesaid, the following new sub-section shall be inserted, namely:__
“(3A) for the purpose of this section, “debt securities” means__
(a) Corporate Debt Securities such as Term Finance Certificate (TFCs), Sukuk Certificate (Sharia Compliant Bonds), Registered Bonds, Commercial Papers, Participation Term Certificates (PTCs) and Pakistani or foreign company or corporation registered in Pakistan; and
(b) Government Debt Securities such as Treasury Bills (T-Bills), Federal Investment Bonds (FIBs), Pakistan Investment Bonds (PIBs), Foreign Currency Bonds, Government Papers, municipal Bonds, Infrastructure Bonds and all kinds of debts instruments issued by Federal Government, Provincial Government, Local Authorities and other statutory bodies.”;
(10) in section 39, in sub-section (1),__
(i) in clause (i), the word “and” shall be omitted;
(ii) in clause (I), after the semicolon the word “and” shall be added;
(iii) after clause (I), amended as aforesaid, the following new clause shall be added, namely:-
“(m) income arising to the shareholder of a company, from the issuance of bonus shares.”;
(11) in section 49, after sub-section (4), for the full stop at the end a colon shall be substituted and thereafter the following proviso shall be added, namely:-
“Provided that the income from sale of spectrum licenses by Pakistan Telecommunication Authority on behalf of the Federal Government after the first day of March 2014 shall be treated as income of the Federal Government and not of the Pakistan Telecommunication Authority.”;
(12) in section 56A, for the word “onward” shall be substituted;
(13) in section 59A, in sub-section (6), for the words “Central Board of Revenue” the word “Board” shall be substituted;
(14) section 88A shall be omitted;
(15) in section 92, in sub-section (I), for full stop, at the end, a colon shall be substituted and thereafter the following proviso shall be added, namely,__
“Provided that if at least one number of the association of persons is a company, the share of such company or companies shall be excluded for the purpose of computing the total income of the association of persons and the company or the companies shall be taxed separately, at the rate applicable to the companies, according to their share.”;
(16) in section 10B, in sub-section (2), for clause (d), the following new section shall be inserted, namely:-
“100C. Tax credit for certain persons.__(I) Non-profit organizations, trusts or welfare institutions, as mentioned in sub-section (2) shall be allowed a tax credit equal to one hundred percent of the tax payable, including minimum tax and final taxes payable under any of the provision of this Ordinance, subject to the following conditions namely:__
(a) return has been filed;
(b) tax required to be deducted or collected has been deducted or collected and paid; and
© withholding tax statements for the immediately preceding tax year have been filed.
(2) Persons eligible for tax credit under this section include__
(a) any income of a trust or welfare institution or non-profit organization from donations, voluntary contributions, subscriptions, house property, investments in the securities of the Federal Government and so much of the income chargeable under the head :income from business” as is expended in Pakistan for the for the purposes of carrying out welfare activities:
Provided that in the case of income under the head “income from business”, the exemption in respect of income under the said head shall not exceeded an amount which bears to the income, under the said head, the same proportion as the said amount bears to the aggregate of the incomes from the aforesaid sources of income.
(a) a trust administered under a scheme approved by the Federal Government in this behalf and established in Pakistan exclusively for the purposes of carrying out such activities as are for the benefit and welfare of__
(i) ex-servicemen and serving personnel, including civilian employees of the Armed Forces, and their dependents; or
(ii) ex-employees and serving personnel of the Federal Government or a Provincial Government and their dependents, where the said trust is administered by a committee nominated by the Federal Government or, as the case may be, a Provincial Government;
© a trust or welfare institution or non-profit organization approved by Chief Commissioner for the purpose of this sub-clause;
(a) income of a university or other educational institution being run by a non-profit organization existing solely for educational purposes and not for purpose of profit;
(b) any income which is derived from investments in securities of the Federal Government, profit on debt from schedule banks, grant received from Federal Government or Provincial Government or District Governments, foreign grants and house property held under trust or other legal obligations wholly, or in part only, for religious or charitable purpose and is actually applied or finally set apart for application thereto:
© Provided that nothing in this clause shall apply to so much of the income as is not expended within Pakistan:
Provided further that if any sum out of the amount so set apart is expanded outside Pakistan, it shall be included in the total income of the tax year in which it was set apart, whichever is the greater, and the provisions of section 122 shall not apply to any assessment made or to be made in pursuance of this proviso.
Explanation.__ Notwithstanding anything contained in the Mussalman Wakf Validating Act, 1913 (VI of 1913), or any other law for the time being in force or in the instrument relating to the trust or the institution, if any amount is set apart, extended or disbursed for the maintenance and support wholly or partially of the family children or descendents of the author of the trust or the donor or, the maker of the institution or for his own maintenance and support during his life time or payment to himself or his family, children, relations or descendents or for the payment of his or their debts out of the income from house property dedicated, or if any expenditure is made other than for charitable purposes, in each case such expenditure, provision, setting apart, payment or disbursement shall not be deemed, for the purposes of this clause, to be for religious or charitable purposes; or
(a) any income of a religious or charitable institution derived from voluntary contributions applicable solely to religious or charitable purposes of the institution:
Provided that nothing contained in this clause shall apply to the income of a private religious trust which does not enure for the benefit of the public.”;
(18) in section 113,__
(i) in sub-section (1), for the words “equal to one percent of the person’s turnover for the year”, the words “the amount of minimum tax computed on the basis of rates as specified in Division IX of part I of First Schedule” shall be substituted; and
(ii) in sub-section (2), in clause (b), for the words “an amount equal to one percent of the person’s turnover for the year”,the words “minimum tax computed on the basis of rates as specified in Division IX of Part I of First Schedule” shall be substituted;
(19) after section 113B, the following new section 113C shall be inserted, namely:__
“113C. Alternatively Corporate Tax .__ (1) Notwithstanding anything contained in this Ordinance, for tax year 2014 and onwards tax payable by a company shall be higher of the Corporate Tax or Alternatively Corporate Tax.
