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Finance Act, 2025, as published 2025

This is the Finance Act, 2025, as published by the Federal Board of Revenue in 2025. It runs to 292 pages and contains 18 sections.

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1. Short title and commencement

(1) This Act shall be called the Finance Act, 2025.

(2) It shall, unless otherwise provided, come into force on the first day of July, 2025.

(1) This Act shall be called the Digital Presence Proceeds Tax Act, 2025.

(2) It shall come into force at once.

(1) This Act shall be called the New Energy Vehicles Adoption Levy Act, 2025.

(2) It extends to the whole of Pakistan.

(3) It shall come into force at once.

2. Amendment in the Stamp Act, 1899 (II of 1899)

In the Stamp Act, 1899 (II of 1899) to the extent of the Islamabad Capital Territory, in Schedule I, for Article 23, the following shall be substituted, namely:-

“23. On conveyance as defined under clause (10) of section 2 not being a transfer charged or exempted under Article 62, the stamp duty shall be levied at one percent of the value of the immovable property.”.

In this Act, unless there is anything repugnant in the subject or context, -

(a) “Authority” means the Commissioner Inland Revenue who has been assigned jurisdiction for the purposes of this Act by the Federal Board of Revenue;

(b) “Board” means the Central Board of Revenue established under the Central Board of Revenue Act, 1924 (IV of 1924), and on the commencement of Federal Board of Revenue Act, 2007, the Federal Board of Revenue established under section 3 thereof and includes a Member of the Federal Board of Revenue to whom powers of the

Board have been delegated under section 8 of the Federal Board of Revenue Act, 2007;

(c) “digitally delivered services” means any service delivered over the internet or electronic networks, where the delivery is automated and required minimal or no human intervention including music, audio and video streaming services, cloud services, online software application services, services delivered through online inter-personal interaction i.e. tele-medicine, e-learning etc., online banking services, architectural design services, research and consultancy reports, accounting services in the form of digital files or any other online facility;

(d) “e-commerce” means sale or purchase of goods and services conducted over computer networks by methods specifically designed for the purpose of receiving or placing of orders either through websites, mobile applications or online marketplace having digital ordering features by using either mobile phones or automated computer-to-computer ordering system;

(e) “e-store” means the online platform including websites and software applications used to conduct e-commerce, which involves buying and selling goods or services including digital products, through electronic transactions over the internet or other computer networks;

(f) “online marketplace” means Online interfaces that facilitate, for a fee, the direct interaction between multiple buyers and multiple sellers for digital orders for supply of goods and services, without the platform taking economic ownership of the goods or rendering the services that are being sold; and

(g) “payment Intermediary” means any third part entity including a banking company, financial institution, a licensed foreign exchange company or payments gateway that facilitate the transfer of funds or payment instructions between two or more parties to enable, process, route or settle payments in a financial transaction, without being the ultimate source or recipient of the payment.

Chapter II - Chargeability and Scope

In this Act, unless there is anything repugnant in the subject or context.-

(a) “bus” includes a motor vehicle designed or adapted to carry more than ten passengers at a time, in addition to the driver, whether for hire or otherwise, and includes a van, mini-bus and coaster;

(b) “division concerned” means the division to which business of this Act stands allocated;

(c) “internal combustion engine motor vehicle” means a motor vehicle powered wholly or partially by fossil fuels including petrol, diesel, compressed natural gas or liquefied petroleum gas;

(d) “levy” means the new energy vehicle adoption levy imposed and collected under this Act;

(e) “manufacturer” means a person carrying out the business of assembly, manufacture, fabrication or production of motor vehicles in Pakistan;

(f) “motor vehicle” means a vehicle propelled mechanically, electrically or other zero emission based technology either

partially or completely, adapted for use upon roads and includes motorcycles, rickshaws, cars, vans, SUVs, Jeeps, sedans, sub-urban vehicles, buses, loaders, and trucks;

(g) new energy motor vehicle’ means a motor vehicle that is powered-

(i) exclusively by an electric motor run on a rechargeable battery; or

(ii) by both an electric motor run on a rechargeable battery and an internal combustion engine, capable of achieving a range of no less than fifty kilometers under normal conditions exclusively running on electric motor by a single battery charge; or

(iii) hydrogen fuel cells or any other technology that produces zero tailpipe emission; and

(h) “truck” means a motor vehicle designed or adapted primarily for the carriage of goods or materials, having a payload capacity exceeding fifteen hundred kilograms and includes a rigid or articulated truck, loader, delivery van, pickup and any other vehicle equipped with a goods-carrying body or container.

3. Amendment in the Petroleum Products (Petroleum Levy) Ordinance, 1961 (XXV of 1961)

In the Petroleum Products (Petroleum Levy) Ordinance, 1961 (XXV of 1961), the following further amendments shall be made, namely:-

(1) after the words “Petroleum Levy”, wherever occurring, the words “and Climate Support Levy” shall be inserted;

(2) in section 3,-

(a) in sub-section (1), for the words “rate as may” the words “rates as may respectively” shall be substituted; and

(b) after sub-section (3), the following new sub-section (4) shall be added, namely:-

“(4) A Climate Support Levy shall be levied at the rate of two rupees and fifty paisa (Rs. 2.5) per liter on Motor Spirit and High Speed Diesel for Financial Year 2025-26, which shall be enhanced to five rupees per liter for Financial Year 2026-27. The Climate Support Levy on Furnace Oil shall be levied at the rate of two rupees and fifty paisa (Rs. 2.5) per liter (Rs. 2,665/MT) for Financial Year 2025-26, which shall be enhanced to five rupees per liter for Financial Year 2026-27 in addition to the Petroleum Levy at the rate notified by the Federal Government from time to time.”;

(3) in section 7, for the expression “Except for the Fifth Schedule, the”, the word “The” shall be substituted;

(4) in the First Schedule, in column (1), after S. No. 25 and the entries relating thereto in columns (2) and (3), the following new S. No. and the entries relating thereto shall be added, namely:-

“26. Furnace Oil Bunker ‘C’.”; and

(5) the Fifth Schedule shall be omitted.

(1) Every foreign vendor having significant digital presence in Pakistan shall be charged to Digital

Presence Proceeds Tax on proceeds of every supply made from outside Pakistan of digitally ordered services or goods irrespective of whether delivered digitally or physically.

(2) The tax under sub-section (1) shall be charged at the rate provided in the Schedule of this Act.

(3) Proceeds of foreign vendors are attributable to Pakistani users based on their significant digital presence in Pakistan as provided in section 4 of this Act, where-

(i) the transaction is carried out through foreign online marketplace or e-store;

(ii) they arise in connection with digitally ordered services and goods; and

(iii) a Pakistani user is a party to the transaction.

(4) Any reference to a Pakistani user, in relation to this Act means any user who is reasonable to assume -

(a) in the case of an individual, is normally resides in Pakistan;

(b) in the case of a company, is established or have permanent establishment in Pakistan; and

(5) This section shall not apply to any payment for -

(a) digitally ordered goods where such payment is effectively connected with a branch office of foreign vendor in Pakistan of the non-resident person and the goods are supplied from within Pakistan; and

(b) digitally delivered services where such services giving rise to the payment are received in Pakistan and are rendered through a branch office of foreign vendor in Pakistan of the non-resident person.

(1) Subject to the provision of sub-section (3), there stand imposed a levy to be collected and paid to the Federal Government by–

(a) every manufacturer on every internal combustion engine motor vehicle manufactured or, as the case may be, assembled and supplied by him; and

(b) every person on every internal combustion engine motor vehicle imported by him into Pakistan.

(2) The levy shall be paid at a rate and by such persons as is mentioned in the First Schedule.

(3) The Federal Government may, from time to time, revise the rate or otherwise add or remove a category of internal combustion engine mentioned at the First Schedule.

(4) The levy shall not apply to any motor vehicle of the following categories, namely:-

(a) a new energy vehicle;

(b) an internal combustion engine motor vehicle manufactured or imported exclusively for export purposes under an order of the Federal Government;

(c) an internal combustion engine motor vehicle owned by a diplomatic mission or consulate, and an international organization enjoying privileges under the Diplomatic and Consular Privileges Ordinance, 1972 (Ordinance IX of 1972); and

(d) any other internal combustion engine motor vehicle or category of internal combustion engine motor vehicle that the Federal Government may, by a notification in the official Gazette, exempt from application of the levy with or without any and conditions.

