Download - Budget 2012 Fac
-
8/12/2019 Budget 2012 Fac
1/25
i
TABLE OF CONTENTS
INCOME TAX
S. No Page No
1 Taxation of Salaried & Non Salaried Individuals & Association of
Persons1
2 Provision of taxability of profit on loan to employee by an employer
amended2
3 Rate of initial depreciation on building reduced 2
4 Gain on sale of immovable property within two years of purchase no
more exempt from tax3
5 Capital Gains on Disposal of Listed Securities 3
6 Compensation on delayed refund of any tax to be treated as income
from other sources5
7 Increase in limit for tax credit on investment in shares & on insurance 5
8 Tax credit on investment in plant & machinery 5
9 Tax credit for newly established undertaking 7
10 Corporate dairy farming also entitle for tax credit 7
11 Provisions for tax credit to industrial undertaking established before
01stJuly 2011 changed8
12 Rate of minimum tax on retailers reduced 9
13 Increase in time period for issue of notice for deficiencies in the
return of income.9
14 Order passed Under Section 122-C can be amended 9
15 Additional commissioner can make enquiries while framing amended
assessment order under section 122(5A)9
16 Stay of demand by Commissioner Appeals & Tribunal InlandRevenue
10
-
8/12/2019 Budget 2012 Fac
2/25
ii
17 Certificate from commissioner required for reduced rate of tax at
import stage on import of raw material by the manufacturers10
18 Electronic media exempt from deduction of tax at source 10
19 Deduction of tax by manufacturer at the time of making sales 11
20 Income which falls under the final Tax Regime to be taxed as such
even no tax is deducted on such income.11
21 Importers, exporters & suppliers may opt out of final tax regime 11
22 No order for penalty is required if the taxpayer admits his default 12
23 Rate of default surcharge enhanced 12
24 No default surcharge to be levied if payment of tax due on the basis
of appeal order of the commissioner inland revenue is paid withintime allowed on the notice of demand
12
25 The daily Limit for deduction of tax on cash withdrawal enhanced 13
26 Rate of tax at the time of registration of new motor vehicle enhanced 13
27 First schedule 14
SALES TAX ACT, 1990
28 Assessment of tax and recovery of tax not levied or short-
levied or erroneously refunded
15
29 Supplies Against International Tender 15
30 Fifth Schedule 15
31 SROs 16
32 Notifications 16
-
8/12/2019 Budget 2012 Fac
3/25
1
NOTES ON THE FINANCE BILL 2012
INCOME TAX
Finance Bill 2012 proposes the following amendments in the Income Tax Ordinance 2001.
TAXATION OF SALARIED & NON SALARIED INDIVIDUALS & ASSOCIATON OF
PERSONS
The following amendments have been proposed for the purpose of taxation of Individuals,
Salaried as well as non Salaried, & Association of Persons:
Salaried Individuals
1. Basic exemption limit enhanced from Rs.350,000 to Rs.400,000
2. Table for rate of tax has been changed from slab rate to previous progressive tax rate.
3. Facility of marginal relief withdrawn.
Non Salaried Individual
1. Basic exemption limit enhanced from Rs.350,000 to Rs.400,000
2. Table for rate of tax has been changed from slab rate to previous progressive tax rate.
Association of Persons
1. Association of Persons will be allowed exemption upto Rs.400,000.
2. Rate of tax will be that which is applicable to non salaried individual instead of existing
25%.
-
8/12/2019 Budget 2012 Fac
4/25
2
PROVISION OF TAXABALITY OF PROFIT ON LOAN TO EMPLOYEE BY AN
EMPLOYER AMENDED
Section 13(7) & (14)
Following amendments has been proposed in the provisions of Income Tax Ordinance relating to
taxation of taxation of profit on loan received by an employee from his employer:
No tax to be charged on profit (interest) free loan from Employer to Employee where the
amount of loan does not exceed Rs. 500,000
Currently where an employee is provided loan by his employer either free of Profit (interest)
thereon or at the rate of Profit (interest) less than the bench mark rate prevailing, than the
employee was liable to include in his income, as perquisite, the amount of profit not paid on loan
or difference of the profit (interest) paid and the profit as per bench mark rate prevailingirrespective of the amount of loan taken. Now an amendment has been proposed whereby
according to which such non or short payment of Profit (interest) shall not be treated as
perquisites if the amount of loan does not exceed Rs.500,000.
Maximum rate of Profit (interest) on loan to Employee by an Employer not to exceed ten
percent per annum
The rate of Profit (Interest) on loan has been fixed at one percent above the rate applicable for
preceding year and there is no ceiling to this rate. Now an amendment has been proposed that the
rate of profit (interest) on loan shall not exceed ten percent per annum.