(2) For the purpose of this section.__
(a) “Accounting Income” means the accounting profit before tax for the tax year, as disclosed in the financial statement or as adjusted under sub-section (7) or sub-section (11) excluding share from the associate recognized under equity method of accounting;
(b) “Alternative Corporate Tax” means the tax at a rate of seventeen percent of a sum equal to accounting income less the amounts, as specified in sub-section (8), and determined in accordance with provisions of sub-section (7) hereinafter;
© “Corporate Tax” means total payable by the company, including tax payable on account of minimum tax and final taxes payable, under any of the provisions of this Ordinance but not including those mentioned in section 8, 161 and 162 and any amount charged or paid on account of default surcharge or penalty and the tax payable under this section.
(3) The sum equal to accounting income, less any amount to be excluded therefrom under sub-section (8), shall be treated as taxable income for the purpose of this section.
(4) The excess of Alternatively Corporate Tax paid over Corporate Tax payable for the tax year shall be carried forward and adjusted against the tax payable under Division II of part 1 of the First Schedule, for following year.
(5) if the excess tax, as mentioned in sub-section (4), is not wholly adjusted as specified in sub-section (4) in that year, and so on, but the said excess cannot be carried forward to more than ten tax years immediately succeeding the tax year for which the excess was first computed.
(5) If the excess tax, as mentioned in sub-section (4), is not wholly adjusted, the amount not adjusted shall be carried forward to the following tax year and adjusted as specified in sub-section (4) in that year, and so on, but the said excess cannot be carried forward to more than ten tax years immediately succeeding the tax year for which the excess was first computed.
Explanation.__ For the purpose of this sub-section the mechanism for adjustment of excess of Alternative Corporate Tax over Corporate Tax, specified in this section, shall not prejudice or affect the entitlement of the taxpayer regarding carrying forwarded and adjustment of minimum tax referred to in section 113 of this Ordinance.
(6) If Corporate Tax or Alternatively Corporate Tax is enhanced or reduced as a result of any amendment, or as a result of any order under the Ordinance, the excess amount to be carried forward shall be reduced or enhanced accordingly.
(7) for the purpose of determining the “Accounting Income”, expenses shall be appointed between the amount to be excluded from accounting income under sub-section (8) and the amount to be treated as taxable income under sub-section (3).
(8) The following amounts shall be excluded from accounting income for the purpose of computing Alternatively Corporate Tax:__
(i) exempt income;
(ii) income subject to tax under section 37A and final tax chargeable under sub-section (7) of section 148, section 150, sub-section (3) of section 153, sub-section (4) of sections 154, 156 and sub-section (3) of section 233;
(iii) income subject to tax credit under section 65D and 65 E;
(iv) income subject to tax credit under section 100C; and
(v) income subject to tax credit under section to clause (18A) of Part-II of the second schedule;
(9) The provision of this section shall not apply to taxpayers chargeable to tax in accordance with the provisions contained in the Fourth, Fifth and Seventh Schedules.
(10) Tax credit under section 65B shall be allowed against Alternative Corporate Tax.
(11) The Commissioner may make adjustments and proceed to compute accounting income as per historical accounting pattern after providing an opportunity of being heard.”;
(20) in section 114, in sub-section (1), in clause (b), in sub-section (ix), after the word “is” the words “a resident person” shall be inserted;
(21) in section 122B, in the heading and in sub-sections (1) and (2), for the words “Regional Commissioner”, wherever occurring, the words “Chief Commissioner” shall be substituted.
(22) in section 127,__
(a) for the words “taxation officer”, the words “Officer of Inland Revenue” shall be substituted;
(b) in sub-section (2), in clause (b), for the word “again”, the word “against” shall be substituted;
(23) in section 130, in sub-section (4),__
(i) in clause (b), the word “or”, occurring at the end, shall be omitted;
(ii) in clause (c), for the full stop, at the end, a semicolon and the word “or” shall be substituted and thereafter the following new clause shall be added, namely:__
“(d) a person who has, for a period of not less than ten years, practiced professionally as a cost and management accountant within the meaning of the Cost and Management Accountants Act, 1966 (XIV of 1966).”;
(24) in section 148,__
(a) in sub-section (7), in clause (d),__
(i) in sub-clause (viii), for the words “with Sales Tax Department” the expression “under the Sales Tax Act, 1990” shall be substituted;
(ii) in sub-clause (ix), for the words, “for sales tax purposes” the expression “under the Sales Tax Act, 1990” shall be substituted;
(b) after sub-section (8), the following new sub-section shall be inserted, namely:__
“(8A) The tax collected under this section at the time of import of ships by ship-breakers shall be final tax.”;
(25) in section 149, after sub-section (2), the following new sub-sections shall be added, namely:__
“(3) Notwithstanding anything contained in sub-sections (1) and (2), every person responsible for making payment for directorship fee or fee attending board meeting or such fee by whatever name called, shall at the time of payment, deduct tax at the rate of twenty percent of the gross amount payable.