4. Amendments of the Customs Act, 1969 (IV of 1969)

In the Customs Act, 1969 (IV of 1969), the following further amendments shall be made, namely:-

(1) in section 2,-

(a) after clause (ea), the following new clause shall be inserted, namely:-

“ (eb) “Cargo Tracking System” means a digital system, as may be notified by the Board, for the prevention of smuggling and for the electronic monitoring of the import, export, transit, and transshipment of goods transported within or into or out of the territory of Pakistan;“; and

(b) after clause (kka), the following new clause (kkaa) shall be inserted, namely:-

“(kkaa) “e-bilty” means a digital document generated through the Cargo Tracking System, electronically linked with the transport vehicle engaged in the import, export, transit, or transshipment of goods transported within or into or out of the territory of Pakistan in the manner prescribed under the rules by the Board;“;

(2) for section 3A, the following shall be substituted, namely:-

“3A. Directorate General of Intelligence and Risk Management, Customs.- (1) The Directorate General of Intelligence and Risk Management, Customs shall consist of a Director General and as many Directors, Additional Directors, Deputy Directors, Assistant Directors and such other officer of Customs as the Board may, by notification in the official Gazette, appoint.

(2) The Directorate General of Intelligence and Risk Management-Customs shall also have powers assigned under the Anti-Money Laundering Act, 2010 (VII of 2010) and rules or regulations

made thereunder to the defunct Directorate General of Intelligence and Investigation, Customs.“;

(3) for section 3B, the following shall be substituted, namely:-

“3B. Directorate General of Customs Auction.- The Directorate General of Customs Auction shall consist of a Director General and as many Directors, Additional Directors, Deputy Directors, Assistant Directors and such other officer of Customs as the Board may, by notification in the official Gazette, appoint.”;

(4) for section 3BBB, the following shall be substituted, namely:-

“3BBB. Directorate General of Communication and Public Relations, Customs.- The Directorate General of Communication and Public Relations, Customs shall consist of a Director General and as many Directors, Additional Directors, Deputy Directors, Assistant Directors and such other officer of Customs as the Board may, by notification in the official Gazette, appoint.”;

(5) in section 3DD, for the expression “Directorate General of Post Clearance Audit (PCA)”, wherever occurring, the expression “Directorate General of Post Clearance Audit and Internal Audit (PCA & IA)” shall be substituted”;

(6) after section 3E, the following new section shall be inserted, namely:-

“3F. Hiring of technology specialists, auditors, accountants and goods evaluators on short term contract.- (1) The Board may hire services of technology specialists, auditors, accountants and goods evaluators on short term contracts not

exceeding two years on such terms and conditions as may be prescribed by the Board.

(2) The re-hiring of persons hired under sub-section (1), shall be subject to the performance review by the Board.“;

(7) in section 19, in sub-section (5), in the second proviso, for the figure “2025”, the figure “2026” shall be substituted;

(8) in section 19C, for the words “does not exceed five thousand”, the words “through post or courier does not exceed one thousand” shall be substituted;

(9) in section 27A, 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 scrapping and mutilation shall not be allowed for quantity exceeding ten percent of the imported goods.”;

(10) in section 32, in sub-section (3A), in the proviso, for the words “twenty thousand”, the words “one hundred thousand” shall be substituted and after the word “action”, the words “if he deposits the recoverable amount” shall be inserted;

(11) in section 79, in sub-section (1), after clause (b), for the explanation, the following shall be substituted, namely:-

Explanation.- For the purposes of this clause, the payment of duty, taxes, other charges in respect of transshipment shall be made at the port of destination and assessment may be made in such manner at such place as may be prescribed by the Board:

Provided that, from such date as notified by the Board, in respect of goods declaration filed prior to berthing of the vessel or cross-over event of vehicle, he shall have the option to pay his liability of duty, taxes and other charges on completion of assessment.“;

(12) in section 80, after sub-section (5), the following new sub-section shall be added, namely

“(6) Subject to such conditions, limitations or restrictions as it may impose, the Board may by a special order constitute Centralized Assessment Unit and Centralized Examination Unit at such places as it may deem appropriate:

Provided that-

(a) import, export and transit consignments at any customs port, inland customs station, border customs station or airport may be assessed and examined through Centralized Assessment Unit and Centralized Examination Unit;

(b) Centralized Assessment Unit shall be a restricted area accessible only to the designated customs officers or such other officers authorized by the Chief Collector;

(c) digitalized assessment may be made through customs computerized system on the basis of artificial intelligence tools;

(d) the Board may prescribe any manner or conditions for assessment or examination of goods through Centralized Assessment Unit and Centralized Examination Unit; and

(e) the Centralized Assessment Unit and Centralized Examination Unit already constituted shall be deemed to have always been constituted under this section.“;

(13) for section 82, the following shall be substituted, namely:-

“82. Procedure in case of goods not cleared or warehoused or transshipped or exported or removed from the port after unloading or filing of declaration.- (1) The owner of the goods shall be liable to such penalties as may be notified by the Federal Government in the following cases, namely:-

(a) goods declaration is not filed for home-consumption or warehousing or transshipment within twenty days of the arrival of goods at a customs station;

(b) for the goods declaration filed prior to berthing of the vessel, the goods are not removed from the customs station after payment of leviable duty and taxes, within five days of completion of assessment and berthing of the vessel;

(c) for the goods declaration filed after berthing of vessel, the goods are not removed from the customs station for home-consumption or warehousing or transshipment within five days of the clearance of the goods declaration; and

(d) the goods are not loaded on the conveyance for export within fifteen days of the entry in the port:

Provided that in unavoidable circumstances, the Collector of Customs may waive the penalty fixed under this section.

(2) Such goods may, after due notice to the owner, if his address could be ascertained, or after due notice to the carrier, shipping or customs agent, custodian of the goods, as the case may be, be sold in auction or taken into custody by Customs and removed from the port to a Customs warehouse for auction under the order of the Assistant Collector of Customs notwithstanding the fact that adjudication of the case under section 179, or an appeal or special customs reference application under section 193, 194 or 196 as the case may be, or a proceeding is pending in any court:

Provided that the goods shall be liable to confiscation if a goods declaration for home-consumption or warehousing or transshipment is not filed within thirty days of arrival of the goods at the customs station or the goods are not loaded on the conveyance for export or not removed from the port area within thirty days of assessment of the goods declaration:

Provided further that-

(a) animals and perishable and hazardous goods may, with the permission of the appropriate officer, be sold or destroyed at any time;

(b) arms, ammunition or military stores may be sold or otherwise disposed of at such time and place and in

such manner as the Board may, with the approval of the Federal Government, direct; and

(c) in case where goods are sold pending adjudication, appeal or decision of the court, the proceeds of sale shall be kept in deposit and if on such adjudication, or as the case may be, in such appeal or the decision of the court, the goods sold are found not to have been liable to confiscation, the entire sale proceeds, after necessary deduction of duties, taxes transportation and other charges or duties as provided in section 201, shall be handed over to the owner:

Provided also that Collector of Customs may direct the importer or in case importer is not traceable, the shipping line to re-export out of Pakistan any goods, banned or restricted through a notification issued by the Federal Government, if the same are not cleared or auctioned within sixty days of the date of their arrival:

Provided also that where Customs removes such goods from the premises of the custodian for disposal, the charges due to the custodian shall be paid subsequently from the sale proceeds of the goods in the manner as provided under section 201:

Provided also that nothing in this section shall authorize removal for home consumption of any dutiable goods without payment of customs duties thereon.“;

(14) in section 83, in sub-section (1), in the proviso, after the word “documents”, the expression “after payment of duty, taxes and other charges thereon” shall be inserted;

(15) after section 83B, the following new section shall be inserted, namely:

“83C. Cargo Tracking System and e-Bilty Mechanism.-(1) Any person being a consignor, transporter, shipping agent, freight forwarder, consignee, supplier or recipient of goods and causing movement of goods from and to a seaport, land border station, inland dry-port or inland movement, shall be required to electronically generate, carry, display or validate an e-bilty through the Cargo Tracking System.

(2) The Board may prescribe the manner and procedure to implement e-bilty mechanism and employ any technological means for tracking, identifying en route and digital record keeping of any kind of goods as part of its cargo tracking system and may charge fee or charges for maintenance and operation of the tracking system.

(3) In case of any violation, the goods, conveyance, owner of goods and master of conveyance, as the case may be, shall be liable to fine, penalty, detention, seizure and confiscation under the provisions of this Act.