RATE OF INITIAL DEPRECIATION ON BUILDING REDUCED
Section 23 & Clause 1 of Part II of Third Schedule
Rate of initial Depreciation on building is proposed to be reduced from 50% to 25%.
-
8/12/2019 Budget 2012 Fac
5/25
-
8/12/2019 Budget 2012 Fac
6/25
4
a) mutual fund;
b) banking company, non-banking finance company and insurance company subject
to tax under the Fourth Schedule to the Ordinance;
c) modaraba;
d) Foreign institutional investor being a person registered with NCCPL as a foreign
institutional investor; and
e) Any other person or class of persons notified by the FBR;
(iii) By way of a special provision it has been prescribed that enquiries shall not be made
for the nature and source of the amount invested in companies listed at stock
exchanges till June 30, 2014 subject to following conditions:
a. amounts remain invested for 120 days;
b. tax on capital gains has been duly discharged in the manner prescribed; and
c. a statement of investments is filed with the return of total income/ wealth
statement; and
(iv) A person can opt out for payment of tax under Eighth Schedule by obtaining prior
approval of Commissioner Inland Revenue and filing of an irrevocable option with
NCCPL to this effect. In such an event, the person shall be subject to scheme of
taxation provided for in section 37A of the Ordinance. Further, tax rates earlier
prescribed on capital gains derived from disposal of securities have been proposed to
be revised/ reduced as follows:
Tax Year Persons other thaninsurance companies
Insurance companies
Holding period is
six months
or less
more than
six months
six months
or less
more than
six months2012 10.00% 8.00% 10.00% 8.00
2013 10.00% 8.00% 12.50% 8.50%
2014 10.00% 8.00% 15.00% 9.00%
2015 17.50% 9.50% 17.50% 9.00%
2016 * 10.00% * *
-
8/12/2019 Budget 2012 Fac
7/25
5
COMPENSATION ON DELAYED REFUND OF ANY TAX TO BE TREATED AS INCOME
FROM OTHER SOURCES
Section 39(1)(cc)
A new clause (cc) has been proposed to be inserted in sub section (1) of section 39, Income
from Other Sources. According to this propose amendment any compensation received by a
person on delayed refund of any tax shall be treated as Income under the head Other Sources.
This amendment appears to have been proposed to nullify the effect of judgment of the
Honorable Appellate Tribunal Inland Revenue holding that the compensation/ additional refund
received on delayed payment of refund of tax is not taxable.
Further, the rate of compensation/additional payment on delay refunds is proposed to be fixed at
15 per cent per annum instead of existing KIBOR per annum.
INCREASE IN LIMIT FOR TAX CREDIT ON INVESTMENT IN SHARES & ON
INSURANCE
Section 62(2)
The following amendments has been proposed in the provisions of section 62 dealing with
entitlement of a person for tax credit on investment in shares or on payment of Insurance
premium during a tax year:
1- The maximum limit for investment in shares or on payment of Insurance premium is
proposed to be enhanced to twenty percent of the taxable income of the person or
Rs.1,000,000 whichever is less from existing fifteen percent of the taxable income of the
person or Rs.500,000 whichever is less.
2- The condition for holding of shares on which tax credit claimed is proposed to be reduced
from thirty six to twenty four months.
TAX CREDIT ON INVESTMENT IN PLANT & MACHINERY
Section 65B
This section provides for incentive to companies to invest in Balancing, Modernization &
Replacement of the Plant & Machinery already installed. This incentive is in the shape of tax
credit @10% on the tax payable by the Company in the year of such investment. However this
-
8/12/2019 Budget 2012 Fac
8/25
6
incentive is available only to those Companies who made this investment during the period from
01stday of July 2010 to 30th June 2015. Now, through the Finance Act 2012 the scope of this
section has been enlarged by enhancing the rate of tax credit under different condition with scope
of its benefit. The amendments proposed are as under:
Tax credit allowable against payment of Minimum Tax u/s. 113 & under Final Tax Regime
Section 65B (1)
For Companies who purchased & installed Plant & Machinery for balancing, modernization &
replacement of its existing Plant & Machinery during the period from 01stday of July 2010 to
30th
June 2015 shall be entitle for tax credit @10% of the amount invested in the year of
purchase & installation of such machinery even if the Company pays minimum tax or tax under
the Final Tax Regime.