(4) Tax deductible under sub-section (3) shall be adjustable.”;
(26) in section 150, for the expression “Division III Part I” the expression “Division I of Part III” shall be substituted;
(27) in section 151,
(a) in sub-section (1), after the word “Division” for the figure “I” the figure “IA” shall be substituted; and
(b) in sub-section (3), for the full stop, at the end, a colon shall be added, namely:__
“Provided that in the case of a non-filer other than a company the final tax shall be equal to the tax deductable in the case of filer and the tax deductible in the case of filer and the tax deducted in excess of that shall be advance income tax adjustable against tax liability.”;
(28) In section 153, in sub-section (i), in clause ©,-
(i) after the word and comma “contract”, the words “including contract signed by a sportsperson” shall be inserted; and
(ii) for the words “other than”, the words “but not including” shall be substituted;
(29) In section 156, in sub-section (3), after the word “under”, occurring for the second time, the word and hyphen”sub-“ shall be inserted;
(30) in section 159,-
(i) in sub-section (1), in clause (b), for the comma, a semicolon and the word”; or” shall be substituted and thereafter the following new clause shall be added, namely:-
“(c) is subject to hundred per cent tax credit under section 100C,”;
(ii) in sub-section (4), for the word “one”, the word “on” shall be substituted;
(31) in section 169, I n sub-section (1), in clause (b), for the word “of”, occurring for the eighth time, the word “or” shall be substituted;
(32) after section 181A, the following new section shall be inserted, namely:-
“181AA. Compulsory registration in certain cases._(1) Notwithstanding anything contained in any law, for the time being in force, any application for commercial or industrial connection of electricity or natural gas, shall not be processed and such connection shall not be provided unless the person applying for electricity or gas connection is registered under section [8].”;
(33) in section 203, in sub-section (1), for full stop at the end a colon shall be substituted and thereafter the following proviso shall be added, namely:-
“Provided that the Federal Government may, be notification in official Gazette, declare that a Special Judge appointed under section 185 of the Customs Act 1969 (IV of 1969) shall have jurisdiction to try offences under this Ordinance.”;
144 THE GASZETTE OF PAKISTAN, EXTRA., JUNE 26,2014 (PART I
(34) for section 231B, the following shall be substituted, namely:-
“231B. Advance tax on private motor vehicles.—(1)
Every motor vehicle registering authority of
Excise and Taxation Department shall collect advance tax at the time of registration of a motor vehicle, at the rates specified in Division VII of Part IV of the First Schedule.
(2) Every motor vehicle registering authority of Excise and Taxation Department shall collect advance tax at the time of transfer of registration or ownership of a private motor vehicle, at the rates specified in Division VII of part IV of the First Schedule:
Provided that no collection of advance tax under this sub-section shall be made on transfer of vehicles after five years from the date of first registration in Pakistan.
(3) Every manufacturer of a motor car or jeep shall collect, at the time of sale of a motor car or jeep, advance tax at the rate specified in Division VII of Part IV of the first Schedule from the person to whom such sale is made.
(4) Sub-section (1) shall not apply if a person produces evidence that tax under sub-section (3) in case of a locally manufactured vehicle or tax under section 148 in the case of imported vehicle was collected from the same person in respect of the same vehicle.
(5) The advance tax collected under this section shall be adjustable:
(a) The Federal Government;
(b) A Provincial Government;
(c) A Local Government;
(d) A foreign diplomat; or
(e) A diplomatic mission in Pakistan.”;
(35) after section 235, the following new sections shall be inserted, namely:-
PART1] THE GAZETTE OF PAKISTAN, EXTRA., JUNE 26,2014 145
“235A. Domestic electricity consumption:- (1) There shall be collected advance tax at the rates specified in Division XIX of Part IV of the First Schedule on the amount of electricity bill of a domestic consumer.
(2) The person preparing electricity consumption bill shall charge advance tax under sub-section (1) in the manner electricity consumption charges are charged.
(3) Tax collected under this section shall be adjustable against tax liability.
235B. Tax on steel melters, re-rollers etc.-(1) There shall be collected tax from every steel melter, steel re-roller, composite steel units, registered for the purpose of Chapter XI of Sales Tax special Procedure Rules,2007 at the rate of one rupee per unit of electricity consumed for the production of steel billets, ingots and mild steel (MS Products) excluding stainless Steel.
(2) The person preparing electricity consumption bill shall charge and collect the tax under sub-section (1) in the manner electricity consumption charges are charged and collected.
(3) The tax collected under sub-section (1) shall be deemed to be the tax required to be deducted under sub-section (1) of section 153 on the payment for local purchase of scrap.
(4) Tax collected under sub-section (1) shall be non-adjustable and credit of the same shall not be allowed to any person.”;
(36) in section 236B,–
(a) in sub-section (2), for the words “person preparing” the words “airline issuing” shall be substituted;
(b) after sub-section (2), amended as aforesaid, the following new sub-section shall be inserted, namely,–
“(2A) The mode, manner and time of collection shall be as may be prescribed.”;
145 THE GAZETTE OF PAKISTAN, EXTRA., JUNE 26,2014 PART[1
(37) after section 236J, the following new sections shall be inserted, namely:-
“236K. Advance tax on purchase or transfer of immovable property.-(1) Any person responsible for registering or attesting transfer of any immovable property shall at the time of registering or attesting the transfer shall collect from the purchaser or transferee advance tax at the rate specified in Division XVIII of Part IV of the First Schedule.
(2) The advance tax collected under sub-section (1) shall be adjustable.
(3) The advance tax under this section shall not be collected in the case of the Federal Government, a Provincial Government, a Local Government or a foreign diplomatic mission in Pakistan.
(4) Nothing contained in this section shall apply to a scheme introduced by the Federal Government, or a Provincial Government or an Authority established under a Federal or Provincial Law for expatriate Pakistanis.
236L. Advance tax on purchase of international air ticket.-(1) Every airline, issuing ticket for journey originating from Pakistan, shall collect advance tax at the rates specified in Division XX of Part IV of the First Schedule, on the gross amount of international air tickets issued to passengers booking one-way or return, from Pakistan.
(2) The airline issuing air ticket shall collect or charge advance tax under sub-section (1) in the manner air ticket charges are collected or charged, either manually or electronically.