(4) Notwithstanding anything contained in the aforementioned provisions, no e-bilty is required to be generated, as prescribed by the Board where-

(a) the value of the goods or the travel distance is less than the prescribed limit; or

(b) the goods being transported are specifically exempted from the purview of e-bilty mechanism.“;

(16) in section 144, after the words “by post”, wherever occurring, the words “or by courier” shall be inserted;

(17) in section 145, after the words “by post”, wherever occurring, the words “or by courier” and after the words “postal authorities”, the words “or courier companies” shall be inserted;

(18) in section 156, in sub-section (1), in the Table,-

(a) against S.No. 64,

(i) in column (1), for the expression “section 128 or section 129”, the expression “section 127, section 128, section 129 or section 129A” shall be substituted; and

(ii) in column (3), for the expression “128 & 129”, the expression “127, 128, 129 and 129A” shall substituted; and

(b) against S.No.105, after sub-serial number (viii), the following new sub-serial number shall be added, namely:-

(19) in section 157,-

(i) in sub-section (2), proviso shall be omitted; and

(ii) in sub-section (3), for the expression “her”, the expression “its” shall be substituted;

(20) in section 169, after sub-section (5), the following new sub-section (6) shall be added, namely:-

“(6) No court shall stay the auction proceedings unless the person obtaining stay order furnish pay order or bank guarantee not less than twenty-five percent of the reserve price of the goods before the nazir of the court.”;

(21) in section 179,-

(a) in sub-section (3),-

(i) in the first proviso, for the word “thirty”, the words “forty-five” shall be substituted and after the word “notice”, the words “extendable for fifteen days by the Collector Adjudication” shall be inserted; and

(ii) in the third proviso, for the word “thirty”, the words “forty-five” shall be substituted; and

(b) in sub-section (4), for the words “in exceptional circumstance”, the words “as deemed appropriate after reasons to be recorded in writing” shall be substituted;

(22) in section 187, after the word “license”, wherever occurring, the words “or goods declaration or sales tax invoice in his name” shall be inserted;

(23) after section 187, amended as aforesaid, the following new section shall be inserted, namely:-

“187A. Presumption of legal character of vehicle. - Where any vehicle is detained or seized under this Act or the rules made thereunder and such vehicle upon forensic examination is found to be

having a tampered chassis number or cut and weld chassis or chassis number filled with welding material or re-stamped, such vehicle shall be presumed to be smuggled, even if registered with Motor Registration Authority, and shall be confiscated and the Board may authorize the use of such confiscated vehicles for operational purposes in the manner provided in section 182, of this Act, within ninety days of confiscation.“;

(24) in section 194A,-

(a) in sub-section (2), for the words “thirty days”, the words “forty-five days” shall be substituted; and

(b) in sub-section (5), 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 such stay order shall be subject to furnishing of pay order or bank guarantee not less than twenty-five per cent of principal amount by the aggrieved person before the registrar of the Tribunal.”;

(25) in section 195,-

(a) in sub-section (1), after the words “Chief Collector”, the words “or Director General” and after the words “Collector of Customs”, the words “or Director”, wherever occurring, shall be inserted; and

(b) in sub-section (1A), after the word “proceeding”, the words “including adjudication proceedings” shall be inserted;

(26) in section 196,-

(a) in sub-section (1),-

(i) after the words “thirty days of the”, the words “date of receipt of” shall be inserted; and

(ii) the expression “under sub-section (3) of section 194B” shall be omitted; and

(b) in sub-section (6), for the full stop at the end, a colon shall be substituted and thereafter the following proviso shall be inserted, namely:-

“Provided that such stay order shall be subject to furnishing of pay order or bank guarantee not less than twenty-five percent of the principal amount by the aggrieved person before the nazir of the court.”;

(27) in section 201,-

(a) in sub-section (1), after the words “public auction”, a full stop shall be added and thereafter the expression, “or by tender or, with the consent of the owner or his agent or custodian of the goods in writing, in any other manner.” shall be omitted; and

(b) after sub-section (3), the following new sub-section (4) shall be added, namely:-

“(4) No court shall stay the auction proceedings unless the person obtaining stay order furnish pay order or bank guarantee not less than fifty percent of the reserve price of the goods before the nazir of the court.”;

(28) after section 224, the following new sections shall be added, namely:-

“225. Establishment of Customs Command Fund (CCF).- (1) There shall be established a fund to be called the Customs Command Fund.

(2) Allocation for the Customs Command Fund shall be made by the Federal Government from the sale proceeds of auction of smuggled goods, for supporting anti-smuggling activities, as per the share notified by the Board with the concurrence of the Finance Division.

Explanation.- Sale proceeds shall become part of the Federal Consolidated Fund before budgetary allocation of amount to the Customs Command Fund established under this section.

(3) The Board may prescribe the manner for utilization of the funds received in the Customs Command Fund and impose any conditions, limitations or restrictions as it may deem necessary.

A foreign vendor shall have significant digital presence in Pakistan under this Act, where the foreign vendor supplies digitally ordered services and goods from outside Pakistan to any user in Pakistan, if the aggregate amount exceeds one million rupees in a financial year along with one of the following additional factors -

(a) existence of a user base and the associated data input;

(b) billing or collection in local currency or with a local form of payment;

(d) responsibility for the provision by the foreign vendors of other support services (aftersales services, repairs and maintenance); and

(e) continued marketing and sales promotion activities, online or not, to attract customers.

Chapter III - Collection and Recovery

(1) Unless otherwise specified in the rules prescribed under this Act, the levy shall be imposed and collected -

(a) in respect of an internal combustion engine motor vehicle imported in Pakistan, in the same manner as an import duty payable under the Customs Act, 1969 (IV of 1969) is collected; and

(b) in respect of an internal combustion engine motor vehicle manufactured or assembled in Pakistan, in the same manner as a sales tax leviable under the Sales Tax Act, 1990 (V of 1990) is collected.

(2) The provisions of the Customs Act, 1969 (IV of 1969), or, as the case may be, of the Sales Tax Act, 1990 shall, in so far as may be practicable, apply to the imposition, collection, recovery and refund of the levy.

5. Amendment in the Members of Parliament (Salaries and Allowances) Act, 1974 (XXVII of 1974)

In the Members of Parliament (Salaries and Allowances) Act, 1974 (XXVII of 1974), in section 14B, after the word “Secretariat”, the expression “or by the Finance Committee of the Senate Secretariat, as the case may be,” shall be inserted.“.

(1) Every payment intermediary including a banking company, financial institution, licensed exchange company or payment gateway responsible for making a payment in whole or part remitting outside Pakistan, the proceeds chargeable to tax under section 3 of this Act, to a foreign vendor for digitally ordered services or goods shall deduct tax from the gross amount paid at the rate specified in Schedule to this Act.

(2) Notwithstanding anything contained in any law, the payment intermediary shall not maintain any bank account for a foreign vendor supplying goods or services from outside Pakistan and remit funds outside Pakistan unless the deduction of the tax under this section has been made and deposited in the government treasury as provided in sub-section (1) of this section:

Provided that this sub-section shall not apply where the payment intermediary collects and deposit this tax at the time of remitting any payment outside Pakistan.

(3) Every payment intermediary who has deducted the tax under this section in a month is required to deposit the deducted amount in the government treasury before the 7th of immediately succeeding month.

(4) Notwithstanding anything contained in any law, Customs shall ensure that no courier delivers any consignment unless provide the evidence of payment of this tax at the time when its payment has been settled by the buyer and seller under sub-section (1) of this section.

All proceeds from the levy shall be used for promoting the adoption of new energy vehicles and matters ancillary thereto as determined by the Federal Government from time to time.

6. Amendments in the Federal Ministers and Ministers of State (Salaries, Allowances and Privileges) Act, 1975 (LXII of 1975)

In the Federal Ministers and Ministers of State (Salaries, Allowances and Privileges) Act, 1975 (LXII of 1975), the following further amendments shall be made, namely:-

(1) for section 3, the following shall be substituted, namely:-

“3. Salary.- The Federal Ministers and Ministers of State shall receive a monthly salary equivalent to the salary of a Member of the National Assembly.”; and

(2) in section 22A, the word “automatically”, shall be omitted and thereafter for the words “in proportion to the increase in emoluments of the civil servants”, the words “from time to time” shall be substituted.

(1) Every foreign vendor having digital presence in Pakistan making any payment in whole or part to social media platforms

or any other online platform for online advertisement in Pakistan which is chargeable to tax under section 3, shall deduct tax from the gross amount paid at the rate specified in the Schedule of this Act.

(2) Every foreign vendor who has deducted the tax under this section in a month is required to deposit the deducted amount in the government treasury before the 7th of immediately succeeding month.

The Federal Government may, by notification in the official Gazette, make rules for carrying out the purposes of this Act.