Tax Credit on investment made during the period from 01stJuly 2011 to 30
thJune 2016
Section 65B (4)
A new sub section (4) has been inserted in section 65B of the Income Tax Ordinance 2001 for
tax credit on investment in Plant & Machinery for balancing, modernization & replacement of
the existing Plant & Machinery already installed. The salient features are as under:
i. Company availing this credit must be setup before 01st
July 2011.
ii. Investment in Plant & Machinery for the purpose of its Balancing, Modernization &
Replacement must be made between the periods from 01stJuly 2011 to 30thJune 2016.
iii. Tax credit @20% will be allowed, in the tax year in which such plant & machinery was
installed, against tax payable by the Company including minimum tax u/s. 113 & tax
under the Final Tax Regime.
-
8/12/2019 Budget 2012 Fac
9/25
7
Carryover of Tax Credit
Section 65B (5)
As per the provision of newly inserted sub section (5) , if there is no tax payable or the tax
payable is less than tax credit allowable under sub sections (1)& (4) of the said section than the
said excess tax credit shall be carried over to succeeding tax years as per the following:
(1) Tax credit allowed @10% Two succeeding tax years
(2) Tax credit allowed @ 20% Five succeeding tax years
TAX CREDIT FOR NEWLY ESTABLISHED UNDERTAKING
Section 65D
This scheme of investment incentive was introduced through the Finance Act 2011.Now through
the Finance Act 2012 following further amendment has been proposed:
Corporate Dairy Farming also entitle for tax credit
Section 65D (1)
It is also proposed to enhance the scope of industrial undertaking eligible for tax credit to include
corporate dairy farming.
Tax Credit can be claimed where a company pays minimum tax or tax paid under FTR.
Section 65D(1)
It is now proposed to extend the scope of tax credit against minimum tax and tax under FTR
under any provision of the Ordinance. Previously, such credit was deemed to be available against
the tax payable under the normal regime only.
Equity to be raised through cash only
Section 65D (2)
Further, to avail tax credit the industrial undertaking is required to be an equity based project
which has been defined to mean a project setup with 100 per cent equity raised through issuance
of new shares for cash consideration.
-
8/12/2019 Budget 2012 Fac
10/25
8
No disqualification if Short term loan & finances availed for working capital purpose only
Section 65D(2)
However, the short term loans and finances obtained from banking companies or non-banking
financial institutions for working capital requirements shall not disqualify the taxpayer from the
claim of tax credit.
An industrial undertaking when deemed to be setup
Section 65D (5)
For the purposes of claim of tax credits under sections 65B, 65D and 65E, an industrial
undertaking shall be treated to have been setup on the date on which the industrial undertaking is
ready to go into production, whether trial production or commercial production.
PROVISIONS FOR TAX CREDIT TO INDUSTRIAL UNDERTAKING ESTABLISHED
BEFORE 01ST
JULY 2011 CHANGED
Section 65E
The existing provisions of section 65E provides for tax credit to industrial undertaking
established before 01st July 2011 for equity investment in Balancing, Modernization &
Replacement or expansion of plant & machinery already installed. Now, the Finance Act 2012
proposes to replace the existing provision with new provisions. The salient features of the same
are as under:
Tax credit for expansion of the existing Plant & Machinery or for the new project
As per the provision proposed now, the industrial undertaking or Corporate Farming Company
established before 01stJuly 2011 will only be entitle for tax credit on expansion of the existing
Plant & Machinery or on investment in new project if the same is made through injection of new
equity raised through issuance of new shares.
Tax credit will be allowed for five years
Tax credit will be allowed for five years from the date of setting up or commencement of
commercial production from the new plant or expansion project whichever is later.
-
8/12/2019 Budget 2012 Fac
11/25
9
New Equity must be through cash only
The term new equity means equity raised through fresh issue of shares against cash and shall not
include loans obtained from Shareholders or Directors.
RATE OF MINIMUM TAX ON RETAILERS REDUCED
Section 113A & Division IA of Part I of First Schedule
The rate of minimum tax on retailers reduced to 0.5% from 1%.
INCREASE IN TIME PERIOD FOR ISSUE OF NOTICE FOR DEFICIENCIES IN THE
RETURN OF INCOME FILED
Section 120(3) & (6)
As per the existing provision of sub section 6 of section 120 an Officer of Inland Revenue cannot
issue notice to the tax payer for deficiencies in the return of income filed beyond the end of the
financial year in which the return of income is filed. Now this period has been proposed to be
enhanced by 180 days. Hence after this amendment the Officer Inland Revenue can issue notice
even 180 days after the end of the financial year in which the return was filed.