(3) The mode, manner and time of collection under sub-section (1) shall be as may be prescribed.
(4) The advance tax collected under sub-section (1) shall be adjustable.
236M. Bonus shares issued by companies quoted on stock exchange.-(1) Notwithstanding anything contained in any law for the time being in force, every company, quoted on stock exchange, issuing bonus shares to the shareholders of the company, shall withhold five per cent of the bonus shares to be issued.
PART1] THE GAZETTE OF PAKISTAN, EXTRA., JUNE 26, 2014 147
(2) Bonus shares withheld under sub-section (1) shall only be issued to a shareholder, if the company collects from the shareholder, tax equal to five percent of the value of the bonus shares issued to the shareholder including bonus shares withheld, determined on the basis of day-end price on the first day of closure of books.
(3) Tax under sub-section (2), shall be collected by the company, within fifteen days of the first day of closure of books.
(4) If the shareholder fails to make the payment of tax under sub-section n(2) within fifteen days or the company fails to collect the said tax within fifteen days, the company shall deposit the bonus share withheld under sub-section (1) in the Central Depository Company of Pakistan Limited or any other entity as may be prescribed.
(5) Bonus shares deposited in the Central Depository Company of Pakistan Limited or the entity prescribed under sub-section (4) shall be disposed of in the mode and manner as may be prescribed and the proceeds thereof shall be paid to the Commissioner, by way of credit to the Federal Government.
(6) Issuance of bonus shares shall be deemed to be the income of the shareholder and the tax collected by the company under sub-section (2) or proceeds of the bonus shares disposed of and paid under sub-section (5) shall be treated to have been paid on behalf of the shareholder.
(7) Tax paid under this section shall be a final tax on the income of the shareholder of the company arising from issuance of bonus shares.
236N. Bonus shares issued by companies not quoted on stock exchange.-(1) Notwithstanding anything contained in any law for the time being in force, every company, not quoted on stock exchange, issuing bonus shares to the shareholders of the company, shall deposit tax, within fifteen days of the closure of books, at the rate of five per cent of the value of the bonus shares on the first day of closure of books, whether or not tax has been collected by the company under sub-section(3).
(2) Issuance of bonus shares shall be deemed to be the income of the shareholder and tax deposited under sub-section(1) shall be treated to have been deposited on behalf of the shareholder.
(3) A company liable to deposit tax under sub-section (I), shall be entitled to collect and recover the tax deposited under sub-section (I), from the shareholder, on whose behalf the tax has been deposited, before the issuance of bonus shares.
(4) If a shareholder neither makes payment of tax to the company nor collects its bonus shares, within three months of the date of issuance of bonus shares, the company may proceed to dispose of its bonus shares to the extent it has paid tax on its behalf under sub-section (I).
(5) Tax paid under this section shall be a final tax on the income of the shareholder of the company arising from issuance of bonus shares.
(6) The Board may prescribed rules for determination of value of shares under sub-section (I).
(38) in section 239, in sub-section (13), for the words and comma, “amended, modified”, the words and comma “amended, modified”, shall be substituted;
(39) in the First Schedule,__
(I) in part I,__
(A) in Division I,__
(i) after paragraph (1A), the following new paragraph shall be inserted, namely:-
“(IB) Where the taxable income in a tax year, other than income on which the deduction of tax is final, does not exceed one million rupees of a person__
(i) holding a National Database Registration Authority’s Computerized National Identity Card for disabled persons; or
(ii) a taxpayer of the age of not less than sixty years on the first day of that tax year, the tax liability on such income shall be reduced by 50 percent.”;
(ii) paragraph (2) shall be omitted.
(B) in Division II, in clause (i), in the proviso for full stop at the end a colon shall be substituted and thereafter the following new proviso shall be added, namely:-
“Provided further that the rate of tax imposed on the taxable income of a company, other than a banking company shall be 33 percent for the tax year 2015.”;
(c) for Division III, the following shall be substituted, namely:-
“Division III
Rate of dividend Tax
The rate of tax imposed under section 5 on dividend received from a company shall be__
(a) 7.5 percent in the case of dividends declared or distributed by purchaser of a power project privatized by WAPDA or on shares of a company set up for power generation or on shares of a company, supplying coal exclusively to power generation projects; and
(b) 10 percent, in all other cases:
Provided that the dividends received by a person from a stock fund shall be taxed at the rate of 12.5 percent for tax year 2015 and onwards, if dividends receipts are less than capital gains:
Provided further that the dividends received by a company from a collective investment scheme or a mutual fund, other than a stock fund, shall be taxed at the rate of 25 percent for tax year 2015 and onwards.”;
(D) in Division-VII, for the table, the following shall be substituted namely:-
Table
Provided that the rate for companies shall be as specified in Division II of Part I of First Schedule, in respects of debt securities;
(E) in Division VIII, in the Table, after S.No , the following new S.No and corresponding entries relating thereto in columns (2) and (3), shall be added, namely:-
“3 where holding period of immovable property is more than two years.”; 0 percent
(F) after Division VIII, amended as aforesaid, the following new Division shall be added, namely,__
Table
(II) for part II, the following shall be substituted, namely:_
Table
(III) Part IIA shall be omitted;
(IV) in Part III,_
(a) For Division I, the following shall be substituted, namely:-
“Division I
Advance Tax on Dividend
The rate of tax to be deducted under section 150 shall be__
(a) 7.5 percent in the case of dividends declared or distributed by purchaser of a power project privatization by WAPDA or on shares of a company set up for power generation or on shares of a company, supplying coal exclusively to power generation projects;
(b) 10 percent for filers other than mentioned in (a) above;
(c) 15 percent for non-filers other than mentioned in (a) above;
Provided that the rate of t ax required to be deducted by a collective investment scheme or a mutual fund shall be__
Table
Provided further that in case of a stock fund if dividend receipts of the fund are less than capital gains, the rate of tax deduction shall be 12.5 percent.