7. Amendments in the Sales Tax Act, 1990

In the Sales Tax Act, 1990 (VII of 1990), the following further amendments shall be made, namely: -

(1) in section 2,-

(a) after rider clause, the following new clause (1) shall be inserted, namely:-

“(1) “abettor” means a person who intentionally abets or connives in tax fraud as defined in clause (37) of section 2 or in the commission of any offence warranting prosecution under this Act, and includes a person who,-

(a) prepares, or causes to be prepared with authorization of the registered person, invoices for false claim of input tax adjustment; or

(b) allows use of bank account held or operated by him for abetting tax fraud or other offence warranting prosecution under this Act or unauthorizedly or illegally maintains or operates business bank account in other registered person’s name.“;

(b) the existing clauses (1) and (1A), shall be renumbered as clauses (1A) and (1B), respectively;

“(4A)“Cargo Tracking System” means a digital system notified by the Board for electronic monitoring and tracking of goods transported within or across the territory of Pakistan, for the purpose of tax enforcement, compliance and prevention of tax evasion;“;

(d) the existing clauses (4A) and (4AA), shall be renumbered as clause (4AA) and (4AAA), respectively;

(e) after clause (5AB), the following new clause shall be inserted, namely:-

“(5ABA) “courier” means any entity engaged in the delivery of goods and collection of cash on behalf of a seller including logistic and ride-hailing services;“;

(f) for the existing clause (9A), the following shall be substituted, namely:-

“(9B) “e-bilty” means a digital transport document generated through the Cargo Tracking System as prescribed by the Board, to accompany goods during their movement.

“(9C) “e-commerce” means sale or purchase of goods conducted over computer networks by methods specifically designed for the purpose of receiving or placing of orders either through websites, mobile applications or online marketplace having digital ordering features by using mobile phones, automated computer-to-computer ordering system or any similar device;“;

(g) for clause (18A), the following shall be substituted, namely:-

“(18A) “online marketplace” means online interfaces that facilitate, for a fee, the direct interaction between multiple buyers and multiple sellers via digital orders for supply of goods, with or without the platform taking economic ownership of the goods that are being sold;“;

(h) after clause (20), the following clause shall be substituted, namely:-

“(20A) “payment intermediary” means a banking company, any financial institution including a licensed foreign exchange company or payment gateway that facilitate the transfer of funds or payment instructions between two or more parties to enable, process, route, or settle payments with respect to goods in a financial transaction, without being the ultimate source or recipient of the payment;“;

(i) in clause (27), -

(i) for the words “should be”, the word “is” shall be substituted; and

(ii) in the proviso, for the full stop at the end, a colon shall be substituted and thereafter the following new provisos shall be added, namely: -

“Provided further that the reduction in price on account of chilling charges or any other similar charges in case of aerated water, beverages, mineral water, or fruit juices shall not be more than five percent of the price inclusive of sales tax, federal excise duty and all taxes other than income tax on which such goods are actually sold to the general body of consumers:

Provided also that, where the Board deems it necessary it may, by notification in the official gazette, fix the retail price of goods specified in the third schedule:

Provided also that, in case of imported goods specified in the Third Schedule, the retail price shall not be less than one hundred thirty percent of the value determined under section 25

of the Customs Act, 1969 (IV of 1969), including the amount of customs duties and federal excise duty levied thereon;“; and

(j) for clause (37), the following shall be substituted, namely:-

“(37). “tax fraud” means knowingly, intentionally, or dishonestly doing any act or abetting any action to cause loss of tax under this Act, including,-

(a) using or preparing false, forged, and fictitious documents, including returns, statements, annexures, and invoices;

(b) false claim of input tax credit based on fictitious transactions;

(d) tampering with or destroying of any material evidence or documents required to be maintained under this Act or the rules made thereunder;

(e) generating fake input through manipulation of return filing system of the Board and making fake entries in the sales tax returns or in the annexures;

(f) making fictitious compliance of section 73, including routing of payments back to the registered person, or for the benefit of the registered person, through a bank account held by a supplier or a purported supplier;

(g) suppression of supplies that are chargeable to tax under this Act;

(h) making taxable supplies of goods without issuing any tax invoice;

(i) suppression and nonpayment of withholding tax in the prescribed manner beyond a period of three months from due date of payment of tax;

(j) acquisition, possession, transportation, disposal or in any way removing, depositing, keeping, concealing, supplying, or purchasing or in any other manner dealing with, any goods in respect of which there are reasons to believe that these are liable to confiscation under this Act or the rules made thereunder; or

(k) making of taxable supplies without getting registration under this Act.“;

(2) in section 3,-

(i) in sub-section (3), in clause (a), the word “and”, occurring at the end shall be omitted and in clause (b) for the full stop at the end, a semi colon and the word “and” shall be substituted and thereafter the following new clause shall be added, namely:-

“(c) in the case of supply of digitally ordered taxable goods by online market place, website and software application from within Pakistan during the course of e-commerce, the liability to collect and pay tax shall be of payment

intermediary including a banking company, a financial institution, licensed exchange company or payment gateway in case the payment is made digitally and of the courier delivering the goods where those are supplied on Cash on Delivery (CoD) basis at the rates provided in the Eleventh Schedule.“;

(ii) in sub-section (7), proviso shall be omitted;

(iii) after sub-section (7), amended as aforesaid, the following new sub-section (7A) shall be inserted, namely: -

“(7A) The tax withheld as provided in the Eleventh Schedule by the payment intermediary or the courier, as the case may be, shall be final discharge of tax liability in respect of taxable supplies of digitally ordered goods by;

(i) cottage industry as defined in clause (5AB) of section 2 of this Act; and

(ii) retailers other than tier-I retailers”

(iv) in sub-section (9A), the proviso shall be omitted.

(3) in section 8B, in sub-section (4), after the full stop at the end, the following shall be added, namely:-

“In order to limit input tax allowance, the Board may also use data based automated risk management system to defer certain input tax or fix higher or lower limits of input tax adjustment:

Provided that the registered person may contest the action taken under this sub-section by filing application and

documents with the Commissioner concerned, who shall decide the case within thirty days of such application.“;

(4) in section 11D, after sub-section (4), the following new sub-section shall be added, namely:-

“(5) Notwithstanding anything contained in this section, in case of person who is liable to be registered under clause (25) of section 2 based on tax withheld under section 236G of Income Tax Ordinance, 2001 (XLIX of 2001) and does not furnish a return upon notice, an officer of inland revenue may assess sales tax liability on the value addition on reasonable grounds including information obtained from the purchase data under section 236G of Income Tax Ordinance, 2001 (XLIX of 2001).”;

(5) in section 11E, for sub-section (1), the following shall be substituted; namely:-

“(1) Where due to any reason, any tax or charge has not been levied or short levied or where the officer of Inland Revenue not below the rank of Assistant Commissioner suspects on the basis of audit or otherwise that due to any reason a person has-

(a) not paid or short paid due sales tax;

(b) claimed input tax credit or refund which is not admissible; or

the officer of Inland Revenue after issuing a show cause notice to the person shall pass an order to determine and recover the

amount of tax unpaid or short paid, inadmissible input tax or refund, or unlawful refund obtained and shall also impose penalty and default surcharge in accordance with sections 33 and 34:

Provided that this section shall not be applicable to the extent of proceedings initiated under section 37A of the Act.“;

(6) in section 11G, in sub-section (2), for the words “twenty days”, the words “eighty days” shall be substituted;

(7) in section 14,-

(i) after sub-section (1), the following new sub-sections (1A) and (1B) shall be inserted, namely:-

“(1A) Every person including a non-resident person except who is running a cottage industry and the retailers who are required to pay sales tax through electricity bills under sub-section (9) of section 3, selling digitally ordered goods from within Pakistan through online marketplace, website or software application as the case may be, shall apply in the prescribed form and in the prescribed manner for registration.

(1B) Every online marketplace or a courier, involved in e-commerce by supplying digitally ordered goods from within Pakistan shall not allow any person to use their services to carry out e-commerce transactions unless it holds NTN and in case sub-section (1A) of this section applies also holds sales tax registration.“; and

(ii) after sub-section (2), the following new sub-section shall be inserted, namely:-

“(2A) If a person, who is required to be registered under the Act, does not apply for registration and the Commissioner Inland Revenue or any other officer, as may be authorized by the Board, after such inquiry as deemed appropriate, having reason to believe that a person is liable to register, he shall compulsorily register such person after providing an opportunity of being heard.”;

(8) after section 14AB, the following new sections shall be inserted, namely:-

“14AC. Bar on operations of bank accounts. - (1) This section shall apply-

(a) where the Commissioner has reasons to believe that a person is engaged in supply of taxable goods without having registration under this Act;

(b) the Commissioner has provided three consecutive opportunities of being heard to the person to obtain registration under this Act; and

(2) Notwithstanding anything contained in this Act or any other law for the time being in force, the Commissioner shall have the powers to direct banking companies, scheduled banks and other financial institutions, through an order in writing, to intermittently suspend operation of the bank account of such a person for three working days.

(3) The Commissioner shall, if the contravention continues under sub-section (1), repeat suspension specified in sub-section (2), for two more times with an interval of one week between the suspensions.

(4) The Commissioner shall, if the contravention under sub-section (1) continues after his order under sub-section (3), direct the banking companies, scheduled banks and other financial institutions, through an order in writing to permanently bar operation of the bank accounts of the person.