ORDER PASSED UNDER SECTION 122-C CAN BE AMENDED
Section 122(1)
Currently the provisional assessment order passed u/s. 122C cannot be amended under the
provisions of section 122 of the Income Tax Ord. 2001. Now an amendment has been made in
section 122(1), according to which now an order passed u/s. 122C can be amended under section
122..
ADDITIONAL COMMISSIONER CAN MAKE ENQUIRIES WHILE FRAMING
AMENDED ASSESSMENT ORDER
Section 122(5A)
The provisions of section 66A of the Repealed Income Tax Ordinance 1979 allowed the
Inspecting Additional Commissioner to make such enquiries as he deems fit while framing the
order under said section. Section 122(5A) of the Income Tax Ordinance 2001 does not empowers
the Additional Commissioner to do so, hence all such orders passed under section 122(5A) in
-
8/12/2019 Budget 2012 Fac
12/25
10
which enquiries were made by the Assessing Officer were annulled by the Appellate Authorities.
In order to cover this shortcoming an amendment has been made in section 122(5A) according to
which now the Assessing Officer can make enquiries as he deems fit during the proceedings
under section 122(5A).
STAY OF DEMAND BY COMMISSIONER APPEALS & TRIBUNAL INLAND REVENUE
Section 128(1A) & Proviso in Section 131(5)
A new sub section 1A has been inserted in section 128 and a proviso substituting the existing
first, second, & third proviso in section 131(5) according to which:
1- Commissioner Appeals to provide an opportunity of being heard to the Commissioner
Inland Revenue against whom the appeal has been filed before granting stay against
recovery of demand on application made by the taxpayer.
2- Commissioner Appeals cannot grant stay of demand for more than thirty days in
aggregate.
3- Appellate Tribunal Inland Revenue to grant stay from recovery of demand for the period
not exceeding 180 days.
CERTIFICATE FROM COMMISSIONER REQUIRED FOR REDUCED RATE OF TAX
AT IMPORT STAGE ON IMPORT OF RAW MATERIAL BY THE MANUFACTURERS
Section 148 & Proviso to Clause 9A of Part II of the Second Schedule
Currently clause 9A of Part II of the Second Schedule provides for reduce rate of tax @3% on
import of raw material by the manufacturers. Now a proviso has been added to the said clause
according to which the manufacturers importing their raw material for own use are required to
obtain certificate of reduced rate of tax from the Commissioner.
ELECTRONIC MEDIA EXEMPT FROM DEDUCTION OF TAX AT SOURCE
Sec. 153 & Clause (16A) of Part IV of Second Schedule
Currently only print media services are exempt from deduction of tax at Source. Now it is
proposed to enlarge the scope of exemption to cover electronic media also. Hence now no tax
will be deducted from services rendered by radio & TV channels.
-
8/12/2019 Budget 2012 Fac
13/25
11
DEDUCTION OF TAX BY MANUFACTURER AT THE TIME OF MAKING SALES
Section 153A
The existing section 153A is proposed to be replaced by a new provision according to which
every manufacturer at the time of making sale to distributor, dealer & wholesaler shall collect tax
at the rate of 1% of the gross amount of sales. Under the scheme of withholding of tax at source
currently in vogue, the person making payment is under obligation to deduct tax at the time of
making the payment. But through this newly inserted section surprisingly the person receiving
the payment has been made the deduct tax. we wonder how in a society where recipient of
payment is not ready to have the rightful tax deduct from his payments a seller who is at the
receiving end would be able to force the buyer to pay the 1% of the invoice value proposed in
this provision? The proposed amendment seems to be extremely difficult proposition.
INCOME WHICH FALLS UNDER THE FINAL TAX REGIME TO BE TAXED AS SUCH
EVEN NO TAX IS DEDUCTED ON SUCH INCOME.
Section 169(2)(f)
Currently in all the provisions of the Ordinance, relating to the income covered under Final Tax
Regime, use the term tax deducted. Due to this term it is interpreted that only those income
will be taxed under FTR which tax has actually been deducted. Hence income which are liable
for deduction of tax but not deducted were not used to be cover under FTR. Now it has been
proposed that the term deducted wherever occurring may be replaced with the term
deductible Hence after this amendment every income under FTR on which tax deducted or not
deducted has to be taxed as FTR income.