Dividend 1A
Profit on Debt
The rate of tax to be deducted under section 151 shall be 10 percent of the yield or profit for filers and 15 percent of the yield or profit paid, for non-filers:
Provided that for a non-filer, if the yield or profit paid is rupees five hundred thousand or less, the rate shall be ten percent”;
(b) in Division III,__
(A) in paragraph (i), in sub-paragraph (b),__
(i) in clause (i), for the figure “3.5”, the figure “4” shall be substituted; and
(ii) in clause (ii), for the figure “4”, the figure “4” shall be substituted;
(B) In paragraph (2), in sub-paragraph (ii),__
(i) in clause (a), for the figure “6”, the figure “8” shall be substituted; and
(ii) in clause (b), for the figure “8”, the figure “10” shall be substituted;
(c) in paragraph (3),__
(i) in sub-paragraph (i), for the figure “6”,the figure “7” shall be substituted;
(ii) in sub_paragraph (ii), for the figure”6.5”, the figure “7.5” shall be substituted; and
(iii) after sub-paragraph (ii), amended as aforesaid, the Following new sub-paragraph shall be added, namely:-
“(iii) 10% of the gross amount payable in case of Sportspersons.”; (c) in division IV, in paragraph (3), for the figure “0.5”,the figure “I” shall be substituted;
(d) in Division VIA, for the figure“10”, the figure”12”shall be substituted;
(V) in part IV,_
(a) for Division II, the following shall be substituted, namely:_
Division II
Brokerage and commission
The rate of collection under sub-section (i) of section 233 shall be,_
(a) 7.5 percent of the amount of the payment, in case of advertising agent;
(b) 12 percent of the amount of payment in all other cases,”;
(b) in Division III,_
(i) for clause (3), the following shall be substituted, namely:-
“(3) in case of other private motor cars shall be as following ,_
Table
(c) in Division V, in clause (b), for the figure “15”, the figure “14” shall be substituted;
(d) in Division VI, after the word “withdrawn” the words and figures “for filers and 0.5 percent of the cash amount withdrawn, for non-filers” shall be inserted;
(e) for Division VII, the following shall be substituted, namely:-
“Division VII
Advance tax on purchase of private motor car and jeep
The rate of tax under sub-section (1), (2) and (3) of section 231B shall be as follows:-
Table
Provided that the rate of tax to be collected under sub-section (2) of section 231B, shall be reduced by 10 percent each year from the date of first registration in Pakistan.;
(f) in Division X, after the word “received” the words and figures “for filers and one percent of the gross amount of the consideration received for non-filers.” Shall be added;
(g) in Division XI, for the figure “10” the figure “5” shall be substituted;
(ga) for Division XIV, the following shall be substituted, namely:-
“Division XIV
The rate of collection of tax under section 236G shall be as follows:-
Table
Provided that the rate of tax for non-filer shall be one percent up to the date appointed by the Board through notification in official gazette.
Division XIX
Advance tax on domestic electricity consumption
The rate of tax to be collected under section 235A shall be__
(i) 7.5 percent if the amount of monthly bill is Rs. 100,000 or more; and
(ii) 0 percent the amount of monthly bills is less than Rs.100,000.
Division XX
Advance tax on international air ticket
The rate of tax to be collected under section 236L shall be:-
Table
(40) in the SECOND SCHEDULE,__
(I) in part I,__
(a) in clause (4), in sub-clause (b) for the words “income year”, the words “tax year” shall be substituted;
(b) clause (35) shall be omitted;
(c) in clause (57), in sub-clause (3), after paragraph (xii), the following new paragraph shall be added, namely,__
“(xiii) Sindh Province Fund establish under the Sindh Province Pension Fund Ordinance, 2002.”;
(d) clauses (58), (58A), (59) and (60) shall be omitted;
(e) in clause (66),__
(i) sub-clause (v) shall be omitted;
(ii) clause (xxiv), occurring for the second time, clause (xxv), clause (xxvii), clause (xxviii), occurring thrice and clause (xxix) shall be re-numbered as clauses (xxv), (xxvi), (xxvii), (xviii), (xxix), (xxx) and (xxxi) respectively;
(iii) after sub-clause (xxxi), re-numbered as aforesaid, the following new sub-clause shall be added, namely:_
“(xxx) Greenstar Social Marketing Pakistan (Guarantee) Limited.”;
(f) clauses (81A), (88A), (92A) and (93A) shall be omitted;
(g) in clause (99), for the full stop, at the end, a colon shall be substituted and thereafter, the following proviso shall be added, namely:-
“provided that for the purpose of determining distribution of at least 90 percent of accounting income, the income distributed through bonus shares, units or certificates as the case may be, shall not be taken into account.”;
(h) for clause (126), the following shall be substituted, namely:-
“(126) Any income of a public sector university established solely for educational purposes and not for the purposes of profit, with effect from the 1st day of July, 2013.”;
(i) for clause (126A) the following shall be substituted, namely:-
“(126A income derived by China Overseas Ports Holding Company Limited from Gwadar Port operations for a period of twenty years, with effect from the sixth day of February, 2007.”;
(j) after clause (126G), the following new clause shall be inserted, namely:-
“(126H) Profits and gains derived by a taxpayer, from a fruit processing or preservation unit set up in Balochistan Province, Malakand Division, Giligit-Baltistan and FATA between the first day of July, 2014 to the thirtieth day of June, 2017, both days inclusive, engaged in processing of locally grown fruits, for a period of five years beginning with the month in which the industrial undertaking is set up or commercial production is commenced, whichever is later.”;
(k) after clause (132A), the following new clause shall be inserted, namely:-