(5) Upon registration of such person, the Commissioner shall issue and convey order for removal of bar on operation of his bank accounts not later than two working days.

(6) Any person, aggrieved by any decision or order passed under this section, may within thirty days of the date of receipt of such decision or order prefer an appeal before the Chief Commissioner Inland Revenue.

(7) The provisions of this section shall come into force on such date as the Board may notify in the official Gazette.

(1) Where a -

(a) payment intermediary fails to collect tax as required under section (1) of section 5;

(b) payment intermediary fails to comply with the provisions of section (2) of section 5;

(d) having collected tax under sub-section (3) of section 5 or sub-section (2) of section 6 fails to deposit the tax to the Commissioner, the payment intermediary of foreign vendor, as the case may be, shall be personally liable to pay the amount of tax along with default surcharge @ of KIBOR +3% per annum for the days of default and the Authority under this Act may pass an order to that effect and proceed to recover the same.

(2) No recovery under sub-section (1) shall be made unless the person referred to in sub-section (1) has been granted with an opportunity of being heard.

(3) For recovery of the demand created under this Act, the Part IV of Chapter X of Income Tax Ordinance, 2001 (XLIX 0f 2001) regarding tax recovery shall apply mutatis mutandis.

Chapter IV - Reporting Requirements

If a difficulty arises in giving effect to any of the provisions of this Act, the Federal Government may make an order, not inconsistent with the provisions of this Act, for the purpose of removing the difficulty.

THE FIRST SCHEDULE

[see section 4(29)]

In the Customs Act, 1969 (IV of 1969), in the First Schedule, for the corresponding entries against “PCT Code”, “Description” and “CD%” specified in columns (1), (2), (3) and (4) appearing in chapter 1 to 99, the following corresponding entries relating to “PCT Code”, “Description” and “CD%” shall be substituted, namely:-

THE SECOND SCHEDULE

[See Section 4(30)]

In the Customs Act, 1969 (IV of 1969), for the Fifth Schedule, the following shall be substituted, namely: -

“THE FIFTH SCHEDULE

[see section 18(1A)]

Part-I

Import 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:

Provided that the condition of “local manufacturing” shall not be applicable on import of machinery, equipment and other capital goods imported as plant for setting up of a new power unit of 25 MW and above duly certified by Ministry of Water and Power in respect of those power projects which are on IPP mode meant for supply of electricity to national grid;

Provided further that condition of local manufacturing shall not be applicable for a period of three years, commencing on 1st July, 2018 and ending on 30th June, 2021, against Sr.No.12 of Table under Part-I of Fifth Schedule to the Customs Act, 1969, on import of machinery, equipment and other capital goods imported for new private transmission lines projects under the valid contract (s) or letter (s) of credit and the total C&F value of such imports for the project is US $ 50 million or above duly certified by the Ministry of Energy (Power Division);

Provided further that condition of local manufacturing shall not be applicable against Sr. No.38 of the Table, on import of plant, machinery and equipment if imported by registered pharmaceutical manufacturers for their own use subject to NOC from Ministry of Health.

(ii) except for S. Nos. 1(H), 14, 20,21 and 22 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 bona fide 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;

(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;

(iv) For “Respective Headings” entries in column (3) of the Table against which more than one rate of customs duty has been mentioned in column (4), the rate of 0%, 3% or 11% shall be applicable only for such goods which are chargeable to 0%, 3% or 11% duty respectively under the First Schedule to the Customs Act, 1969. In all such type of entries, a maximum concessionary rate (i.e. 5%, 10% or 15%) has also been mentioned in column (4) of each entry which shall be applicable on the goods which are subject to any of the all remaining higher duty slab rates under the First Schedule to the Customs Act, 1969.

Explanation I.- In entries where customs duty rates 0%, 3% and 5% have been mentioned in column (4), the rate 0% or 3% shall be applicable only for such goods which are chargeable to 0% or 3% duty respectively under First Schedule to the Customs Act, 1969. Whereas for all higher slabs (11%, 16%, 20% and above) concessionary rate of 5% shall be applicable.

Explanation II. - In entries where customs duty rates 3%, 5% have been mentioned in column (4), the rate 3% shall be applicable only for such goods which are chargeable to 3% duty under First Schedule to the Customs Act, 1969. Whereas for all higher slabs (11%, 16%, 20% and above) concessionary rate of 5% shall be applicable.

Explanation III. - In entries where customs duty rates 0%, 3%, 10% have been mentioned in column (4), the rate 0% or 3% shall be applicable only for such goods which are chargeable to 0% or 3% duty respectively under First Schedule to the Customs Act, 1969. Whereas for all higher slabs (11%, 16%, 20% and above) concessionary rate of 10% shall be applicable.

Explanation IV. - In entries where customs duty rates 0%, 3%, 11%, 15% have been mentioned in column (4), the rate 0%, 3% or 11% shall be applicable only for such

goods which are chargeable to 0%, 3% or 11% duty respectively under First Schedule to the Customs Act, 1969. Whereas for all higher slabs (16%, 20% and above) concessionary rate of 15% shall be applicable.; and

(v) Goods imported temporarily for projects under serial numbers 9, 10, 11 and 12, if not re-exported on the conclusion of the project, may be allowed retention or transfer after conclusion of the project, from one company or project to another entitled company or project, with prior approval of the Board, against payment of 0.25% surcharge on C&F value of the goods for each year of retention, besides payment of duties and taxes, chargeable, if any.

Explanation. - Capital Goods mean 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 manufacture 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, cool chain, dairy, poultry industry, IT sector, storage, communication and infrastructure development of SEZs by Zone Developer.

TABLE

Annex-A

CERTIFICATE BY THE CHIEF EXECUTIVE, OR THE PERSON NEXT IN HIERARCHY DULY AUTHORIZED BY THE CHIEF EXECUTIVE: It is certified that the description and quantity mentioned above 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 ____________________ 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. -

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.

Annex-B

CERTIFICATE BY THE AUTHORIZED OFFICER OF THE REGULATORY AUTHORITY: It is hereby certified that the imported goods are genuine and bonafide requirement of the project and the same are not manufactured locally.

Signature& Seal of the Authorized Officer ____________________

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, Excipients/Chemicals, Drugs, Packing Material/ Raw Materials for Packing and Diagnostic Kits and Equipment, Components and other Goods

The Imports under this part shall be subject to following conditions, namely. -

(i). The active pharmaceutical ingredients, Excipients /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 Excipients/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.

(v). For “Respective Headings” entries in column (3) of the Table against which two rates of customs duty 3% and 5% have been mentioned in Column (4), the rate of 3% shall be applicable only for such goods which are chargeable to 3% duty under the First Schedule to the Customs Act 1969.

Table A

Active Pharmaceutical Ingredients (API)

Table B

(Excipients/Chemicals)

Table C (Drugs)

Table D (Packing Materials/Raw Materials for Packing/Bandages)

Table E

(Diagnostic Kits/Equipment)

Part-III

Raw Materials/Inputs for Poultry and Textile Sector; 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 24of Table;

(b) M/s Lotte Chemical Pakistan Ltd, in case of imported goods specified against serial number 35 of Table;

(c) Ministry of National Food Security and Research, in case of goods, specified against serial number 24 and 29 of Table;

(ii) Omitted.

(iii) in already computerized Collectorates and Custom-stations where 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

Part-IV

Imports of Machinery and Equipment for Textile Sector

TABLE

Explanation: - For the purpose of this Part the expression “excluding those manufactured locally” means the goods which are not included in the list of locally manufactured goods specified in General Order issued by the Federal Board of Revenue or as the case may be, certified as such by the Engineering Development Board.

Part-V (Omitted vide Finance Act, 2023)

Part-V(A) Import of Electric Vehicles (EV) CBU & their Parts Under Electric Vehicle Policy 2020

TABLE-I

[For 2-3 Wheelers, 4-Wheelers & Heavy Commercial Vehicles (CBUs)]

TABLE-II [For CKD & EV Specific Parts]

TABLE-III

[Miscellaneous]

Part-V(B) Import of Hybrid Electric Vehicles (CBUs) Under Auto Industry Development and Export Policy (AIDEP) 2021-26

TABLE-I

TABLE-II Import of Parts for Hybrid Vehicles Under Auto Industry Development and Export Policy (AIDEP) 2021-26

Part V(C) Import of Agricultural Tractors TABLE

Part-VI

Imports of Aviation Related Goods i.e. Aircrafts and Parts etc.

by Airline Companies/Industry under National Aviation Policy 2023

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 exemption shall be admissible to Maintenance, Repair and Overhaul Companies (MROs) and Aircraft Maintenance Organizations (AMOs) duly authorized by the Defence Division, and the Airline Companies having valid registration and license from the Pakistan Civil Aviation Authority under the Pakistan Civil Aviation Act, 2023 (XLIX of 2023) duly shared with the Customs Computerized System or Pakistan Single Window to the effect that the intending importer is operating in the country or intends to operate in the country in the airline sector;

(ii) the list of imported items is duly approved by the Pakistan Airports Authority, Defence Division, Government of Pakistan for every consignment imported by MRO or AMO in line with Policy Framework approved by the Government of Pakistan;

(iii) the Chief Executive, or the person next in hierarchy duly authorized by the Chief Executive or Head of the importing Company shall certify that the imported goods/items are the company’s bonafide requirement and shall be used for the purpose as defined/notified by the Defence Division, Government of Pakistan under the Aviation Policy. The importer shall declare all relevant information to the Customs while claiming exemption regarding genuineness of the claim through Customs computerized system or Pakistan single window; and

(iv) In case of deviation from the above stipulations, the Collector of Customs shall initiate proceedings for recovery of duty and taxes under the relevant laws.