IMPORTERS, EXPORTERS & SUPPLIERS MAY OPT OUT OF FINAL TAX REGIME
Section 169 & Clauses 41(A),(AA) & (AAA) of Part IV of the Second Schedule
An option is proposed to be given to Importers, Exporters & Suppliers who falls under the Final
Tax Regime to opt out of the said regime with a condition that the tax offered under normal law
shall not be less than a certain amount of tax already deducted at source. The minimum
percentage of tax in each class of taxpayer is as under:
Class of Taxpayer Minimum Tax not less than
Importer 60% of Tax Deducted
Exporter 50% of Tax Deducted
Supplier 70% of Tax Deducted
-
8/12/2019 Budget 2012 Fac
14/25
12
NO ORDER FOR PENALTY IS REQUIRED IF THE TAXPAYER ADMITS HIS DEFAULT
Section 182 (2) Proviso
As per the existing provisions of section 182 a penalty is payable only on the basis of order
passed by the Commissioner. Now an amendment has been proposed according to which where a
taxpayer found himself in default which attracts penalty under the provision of section 182, than
he can make the voluntary payment of penalty without an order passed against him.
RATE OF DEFAULT SURCHARGE ENHANCED
Section 205
The Finance Act 2012 has proposed to increase the rate of default surcharge under section 205
from existing KIBOR plus 3% (App. 16%) per quarter to 18% per annum.The default surchargeis liable to be paid where there is a non or short payment of any tax required to be paid under
the various provisions of the Ordinance.
NO DEFAULT SURCHARGE TO BE LEVIED IF PAYMENT OF TAX DUE ON THE
BASIS OF APPEAL ORDER OF THE COMMISSIONER INLAND REVENUE IS PAID
WITHIN TIME ALLOWED ON THE NOTICE OF DEMAND
Proviso to Section 205(1) & (3)
Two provisos been inserted in section 205(1) & (3) of the Income Tax Ordinance2001.According to which, if a taxpayer decided, not to file appeal with the Appellate Tribunal
against the order of the Commissioner Appeal passed on the basis of Appeal filed against any
order passed by an Assessing Officer and makes the payment of the tax due on the basis of
Appeal order within the time allowed in the notice of demand of the order giving effect of the
decision of the Commissioner Appeal , than he will not be liable for any default surcharge for
nonpayment of tax on the basis of original assessment order till the date of payment.
-
8/12/2019 Budget 2012 Fac
15/25
13
THE DAILY LIMIT FOR DEDUCTION OF TAX ON CASH WITHDRAWAL ENHANCED
Section 231A
The limit for deduction of tax on cash withdrawal is proposed to be enhanced from existing
Rs.25,000 to Rs.50,000 per day.
RATE OF TAX AT THE TIME OF REGISTRATION OF NEW MOTOR VEHICLE
ENHANCED
Section 231 B
The rate of tax at the time of registration of new motor vehicles with engine capacity between
1300 to 1600 cc is proposed to be increased from Rs.16,875 to Rs.25,000. Interestingly rate of
tax for registration of motor vehicle with 1600 to 1800cc remains the same at Rs.22,500.
-
8/12/2019 Budget 2012 Fac
16/25
14
FIRST SCHEDULE
1. Rate of Tax for Non Salaried Individuals.The following are the new rate of Tax for non salaried individuals and Associated of Persons.
S.No. Taxable Income. Rate of Tax
1. Where taxable income does not exceed Rs.400,000 0%
2. Where the taxable income exceeds Rs.400,000 but does notexceed Rs.750,000
10% of the amountexceeding Rs.400,000
3. Where the taxable income exceeds Rs.750,000 but does notexceed Rs.1,500,000
Rs. 35,000 + 15% ofthe amount exceedingRs. 750,000
4. Where the taxable income exceeds Rs.1,500,000 but doesnot exceed Rs.2,500,000
Rs. 147,500 +20% ofthe amount exceedingRs. 1,500,000.
5. Where the taxable income exceeds Rs.2,500,000 Rs. 347,500 + 25% ofthe amount exceedingRs. 2,500,000
2. Rate of Tax for Salaried Individuals.Following is the new rate of Tax for deduction from salaries for Tax year 2013.
S.No. Taxable Income. Rate of tax.
1. Where the taxable income does not exceed Rs.400,000, 0%
2. Where the taxable income exceeds Rs.400,000 but does notexceed Rs.750,000,
5% of the amountexceeding Rs. 400,000
3. Where the taxable income exceeds Rs.750,000 but does notexceed Rs.1,500,000,
Rs. 17,500 + 10% of theamount exceedingRs. 750,000
4. Where the taxable income exceeds Rs.1,500,000 but does notexceed Rs.2,500,000,
Rs. 92,500 + 15% of theamount exceedingRs. 1,500,000
5. Where the taxable income exceeds Rs.2, 500,000. Rs. 242,500 +20% of theamount exceedingRs. 2,500,000
-
8/12/2019 Budget 2012 Fac
17/25
15
SALES TAX ACT, 1990
Following amendment has been proposed in the Sales Tax Act, 1990 with effect from 1stJuly,
2012 and as date mentioned in the provisions or schedule as below;
ASSESSMENT OF TAX AND RECOVERY OF TAX NOT LEVIED OR SHORT-
LEVIED OR ERRONEOUSLY REFUNDED.