“(132B) Profits and gains derived by a taxpayer from a coal mining project in Sindh, supplying coal exclusively to power generation projects.”; and
(I) clause (135) shall be omitted;
(II) in part II,__
(a) in clause (3),__
(i) after the word, “rendered” the words “and construction contracts” shall be inserted;
(ii) For the words, “such receipts” the words “receipts from services and income from contracts” shall be substituted; and
(b) clauses (3A), (9B), (9C), (13E), (13HH), (13HHH) and (17) shall be omitted;
(c) in clause (14B), for the full stop at the end a colon shall be substituted and thereafter the following new provisos shall be added, namely:-
“Provided that owners of the passenger transport vehicles may pay tax for the period 1st day of July, 2012 to 30th day of June, 2013 at the rates under this clause, if the tax is paid by the 30th day of June, 2014:
Provided further that the tax already paid from 1st day of July, 2012, as per rates specified in Division III of Part IV of First Schedule, shall not be refunded.”;
(d) after clause (18), the following new clause shall be inserted, namely:-
“(18A) The rate of tax as specified in Division II of Part I of the First Schedule shall be reduced to 20 percent for a company setting up an industrial undertaking between the first day of July, 2014 to the thirtieth day of June, 2017, for a period of five years beginning from the month in which the industrial undertaking is set up or commercial production is commenced, whichever is later:
Provided that fifty percent of the cost of the project including working capital is through owner equity foreign direct investment.”;
(e) clause (19), (20), (23), (24), (24B), (26), (29) and (30) shall be omitted;
(III) in part III,__
(a) in clause (I), in sub-clause (I), in paragraph (a), the word and comma “pilots,” shall be omitted;
(b) clause (1A) shall be omitted;
(c) after clause (1A), omitted as aforesaid, the following new clause shall be inserted, namely:-
“(1AA) Total allowance received by pilots of any Pakistani airlines shall be taxed at a rate of 7.5 provided that the reduction under this clause shall be available to so much of the allowance as exceeds an amount equal to the basic pay.”; and
(d) Clause (5), (7), (8), (9), (10), (11), (12), (13), (14) and (15) shall be omitted;
(IV) in part IV,__
(a) after clause (5), the following new clause shall be inserted namely:-
“(9A) Provisions of clause (a) of sub-section (I) of section 153, shall not apply to steel melters, steel re-rollers, composite steel units, as a payer, in respect of purchase of scrap, provided that tax is collected in accordance with section 235B:
Provided that steel melters, steel re-rollers and composite steel units may opt to pay tax in accordance with section 235B, for tax year 2012 and 2013, if tax liability for the said tax years is paid by the 30th day of June, 2014:
Provided further that where tax has been deducted under clause (a) of sub-section (I) of section 153 or paid under an order under section 161, it shall not be refundable.;
(9AA) Provisions of clause (a) of sub-section (I) of section 153, shall not apply to ship breakers as recipient of payment:
Provided that this clause shall only apply for ships imported after the July 1st, 2014.”;
(b) clauses (10) and (10A) shall be omitted;
(c) in clause (11A), in sub-clause (v), after the figure and brackets, “(132)” the following shall be inserted, namely:-
“and clause (132B)”;
(d) clause (38B) shall be omitted;
(e) in clause (38C), after the word, “section”, the figure and comma “150,” shall be inserted;
(f) clauses (41A), (41AAA) and (41B) shall be omitted;
(g) after clause (56A), the following new clause shall be inserted, namely:-
“(56B) The provisions of sub-section (7) of section 148, and clause (a) of sub-section (I)of section 169 shall not apply to a person being a commercial importer if the person opts to file return of total income along with accounts and documents as may be prescribed, subject to the condition that minimum tax liability under normal tax regime shall not be less than 5.5 percent, of the imports, if the person is a company and 6 percent otherwise.
(56C) The provisions of subsection (3) of section 153, in respect of sale of goods and clause (a) of sub-section (I) of section 169 shall not apply to a person, if the person opts to file return of total income along with accounts and documents as may be prescribed subject to the condition that minimum tax liability under normal tax regime shall not be less than 3.5 percent of the gross amount of sales, if the person id a company and 4 percent otherwise.
(56D) The provisions of sub-section (3) of section 153, in respect of contracts and clause (a) of sub-section (I) of section 169 shall not apply to a person if the person opts to file return of total income along with accounts and documents as may be prescribed subject to the condition that minimum tax liability under normal tax regime shall not be less than 6 percent of contract receipts, if the person is a company and 6.5 percent otherwise.
(56E) The provisions of sub-section (2) of section 153 and clause (a) of sub-section (I) of section 169 shall not apply in respect of a person if the person opts to file return of total income along with accounts and documents as may be prescribed subject to the condition that minimum tax liability under normal tax regime shall not be less than 0.5 percent of gross amount of services received.
(56F) The provisions of sub-section (2) of section 156A and clause (a) of sub-section (I) of section 169 shall not apply in respect of a person if the person opts to apply in respect of a person if the person opts to file return of total income along with accounts and documents as may be prescribed, subject to the condition that minimum tax liability under normal tax regime shall not be less than 10 percent of the commission or discount received.