TABLE

Part-VII Miscellaneous

[Omitted]

Part-VIII

Imports of specific Goods allowed at Joint Border Sustenance Markets

In order to ensure smooth functioning and operationalization of Border Markets in specific border areas, the imports under this part shall be subject to following conditions, namely. -

(i) Border markets will be functional for two days each week and total allowance per day for the visitor will be $100.

(ii) The Customs Value of imported goods will be displayed for ascertaining the admissible quantities of imported goods.

(iii) The visitor will purchase goods from any category up to US $50 on concessional rate of leviable duty/taxes as mentioned in column (4) of the Table.

(iv) In case, a visitor chooses to purchase goods of value more than $50 from a specific category, it will be considered as commercial quantity being liable to duty/taxes on statutory rates.

(v) The Customs staff posted at the border market will make an entry via electronic system for the goods purchased by the visitor on the prescribed format as notified by the Board.

(vi) A system generated receipt will be issued to the visitor bearing his Name & CNIC No. by the Custom Officer in respect of goods purchased along with payable Customs Duty.

Table

First Schedule

Rate of New Energy Vehicle Adoption Levey

(see section 3)

TAHIR HUSSAIN, Secretary General.

PRINTED BY THE MANAGER, PRINTING CORPORATION OF PAKISTAN PRESS, ISLAMABAD. PUBLISHED BY THE DEPUTY CONTROLLER, STATIONERY AND FORMS, UNIVERSITY ROAD, KARACHI.

8. Amendment in the Regulation of Generation, Transmission and Distribution of Electric Power Act, 1997 (XL of 1997)

In the Regulation of Generation, Transmission and Distribution of Electric Power Act, 1997 (XL of 1997), in section 31, in sub-section (8),-

(a) in the first proviso, in clause (b), after the word “Government”, occurring for the first time, the expression “or of a public sector entity nominated by the Federal Government”, shall be inserted;

(b) in the explanation, after the word “Government”, the expression, “or of a public sector entity nominated by the Federal Government”, shall be inserted, and for a colon at the end, a full stop shall be substituted; and

(1) Every payment intermediary responsible for collection of tax in respect of remitting proceeds to foreign vendors under section 5 of this Act shall file a quarterly statement in the manner as prescribed to the Commissioner Inland Revenue containing foreign vendor wise information regarding all payments related to e-commerce transactions of sale of digitally ordered services and goods including as follows -

(a) name of the purchaser, its identification number (CNIC) and address of the foreign vendor to whom payments have been made from which tax has been collected under section 5 and section 6;

(b) transaction date, unique identifier (invoice number) and total transaction value from which tax has been collected under section 5 and section 6;

(d) any other particular may be prescribed.

(2) Every payment intermediary maintaining bank account for foreign vendors with digital presence in Pakistan shall file a quarterly statement in the manner as prescribed to the Commissioner Inland Revenue containing information regarding total credit amount in the bank account during this period in the account of foreign vendor and the amount remitted outside Pakistan.

9. Amendments in the Islamabad Capital Territory (Tax on Services) Ordinance, 2001, (XLII of 2001)

In the Islamabad Capital Territory (Tax on Services) Ordinance, 2001 (XLII of 2001), in section 3,-

(a) in sub-section (1), in the first proviso, for the semicolon, a colon shall be substituted and thereafter the following new proviso shall be added, namely: -

“Provided further that from such date and in such mode and manner, as may be prescribed through a general order by the Board, any service provider as mentioned in Table 1 and Table 2 of the Schedule shall integrate his businesses with the Board’s computerized system for real-time reporting of provision of services.”;

(b) in sub-section (2A), in clause (d), after the expression “48,”, the expression “147 and 163” shall be inserted; and

“(4) Notwithstanding the provisions of this section, the Board may, whenever deem necessary, subject to such conditions, restrictions and limitations, specify a Negative List of services exempt from tax under this Ordinance in Table-3 to the Schedule, by notification in the official Gazette.”.

Every social media and online platform having digital presence in Pakistan is required to file a quarterly statement in the manner as prescribed providing client-wise information of local vendors or foreign vendors with or without a permanent establishment whose advertisements are relayed in Pakistan through its platform and the amount received.

Chapter V - Penalty and Suspension

10. Amendments in the Income Tax Ordinance, 2001 (XLIX of 2001)

In the Income Tax Ordinance, 2001 (XLIX of 2001), the following further amendments shall be made, namely: -

(1) in section 2, -

(i) in clause (7), the words “and includes anybody corporate which transacts the business of banking in Pakistan” shall be omitted;

(ii) after clause (17B), the following new clause shall be inserted, namely: -

“(17C) “digitally delivered services” means any service delivered over the internet or electronic networks, where the delivery is automated and requires minimal or no human intervention including music, audio and video streaming services, cloud services, online software applications services, services delivered through online inter-personal interaction i.e., tele medicines, e-learning etc., online banking services, architectural design services, research and consultancy reports, accounting services in the form of digital files or any other online facility;“;

(iii) after clause (19A), the following new clause shall be inserted, namely: -

“(19AA) “e-commerce” means sale or purchase of goods and services conducted over computer networks by methods specifically designed for the purpose of receiving or placing of orders either through websites,

mobile applications or online marketplace having digital ordering features by using either mobile phone, iPad, Tablet or automated computer-to-computer ordering system;“;

(iv) in clause (36), in sub-clause (a), after the word “sport”, the words “excluding recreational clubs where the joining fee for membership exceeds one million for any class of new members” shall be inserted; and

(v) in clause (38B), after the word “seller”, occurring at the end, the following expression shall be inserted, namely: -

“and includes “online interfaces” that facilitate, for a fee, the direct interaction between multiple buyers and multiple sellers via digital orders for supply of goods and services, with or without the platform taking economic ownership of the goods or providing or rendering the services that are being sold.“;

(2) in section 4AB, for the full stop at the end, a colon shall be substituted and thereafter the following proviso shall be added, namely: -

“Provided that in case of an individual deriving income chargeable under the head “Salary”, a surcharge shall be payable at the rate of nine percent of the income tax imposed under Division I of Part I of the First Schedule where the taxable income exceeds rupees ten million in a tax year.“;

(3) after section 6, the following new section shall be inserted, namely: -

“6A. Tax on payments for digital transactions in e-commerce platforms.- (1) Subject to this Ordinance, a tax shall be

imposed, at the rate specified in Division IVA of Part I of the First Schedule, on every person who receives payment for supply of digitally ordered goods or services which are delivered from within Pakistan using locally operated online platforms including online marketplace or websites:

Provided that the export proceeds subjected to withholding under section 154 and 154A shall not fall within the ambit of this section.