Section. 11
It is proposed to consolidate Section 11 and Section 36 of the Act for smooth assessment
proceeding. It is proposed to made the following further amendments in snow consolidated
section 11 of the Act:
1- Time limit for passing an order on account of inadvertence, error or misconstruction has
been enhanced from 3 years to 5 years.
2- . An order on the basis of a show cause notice is required to be passed within 120 days
from the date of issuance of the show cause notice.
3- The power of Commissioner to extend the limit for passing an order on the basis of show
cause notice has been extended from 60 days to 90 days.
SUPPLIES AGAINST INTERNATIONAL TENDER
Fifth Schedule of The Sales Tax Act & Rule 50A, 50B and 50C of Sales Rules, 2006
It is proposed to made supplies against International Tender exempt from Sales Tax instead of
zero rated. Hence the following amendments are proposed:
In Fifth Schedule:-
As supplies against international tender is currently zero rated hence classified in Fifth Schedule
of the Sales Tax Act. It is proposed to amend the Fifth Schedule of the Act by deleting the same
from Fifth Schedule. Hence the same is added in the list in Sixth Schedule. After this proposed
amendment - no input sales tax will be available to a person for supplies against International
tenders.
-
8/12/2019 Budget 2012 Fac
18/25
16
SRO 555(I)/2008 dated 11th
June 2008
This SRO have been rescinded to withdraw exemption from Sales Tax on import of rawmaterial for manufacturing of goods for supply against international tender.
Rule 50A, 50B and 50C of Sales Rules, 2006
These rules has also been proposed to be amended and wherever there is term zero rated used in
these rules the same has been replaced with the term exempt to give effect of supplies made
against International Tender transfer from zero rated to exempt supplies.
NOTIFICATIONS
Sales Tax Rules, 2006 amendment made by SRO 589(I)/2012 dated June 1, 2012 with effect
from June 2, 2012;
In Rule 5 of the rules for Registration, Compulsory Registration and Deregistration;- It is
proposed to insert new proviso to empower board to change the jurisdiction of the case of the
registered person according to its place of business, registered office or location of
manufacturing unit.
in rule 7 for Change in Particulars of Registration:- The new sub Rule inserted for purpose to
outline the verification of particulars in case of change in nature of business i.e. the change of
ownership from individual to individual or AOP or corporate persons.
(4) The change of nature of business (e.g. from individual to AOP or
corporate person) shall be allowed as under, namely:-
(i) in case of transfer of individual business from any person to his
spouses or children, the change shall be made by LRO on receipt of
verification of documents from RTO;
(ii) in case of change in nature of business from individual to AOP,
the change shall be made by LRO on receipt of verification of
documents from RTO;
-
8/12/2019 Budget 2012 Fac
19/25
17
(iii) in case of change of nature of business from AOP to corporate
entity, the same shall only be allowed by LRO on receipt of verification
from RTO or LTU, however, this change shall only be allowed in
cases where the same persons who are members of AOP are
nominated as directors in the corporate entity; and
(iv) in case of transfer of business or change in nature on any other
account, a new Sales Tax Registration Number shall be issued to the
entity.
Rule 12 Blacklisting and Suspension of Registration:- This rule provides the procedure of
blacklisting and suspension of registration, after amendment, the Board has been empowered to
make procedure to be followed for suspension or blacklisting of registered person.
Rule 46 Procedure and Conditions for making zero rated supplies in case of international
tender for Afghan Refugees:-As the supplies against the international tender is no more zero
rated, hence, reference to section and schedule of zero rated supplies removes from this rule.
In rule 50A, 50B and 50C Supplies against International Tender:-These rules revamped to
give effect of supplies made against International Tender transfer from zero rated supplies to
exempted supplies.
SRO 1020(I)/2006 for fixation of minimum value addition on Computer Hardware/Parts
amended by SRO 590(I)/2012 dated June 1, 2012 with effect from June 2, 2012:- After
amended the minimum value addition on Commercial Importer of Computer Hardware/parts has
been deleted, now they have to pay sales tax under Special Procedure for Payment of Sales by
Importer.
SRO 811(I)/2009 dated 19th September 2009 for zero rated supply of Polyethylene and
polypropylene amended by SRO 591(I).2012 dated June 1, 2012 with effect from June 2,
2012:- Import and supply of Polyethylene and polypropylene was zero rated subject the
conditions. Now through amendment the zero rated supply of Polyethylene and polypropylene
becomes exemption from sales tax.