(56G) The provisions of sub-section (3) of section 233 and clause (a) of sub-section (I) of section 169 shall not apply in respect opts to file return of total income along with accounts and documents as may be prescribed, subject to the condition that minimum tax liability under normal tax regime shall not be less than 10 percent of the commission.”;
(h)in clause 57,__
(i) in sub-clause (vi), for the words, “with Sales Tax Department” the words, comma and figure “under the Sales Tax Act, 1990” shall be substituted;
(ii) after the second proviso, the following new explanation shall be added, namely:-
“Explanation._ For the removal of doubt, exemption under this clause, in respect of section 153, shall only be available as a recipient and not as withholding agent.”;
(i) after clause (72B), the following proviso shall be added namely:_
“Provided that the certificate shall only be issued by the Commissioner if an application for the said certificate is filed before the Commissioner, in the manner and after fulfilling the conditions as specified by notification in the official Gazette, issued by the Board for the purpose of this clause.”
(j) clause (80) shall be omitted;
(k) in clause (82), for the figure, “2013”, the figure “2014” shall be substituted; and
(I) clauses (84), (85), (87) and (88) shall be omitted.;
(41) in the THIRD SCHEDULE, in Part II, in clause (I), for the figure “25”, occurring for the second time, the figure “15” shall be substituted; and
(42) in the SEVENTH SCHEDULE,__
(A) in rule 6,__
(i) for the words “income under the head “Dividend” and” the words “net income from Dividend” and net income from” shall be substituted; and
(ii) for the words “percent”, the words “and twelve and a half, respectively” shall be substituted; and
(B) after rule 6, amended as aforesaid, the following new rules shall be inserted:-
“6A. for the purpose of rule 6, net income from dividend shall be computed according to the following formula, namely:-
(A/C) x B
Where
A is the total amount of expenditure as per this Schedule;
B is the gross amount of dividend received; and
C is the gross amount of receipts including dividend
6B. For the purpose of rule 6, net income from capital gains shall be computed according to the following formula, namaely:
(A/C) x B
Where;
A is the total amount of expenditure as per this schedule;
B is the gross amount of capital gains; and
C is the gross amount of receipts including capital gains.”
8. Amendments of the Federal Excise Act, 2005. In the federal Excise Act 2005, the following further amendments shall be made, namely:-
(1) in section 12, in sub-section (4), in the proviso, for the full stop, at the end, a colon shall be substituted and thereafter, the following new proviso shall be added, namely:-
“provided further that the Board may through a general order specify zones or areas only for the purpose of determination of highest retail price for any brand or variety of goods.”
(2) in the first schedule,-
(a) in table I, in column (1),
(i) for S. Nos. 9 and 10 and the corresponding entries relating thereto in column (2), (3) and (4), the following shall respectively be substituted , namely:-
“9. Locally produced cigarettes 24.02 rupees two
If their on-pack printed retail thousand six
Price exceeds rupees two hundred and thirty
Thousand seven hundred and two per thousand
Six per thousand cigarettes cigarettes.
10. Locally produced cigarettes
If their on-pack printed retail 24.02 Rupees one
Price does not exceed rupees thousand and eighty
Two thousand seven hundred five per thousand
And six per thousand cigarettes. Cigarettes.”
(ii) against S. No. 13, column (4), for the words “four hundred rupees per metric ton’ the words “five per cent of the retail price” shall be substituted; and
(iii) against S. No. 55, in column (2), for the word “Motor”, the words “Imported motor” shall be substituted;
(iv) in the heading “Restrictions” in the sub-heading “Variant at different price points” for figures and hyphen “2012-13” the words “of the current financial year” shall be substituted; and
(b) in table-II. In column (1),
(i) against S.No.3, for the entries relating thereto in columns (2), (3) and (4), the following shall be substituted, namely:-
“Facilities for travel 98.03
(a) Services provided or render 9803.1000
In respect of travel by air of
Passengers within the territorial
Jurisdiction of Pakistan,–
(i) Long routes Two thousand and five hundred
Rupees.
(ii) Short routes One thousand
Two hundred and
Fifty rupees.
(iii) Socio-economic Five hundred
Routes rupees
Explanation: For the purpose of this entry, “long routes” means journeys exceeding 500 Kilometers, “short routes” means the remaining journeys, other than socio-economic routes, and “socio-economic routes” means journeys along the Balochistan coastal belt. Routes exempt from duty as on 1st July,2014 shall, however, remain exempt.
(b) Service provided or
Rendered in respect of travel
By air of Passengers embarking
From Pakistan,–
(i) Economy and Five thousand
Economy plus rupees
(ii) Club, business and Ten thousand
First class. Rupees;
(ii) against S.No.6,–
(a) in column (2), after the word “services”, the comma and words “, excluding such services in the area of a Province where such Province has
Imposed Provincial sales tax and has started collecting the same through its own Board or Authority, as the case may be “shall be added; and
(b) in column (4), for the word “nineteen”. The word “Eighteen” shall be substituted; and
(iii) after S.No. 14, the following new se4rial number and corresponding entries relating thereto in columns (2), (3) and (4) shall be added, namely:-
“15. Chartered flights 98.03 Sixteen percent
of the charges.”