(2) The tax imposed under sub-section (1) shall be computed by applying the relevant rate of tax to the gross amounts of receipts mentioned in sub-section (1).“;

(4) in section 8,-

(a) for the expression “5, 5A, 5AA, 6,”, wherever appearing, the expression “5, 5A, 5AA, 6, 6A,” shall be substituted; and

(b) in clause (e), after the figure “6”, the expression “, 6A” shall be inserted;

(5) in section 12, after sub-section (2), the following new sub-section (2A) shall be inserted, namely:-

(2A) In case of pension under clause (f) of sub-section (2),-

(i) the pension shall be charged to tax as a final tax at the rates specified in the proviso to clause (2) of Division I of Part I of the First Schedule where the amount received by an individual from a former employer for a tax year exceeds ten million rupees and the individual who has attained the age of seventy years shall not be charged to tax on pension income; and

(ii) the pension of an individual who continues to work for former employer or its associate shall be charged to tax at the rates specified under clause (1) or (2) of Division I of Part I to First Schedule as the case may be.“;

(6) in section 18, in sub-section (1), in clause (b), in the explanation, after the word “societies”, the words “including recreational club” shall be inserted;

(7) in section 21, -

(a) in clause (p), the word “and”, appearing at the end shall be omitted and thereafter for clause (q), the following shall be substituted, namely: -

“(q) ten percent of the claimed expenditure made attributable to purchases made from persons who are not National Tax Number holders:

Provided that in case of purchase of agricultural produce this clause shall only apply to the purchase made from middle man:

Provided further that the Board may, by notification in the official Gazette, exempt persons or classes of persons from this clause subject to such conditions and limitations as may be specified therein;“; and

(b) in clause (r), for the full stop at the end, the expression “; and” shall be substituted and thereafter the following new clause shall be added, namely: -

“(s) fifty percent of the expenditure claimed in respect of sale where the taxpayer received payment exceeding two

hundred thousand rupees otherwise than through a banking channel or digital means against a single invoice containing one or more than one transactions of supply of goods or provisions of services.“;

(8) in section 22,-

(a) in sub-section (1), for the full stop, appearing at the end, a colon shall be substituted and thereafter the following proviso shall be added, namely: -

“Provided that the depreciation expense shall not be allowed for the amount paid for addition of capital assets to a seller in all relevant tax years if the tax deductible under sections 152 or 153 of the Ordinance in respect of those payments has not been deducted and deposited in the treasury, by not adding such amount paid for addition in capital assets in the assets for computation of tax depreciation.” and;

(b) in sub-section (2), for the colon, appearing at the end, a full stop shall be substituted;

(9) in section 24, in sub-section (4), for the expression “twenty-five years”, the expression “fifteen years” shall be substituted;

(10) in section 39, in sub-section (3), after the word “channel”, the expression “or through digital means as defined in section 2” shall be inserted;

(11) in section 56, in sub-section (1), for the full stop, appearing at the end, a colon shall be substituted and thereafter the following proviso shall be added, namely: -

“Provided that the adjustment of business loss shall not be allowed against income from property for the tax year.”;

(12) in section 59B, in sub-section (2), after clause (b), the following new clause shall be inserted, namely: -

“(ba) a company or companies within the group whose income from business is chargeable to tax under any provisions of this Ordinance other than Division II of Part I of the First Schedule to the Ordinance shall not be entitled to avail group relief;”;

(13) after section 63, the following new section shall be inserted, namely: -

“63A. Tax credit for interest paid on low-cost housing loan.- (1) An individual shall be entitled to a tax credit for a tax year in respect of any profit on debt or share in rent or share in appreciation for value of house paid by the person in the year on a loan by a scheduled bank or any other financial institution regulated by the Securities and Exchange Commission of Pakistan or advanced by Government or the Local Government or a statutory body or a public company listed on a registered stock exchange in Pakistan where the person utilizes the loan for the construction (including land) or acquisition of one personal house having land area up to two thousand five hundred square feet or flat having total area up to two thousand square feet.

(2) The amount of a person’s tax credit allowed under sub-section (1) for a tax year shall be computed according to the following formula, namely: -

(A/B) x C

where -

A is the amount of tax assessed to the person for the tax year before allowance of any tax credit under this Part;

B is the person’s taxable income for the tax year; and

C is the lesser of -

(a) the total profit on debt referred to in sub-section (1) paid by the person in the year; or

(b) thirty per cent of the person’s taxable income for the year.

(3) The person shall not be entitled to tax credit under this section for any profit deductible under section 15A.

(4) Where an individual has claimed tax credit under this section, he shall not be entitled to claim tax credit for another house or flat under this section during the subsequent fifteen tax years.“;

(14) in section 65F, in sub-section (1), for clause (a), the following shall be substituted, namely: -

“(a) persons engaged in coal mining projects in Sindh, to the extent, the income is derived from supplying coal to power generation projects.”;

(15) in section 75A, -

(a) in the heading, after the word “channel”, the word “or digital means” shall be inserted; and

(b) in sub-section (1), in clause (b), after the word “instrument”, the words “or through digital means” shall be inserted;

(16) in section 100C, the expressions “Table II of”, wherever appearing, shall be omitted;

(17) in section 113, in sub-section (2), in clause (c), in the second proviso, for the word “three”, the word “two” shall be substituted;

(18) after section 114B, the following new section shall be inserted, namely:-

“114C. Restriction on economic transactions by certain persons. - (1) Notwithstanding anything contained in any law for the time being in force, -

(a) any application, by any ineligible person, for booking, purchase or registration of a motor vehicle of the value exceeding the threshold given in Fifteenth Schedule, shall not be accepted or processed by any manufacturer of a motor vehicle or vehicle registering authority of Excise and Taxation Department, as the case may be;

(b) any application or request by any ineligible person, to any authority responsible for registering, recording or attesting transfer of any immovable property, of the value exceeding the threshold given in Fifteenth Schedule, shall not be accepted or processed by such authority;

(c) Any person authorized to open and maintain an account in respect of securities, units of mutual fund or similar investment, shall not open an account or maintain such account if the total investment by an ineligible person in any such account exceeds the threshold specified in Fifteenth Schedule; and

(d) a banking company shall not allow cash withdrawal from any of the bank account of any person, exceeding the threshold as specified in Fifteenth Schedule.

(2) The provisions of sub-section (1), shall not apply on transactions made by a non-resident person or a public company except that mentioned in clause (d) of sub-section (1).

(3) The sources of investment and expenditure statement filed by the person and sufficient resources mentioned in sub-section (5), shall not be construed as nature and source of income for the purposes of section 111.

(4) For the purposes of this section, -

(a) “eligible person” shall mean a person who has filed-

(i) a return of income for the tax year immediately preceding the year of transaction mentioned in sub-section (1) and has sufficient resources in the wealth statement in case of an individual, or financial statement in case of a company or an association of persons, as the case may be, for such transaction; or

(ii) sources of investment and expenditure statement declaring sufficient resources and furnishing explanation thereof for a particular purchase or investment

transaction covered in clauses (a), (b) and (c) of sub-section (1):

Provided that in case of an individual, the eligible person shall include his immediate family members.;

(b) “immediate family members” in respect of an individual, shall include his parents, spouse and dependent children;

(d) “sources of investment and expenditure statement” shall mean a declaration by a person filed on the Board’s web portal, specifying the sources of funds for making such transaction; and

(e) “sufficient resources” shall mean one hundred and thirty percent of the cash and equivalent assets comprising cash denominated in local or foreign currency, fair market value of gold, net realizable value of stocks, bonds, receivables or any other cash equivalent asset as may be prescribed, declared by a person either in his sources of investment and expenditure statement, or wealth statement filed for the latest tax year and in the case of a company or association of persons, cash

and equivalent assets, declared in the financial statements attached with the income tax return for the latest tax year:

Provided that where an asset mentioned in sub-section (1), other than clause (d) of this sub-section, has been purchased by way of exchange of capital assets already declared in the wealth statement, or financial statement, or sources of investment and expenditure statement, the disposal of such capital assets shall be treated to be part of cash equivalent assets to the extent of the value mentioned in the agreement.

(5) All or any of the restrictions or limitations imposed on the ineligible person under this section shall come into force on such date as the Federal Government may, by notification in official Gazette, appoint with such reductions and enhancements in the thresholds specified in the Fifteenth Schedule as deemed appropriate.“;

(19) in section 120, in sub-section (1),-

(i) in clause (a), after the word “thereon”, the expression “equal to the respective amounts adjusted under sub-section (2A)” shall be inserted; and

(ii) in clause (b), after the words “day the” the expression “adjustments were made under sub-section (2A)” shall be inserted;

(20) in section 122, in sub-section (9), for the provisos, the following provisos shall be substituted, namely:-

“Provided that order under this section shall be made within one year of issuance of show cause notice or within such extended period as the Commissioner may, for reasons to be recorded in writing, so however, such extended period shall in no case exceed ninety days. This proviso shall be applicable to a show cause notice issued on or after the first day of July, 2021:

Provided further that any period during which the proceedings are adjourned on account of a stay order or Alternative Dispute Resolution proceedings or agreed assessment proceedings under section 122D or the time taken through adjournment by the taxpayer not exceeding sixty days shall be excluded from the computation of the period specified in the first proviso.“;

(21) in section 124, after sub-section (4), the following new sub-sections shall be inserted, namely:-

“(4A) Where the Commissioner (Appeals), Appellate Tribunal, High Court or Supreme Court has confirmed the tax payable as determined in the order appealed against no appeal effect order will be required to be issued and the Commissioner shall proceed to effect recovery.