-
8/12/2019 Budget 2012 Fac
20/25
18
Sales Tax Special Procedure Rules, 2007 amended by SRO 592(I)/2012 dated June 1, 2012
with effect from June 2, 2012;
58E Audit of Commercial Audit:-Rule 58E was inserted to exclude the commercial importers
from audit of their sales tax record, however, after amendment, the Commercial Importers are
not subject to Audit.
Special Procedure Rules, 2007 for Steel Melters, Re-rollers and Ship Breakers amended by
SRO 592(I)/2012 dated June 1, 2012 with effect from June 2, 2012:-
Following is amendment made in the Special Procedure Rules, 2007;
Rule 58H:- Payment of Tax
Rate of sales tax per unit electricity consumed increased from Rs. 6/- to Rs. 8/-.
Ship breakers will pay now Rs. 6,700 per metric ton of re-rollable scrap
previously it was Rs. 4, 448/-. Ship breakers also have to submit post dated
cheques to concerned RTO or LTU of amount equivalent of sales tax calculated
under this Special Procedure as per following;
Ships Weighing upto 10,000
LDT
Four post dated Cheques equal to
1/4th
of total sales tax payable
Shiips weighing over
10,000 LDT
Eight post dated Cheques equal to
1/8thof total sales tax payable
If the ship breaker default in making payment of sales tax with return, the RTO or
LTU will encashed those cheques otherwise it will be return to ship breakers on
payment of sales tax with return.
Rule 58Ha Steel melters and Re-rollers operating on self-generation basis
After amendment, operating on self generation basis require permission by the
Chief Commissioner, gas distribution companies or Oil and Gas Regulatory
Authority or any other Government authority.
-
8/12/2019 Budget 2012 Fac
21/25
19
Steel melters will pay sales tax Rs. 1,900 per HM3, previously was Rs. 1,392.
Re-rolling mills now have to pay Rs. 51,822/- per mill size in inches, previously it
was Rs. 38,964/-
Rule 58I Invoices and returns:-
After amendment, invoices will show the following amount of sales tax per metricton.
Sub
Rule
Description New
Rate Rs.
Old
Rate
Rs.
1. Sales Tax Invoice issued from Steel Melters to re-rollers 7,349/- 5,526/-
2. Re-rollers using ingots or billets 8,387/- 5,960/-3. Re-rolles using billets of PASMIC or Heavy Mechanical
Complex or peoples Steel Mills or imported billets
9,651/- 7,308/-
4. Re-rollers using ship plates and re-rollable scrap 7,740/- 5,628/-
5. Steel re-rollers sales to un-registered persons 1,040/- 780/-
6. Persons supplying imported MS products to registered
persons
Persons supplying imported MS products to un-registered
persons
9,651-
1,040/-
7,308/-
780/-
Rule 58K Values of steel products:-Following value is revised for the purpose of sales tax.
S. No Description HS Code New Rte Old Rate
(1) (2) (3) (4) (5)
1 Billets supplied byPakistan Steel Mills, HeavyMechanical Complex and
Peoples Steel Mills
Respective
heading
Rs. 54,264/- PMT Rs. 40,800
2. Imported billets --do-- US$ 585 PMT US $ 440
3. Re-rollable scrap suppliedby ship breakers
--do-- Rs. 42,188/- PMT Rs. 30,300
-
8/12/2019 Budget 2012 Fac
22/25
20
Rule 58MA Option to pay sales tax on ad valorem basis:-
Sub-rule 1 :-Following is amended in sub-clause of this rule;
a) Before this amendment, registered person who opt this option remain in forcetill the end of financial year, however, this condition is deleted after
amendment.
b) Previously the registered persons not to be charged Rs. 6 per unit onelectricity bill under rule 58H, however, after amendment, registered persons
who opt to pay sales tax on ad valorem basis is to pay sales tax on electricity
unit billed at rate of Rs. 8/- per unit through electricity bill, however, the same
is adjustable as input tax against the liability of sales tax determined on ad
valorem basis at rate specified in sub-section 1 of section 3 of the Sales Tax
Act, 1990.
Sub-Rule 2:- Previously, no specific condition of audit of the registered persons,
however, they were not, after amendment, registered persons who opt to pay sales
on ad valorem basis are subject to periodical audit.
Rule 58MB Treatment for unites engaged in exports:-
This new rule inserted whereas with permission of commissioner, registered
persons exporting more than fifty percent of their production are not subject to
pay sales tax with the electricity bill under sub-rule (1) of the rule 58H.