9. Amendment of Act XXI of 2011.—In the Gas infrastructure Development Cess Act, 2011 (XXI of 2011), the following further amendments shall be made namely:-
(I) in section 3, in sub-section(1), for the full stop, at the end, a colon shall be substituted and thereafter the following proviso shall be added, namely:-
“Provided that the Federal Government may decide to levy any rate of Cell on any category of gas consumers subject to maximum rate provided in the Second Schedule.”,
(2) in the First Schedule,
(a) in entry 4, the word “and”, at the end, shall be omitted;
(b) in entry 5, for the full stop, at the end, a semi colon and the word “and” shall be substituted and thereafter the following shall be added, namely:-
“6 Oil and Gas Development Company Limited; and
7. Any other company engaged in sale of gas to any category of gas consumers as notified in the official gazette.”;
(3) for the Second Schedule, the following shall be substituted, namely:-
TABLE:
THE SECOND SCHEDULE
[see section 2(12)]
“FIFTH SCHEDULE TO THE CUSTOMS ACT 1969 (IV OF 1969)
[see section 18]
Part-I
Imports of Plant, Machinery, Equipment and Apparatus, including Capital Goods for various industries/sectors
Note:- For the purposes of this Part, the following conditions shall apply besides the conditions as specified in column (5) of the Table below:-
(i) the imported goods as are not listed in the locally manufactured items, notified through a Customs General Order issued by the Federal Board of Revenue (FBR) from time to time or, as the case may be, certified as such by the Engineering Development Board;
(ii) except for S.No.1(E),15, 23 and 24 of the Table, the Chief Executive, or the person next in hierarchy duly authorized by the Chief Executive or Head of the importing company shall certify in the prescribed manner and format as per Annex-A that the imported items are the company’s bonafide requirement. He shall furnish all relevant information online to Pakistan Customs Computerized System against a specific user ID and password obtained under section 155D of the Customs Act,1969 (IV of 1969). In already computerized Collectorates or Customs stations where the Pakistan Customs Computerized System is not operational, the Director Reforms and Automation or any other person authorized by the Collector in this behalf shall enter the requisite information in the Pakistan Customs Computerized System on daily basis, whereas entry of the data obtained from the customs stations which have not yet been computerized shall be made on weekly basis; and
(iii) in case of partial shipments of machinery and equipment for setting up a plant, the importer shall, at the time of arrival of first partial shipment, furnish complete details of the machinery, equipment and components required for the complete plant, duly supported by the contract, lay out plan and drawings.
Explanation:- Capital Goods means any plant, machinery, equipment, spares and accessories, classified in chapters 84,85 or any other chapter of the Pakistan Customs Tariff, required for –
(a) the manufacturer or production of any goods, and includes refractory bricks and materials required for setting up a furnace, catalysts, machine tools, packaging machinery and equipment, refrigeration equipment, power generating sets and equipment, instruments for testing , research and development, quality control, pollution control and the like; and
(b) use in mining, agriculture, fisheries, animal husbandry, floriculture, horticulture, livestock, dairy and poultry industry;
TABLE
CERTIFICATE: It is certified that the description and quantity mentioned above are commensurate with the project requirement and that the same are not manufactured locally. It is further certified that the above items shall not be used for any other purpose.
Signature of Chief Executive, or
TABLE:
The person next in hierarchy duly
Authorized by the Chief Executive
Name______________
C.N.I.C. No____________
Note:- In case of clearance through Pakistan Customs computerized System, the above information shall be furnished on line against a specific user I.D. and password obtained under section 155D of the Customs Act, 1969 (IV of 1969).
Explanation:-
Chief Executive means.-
1. owner of the firm, in case of sole proprietorship; or
2. Partner of firm having major share, in case of partnership firm; or
3. Chief Executive Officer or the Managing Director in case of limited company or multinational organization; or
4. Principal Officer in case of a foreign company.
TABLE:
CERTIFICATE: Before certifying the above-authorized officer of the Regulatory Authority shall ensure that the goods are genuine and bonafide requirement of the project and that the same are not manufactured locally.
Signature____________
Designation__________
NOTE: In case of clearance through Pakistan Customs Computerized System, the above information shall be furnished on line against a specific user I.D. and password obtained under section 155D of the Customs Act,1969(IV of 1969)
Part-II
Import of active Pharmaceutical Ingredients, Excepients/Chemicals, Drugs, Packing Materials/Raw Materials for Packing, Diagnostic Kits and Equipments, components and other goods
The imports under this part shall be subject to following conditions, namely:-
(i) The active pharmaceutical ingredients, Excepients /chemicals, packing material and raw material for packing shall be imported only for in-house use in the manufacture of specified pharmaceutical substances, as approved by the Drug Regulatory Agency of Pakistan.
(ii) The requirement for active pharmaceutical ingredients and Excepients/ chemicals, drugs as specified in Table A, B & C shall be determined by the Drug Regulatory Agency of Pakistan.
(iii) The requirement for packing materials/raw materials for packing, as specified in Table-D, shall be determined by input Output Coefficient Organization.
(iv) The designated/authorized representative person of Drug Regulatory Agency of Pakistan shall furnish all relevant information, as set out in this part, online to the Customs computerized system, accessed through the unique user identifier obtained under section 155 D of the Customs Act, 1969, along with the password thereof.
TABLE:
Part-III
Import of Raw Materials, Inputs for Poultry and Textile Sector and Other Goods.
The imports under this part shall be subject to following conditions, besides the conditions specified in the Table given below namely:-
(i) The designated/authorized person of the following Ministries, or as the case may be, companies shall furnish all relevant information as detailed in the table below on line to the Customs Computerized System, accessed through the unique users identifier obtained under section 155D of the customs Act,1969, along with the password thereof, namely:-
(a) Ministry of Industries, Production and Special Initiatives, in case of imported goods specified against serial numbers 19 of Table;
(b) M/s Lotte Chemical Pakistan Ltd, in case of imported goods specified against serial number 20 of Table;
(c) Ministry of Live Stock and Dairy Development, in case of goods, specified against serial number 12 of Table.
(ii) The importer shall file the Goods Declaration online through Pakistan Customs Computerized System where Operational, and through a normal hard copy in the Collectorates/Custom-stations, in which the Pakistan Customs computerized system is not operational as yet.
(iii) In already computerized Collectorates and Custom-stations were the customs Computerized System is not yet operational, the Director Reforms and Automation or any other authorized officer shall feed the requisite information about clearance/release of goods under this notification in the customs Computerized System on daily basis, and the data obtained from the Custom-stations, which have not yet been computerized, on weekly basis.
TABLE:
KARAMAT HUSSAIN NIAZI
Secretary

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