SRO 1125(I)/2011 dated 31st December 2011 for zero rated supply of Textile and other
goods amended by SRO 593(I).2012 dated June 1, 2012 with effect from June 2, 2012:- This
amendment is to exclude only monofilament which of more than 67 decitex from zero rated
regime.
-
8/12/2019 Budget 2012 Fac
23/25
21
SRO 644(I)/2007 Srws 27th
June 2007 rescind by SRO 594(I)/2012 dated June 1, 2012 with
effect from June 2, 2012;
SRO 644(I)/2007 was issued to levy sale tax rate more than 16%, however, after rescind of this
SRO, sales tax rate on all the taxable goods as listed in SRO 644(I)/2007 become uniformed i.e.
16% with effect from June 2, 2012.
The Section 8B were not applicable on consumer of goods chargeable at higher rate of sales
under SRO 644(I)/2007. After rescind the said SRO, the manufacturer of consumer of goods
listed in said SRO, would now have to restrict the claim of input tax during a tax period to 90%
of output tax.
SRO 551(I)/2008 dated 11th
June, 2008 for exemption of raw material and others amended
by SRO 595(I).2012 dated June 1, 2012 with effect from June 2, 2012:- This amendment is to
include the following goods in the list of exempted goods;
S. No. Description of Goods Conditions and Restriction
30 Waste Paper Supplies thereof
31 Remeltable Scrap (PCT heading 72.04) Import and supplies thereof
32 (i) Sprinkler equipment
(ii)Drip Equipment
(iii)Spray pumps and nozzles
Supplies thereof
SRO 308(I)/2008 dated 24th
March, 2008 for repayment of sales tax on export of steel
product paid according the Special Procedure of Steel amended by SRO 596(I).2012 dated
June 1, 2012 with effect from June 2, 2012:- This amendment is to repay the sales tax paid on
export of steel product and the rate prescribed in table below is applicable on invoices issued on
or after June 2, 2012.
-
8/12/2019 Budget 2012 Fac
24/25
22
S. No Description Repayment-cum-Drawback rate
(1) (2) (3)
For export made against invoicesissued from the 2nd June, 2012.
1 Ingots or billets other than imported or of
Pakistan Steel Mills or Peoples Steel Mills. Rs. 7,349 per metric ton
2 Mild steel re-rolled products manufactured fromingots and billets other than imported or PakistanSteel Mills or of People Steel Mills
Rs. 8,387 per metric ton
3 Mild steel re-rolled products manufactured fromimported billets or billets of Pakistan Steel Millsor People Steel Mills
Rs. 9,651 per metric ton
SRO 345(I)/2010 dated 24th
May, 2010 for fixation of valuation of locally produced ingots
and billets for registered person paying sales tax on ad volorem basis amended by SRO
597(I).2012 dated June 1, 2012 with effect from June 2, 2012:- This amendment is raise the
fixation of minimum valuation of steel products for the registered person who pay sales tax on ad
volorem basis, following is the new value;
S. No. Goods Value
1. Billets Rs. 65.000
2. Ingots Rs. 60,000
SRO 549(I)/2008 dated 11thJune, 2008 Zero rated supplies amended by SRO 602(I).2012
dated June 1, 2012 with effect from June 2, 2012:- This amendment is made to give effect of
transfer exempted goods into zero rated goods and vice versa; following are list of goods
included and excluded from zero rates sales tax supplies;
S. No. Description of Goods Remarks
1. Cotton Seeds Oil Included in zero rated goods and same is
zero rated if supplied to registered
manufacturer of ghee and cocking oil.2. Remeltable Scrap (PCT heading 72.04) Deleted from Zero rated and included in
exempted goods
3. (i) Sprinkler equipment(ii)Drip Equipment(iii)Spray pumps and nozzles
Deleted from Zero rated and included in
exempted goods
-
8/12/2019 Budget 2012 Fac
25/25
23
SRO 313(I)/2006 dated 31stMarch, 2006 fixation of sales tax rate on import of soyabean
seeds amended by SRO 604(I).2012 dated June 1, 2012 with effect from June 2, 2012:- This
amendment is made to reduce the rate of sales tax from seven to sex percent of the value onimport of soyabean seeds by solvent extraction industries.
SRO 69(I)/2006 dated 28th
January, 2006 fixation of sales tax rate on import of specific
goods amended by SRO 605(I).2012 dated June 1, 2012 with effect from June 2, 2012:- This
amendment is made to reduce the rate of sales tax from fifteen to fourteen percent of the value on
import of rapeseed, sunflower seed and canola seed by solvent extraction industries.