(4B) Subject to the provisions of sub-section (2) where the Appellate Tribunal, High Court or Supreme Court has partly set aside the order and confirmed or modified the order on some other issues that were subject matter of the appeal, the Commissioner shall issue

an appeal effect order on the prescribed form determining the tax payable as a result of the confirmation or modification by the Appellate Tribunal, High Court or Supreme Court and excluding the tax payable on the matters that have been set aside or remanded and the tax payable on the basis of the issues that have been confirmed or modified shall be paid or recovered under the provisions of the Ordinance.“;

(22) section 126A shall be omitted;

(23) in section 127, in sub-section (1), for the expression “Subject to section 126A, any person”, the expression “Any person, other than State-Owned Enterprise (SOE),” shall be substituted and for the full stop at the end, a colon shall be substituted and thereafter the following new proviso shall be added, namely: -

“Provided that an aggrieved person under sub-section (1) may have the option to either file appeal before Commissioner Inland Revenue (Appeals) directly or may surrender his right of appeal before Commissioner Inland Revenue (Appeals) and avail the next statutory appellate forum by filing the appeal directly before the Appellate Tribunal Inland Revenue.”;

(24) in section 130, in sub-section (3), for clause (b), the following shall be substituted, namely: -

“(b) has, for an aggregate period of not less than ten years, been-

(i) in practice as a chartered accountant, either individually or in a firm of the chartered accountants, within the meaning of Chartered Accountants Ordinance, 1961 (X of 1961); or

(ii) a chartered accountant, within the meaning of the Chartered Accountants Ordinance, 1961 (X of 1961), and has been in employment of a chartered accountant in practice as specified in sub-clause (i) above at least for a period of ten years;“;

(25) in section 131, for sub-section (1), the following shall be substituted, namely: -

“(1) Where the taxpayer, or the Commissioner objects to an order passed by the Commissioner (Appeals), the taxpayer or Commissioner may appeal to the Appellate Tribunal against such order within thirty days of the receipt of such order:

Provided that the taxpayer may directly appeal against the order of the Officer Inland Revenue or the Commissioner as the case may be to the Appellate Tribunal by exercising the option as provided in sub-section (1) of section 127.“;

(26) in section 133, -

(a) in sub-section (1), -

(i) for the expression “Subject to section 126A, within thirty”, the expression “Within sixty” shall be substituted;

(ii) the expression “or, as the case may be, the Commissioner (Appeals)” shall be omitted;

(iii) the expression “or a mixed question of law and facts” shall be omitted; and

(iv) in the proviso, the expression “or, as the case may be, the Commissioner (Appeals)” and thereafter Explanation shall be respectively omitted;

(b) in sub-sections (2) to (10), the expression “or, as the case may be, the Commissioner (Appeals)”, wherever occurring, shall be omitted;

(d) in sub-section (7), the expressions “or a mixed question of law and facts” and “or, as the case may be, the Commissioner (Appeals)’s order” shall be respectively omitted;

(27) in section 134A, -

(a) in sub-section (11), for the word “If”, the expression “Subject to sub-section (11A), if “ shall be substituted; and

(b) after sub-section (11), amended as aforesaid, the following new sub-sections shall be inserted, namely: -

“(11A) In the case of a state-owned enterprise, if the Committee fails to decide within a period of sixty days, the Board shall reappoint a Committee under sub-section (3), that shall decide the dispute in accordance with sub-section (5) of this section.

(11B) Sub-section (11) shall apply, in case of a state-owned enterprise, if the reappointed Committee fails to decide the matter within a further period of sixty days.“;

(28) in section 138, after sub-section (3), the following new sub-section shall be inserted, namely: -

“(3A) Notwithstanding anything contained in this Ordinance or any other law or any rule, any decision or judgment of any court, forum or authority, the tax payable under any provision of this Ordinance or any assessment order shall become immediately payable subject to the following conditions-

(a) that the case has been decided in the favor of the department at three appellate forums including the High Court;

(b) that the recovery under this section shall only be made to the extent of lowest amount of demand which has been confirmed by any of the three appellate forums; and

and the Commissioner shall proceed to recover the said amount irrespective of the time provided under any other provision or the said decision or judgment.“;

(29) in section 140, after sub-section (6), the following new sub-section shall be inserted, namely: -

“(6A) Notwithstanding anything contained in this Ordinance or any other law or any rule, any decision or judgment of any court, forum or authority, the tax payable under any provision of this Ordinance or any assessment order shall become immediately payable subject to the following conditions-

(a) that the case has been decided in the favor of the department at three appellate forums including the High Court;

(b) that the recovery under this section shall only be made to the extent of lowest amount of demand which has been confirmed by any of the three appellate forums; and

and the Commissioner shall proceed to recover the said amount irrespective of the time provided under any other provision or the said decision or judgment.“;

(30) in section 148, in sub-section (1), in second proviso, for the full stop at the end, a colon shall be substituted and thereafter the following new proviso shall be inserted, namely;-

“Provided also that the Collector of Customs, shall not collect tax under this section, where the recipient of goods is also liable under the Digital Presence Proceeds tax, Act, 2025 and same has been collected by the payment intermediary as defined in section 153.”;

(31) in section 149, after sub-section (1), the following new sub-section shall be inserted, namely: -

“(1A) Notwithstanding the provisions of sub-section (1), any person responsible for paying pension to a former employee who is below the age of seventy years and deriving pension income during a tax year in which the payment exceeds rupees ten million, shall at the time of payment, deduct tax from the amount which is over and above rupees ten million at the rate provided in Division I of Part I of the First Schedule of the Ordinance, along with tax deducted under section 4AB after making adjustment of tax withheld from former employee under other heads and tax credit admissible under sections 61 and 63 of the

Ordinance during the tax year after obtaining documentary evidence, as may be necessary, for -

(i) tax withheld from the former employee under this Ordinance during the tax year; or

(ii) any excess deduction or deficiency arising out of any previous deduction; or

(iii) failure to make deduction during the year.“;

(32) after section 151, the following new section shall be inserted, namely: -

“151A. Gain arising on disposal of certain debt securities.- (1) Every custodian of debt securities including a banking company responsible to maintain Investor Portfolio Securities (IPS) Account on behalf of holder of a debt security shall at the time of disposal of debt securities including government securities deduct tax at the rate specified in Division IIIAA of Part III of the First Schedule on the gross amount of capital gain arising to such holder and deposit the same in government treasury:

Provided that this section shall not apply on disposal of debt securities made through registered stock exchange and which are settled through NCCPL.

(2) The capital gain arising to the holder on disposal of debt security mentioned in sub-section (1) shall be computed in accordance with the formula provided in sub-section (1A) of section 37A of the Ordinance.“;

(33) in section 152, -

(a) in sub-section (1C), for the full stop a colon shall be substituted and thereafter a proviso shall be added namely:-

“Provided that the banking company and financial institution shall not deduct the tax under this sub-section where the recipient is also liable to Digital Presence Proceeds tax and same has been collected.”; and

(b) in sub-section (1D), -

(i) after the word “maintaining”, the words “, for a period not less than six months,” shall be inserted; and

(ii) for the full stop at the end, a colon shall be substituted and thereafter the following proviso shall be added, namely: -

“Provided that in case of holding period of debt instruments and Government securities including treasury bills and Pakistan investment bonds is less than six months, the capital gain arising on the disposal of such securities to the non-resident person shall be taxed at the rates provided in paragraph (2) of Division II of Part III of the First Schedule of the Ordinance.”;

(34) in section 153, -

(a) after sub-section (2), the following new sub-section (2A) shall be inserted, namely: -

“(2A) Notwithstanding the provision of sub-section (1), -

(i) every payment intermediary at the time of processing payment through digital means, on behalf of a seller of

digitally ordered goods or services through locally operated e-commerce platforms (including websites); and

(ii) every courier business providing courier services collecting cash from a buyer under Cash on Delivery (CoD) payment terms on behalf of a seller for the supply of digitally ordered goods and services through e-commerce platforms (including websites);

shall collect tax from the gross amount payable (including sales tax, if any) to the seller at the rate specified in Division IVA of Part I of the First Schedule to the Ordinance and deposit to government treasury.“;

(b) in sub-section (4), after the word “Division”, the words “except in cases of public limited companies where the Commissioner may allow payment without deduction of any tax” shall be inserted;“;

(1) in clause (i), -

(a) in sub-clauses (j) and (k), the word “or” appearing at the end shall be omitted; and

(b) in sub-clause (l), for the full stop occurring at the end, the expression a semi colon shall be substituted and thereafter the following new sub-clauses shall be added, namely: -

“(m) for the purpose of sub-section (2A), a payment intermediary; or

(n) for the purpose of sub-section (2A), a courier service.“;

(2) after clause (ii), the following new clause shall be inserted, namely: -

“(iia) “courier service” means any specialized entity that provides fast, secure and often tracked transportation of documents, packages and small freight, typically offering door-to-door delivery solutions of goods within specific timeframes and in case of digitally ordered goods in e-commerce delivery and collection of cash (CoD) on behalf of the seller and such delivery service provider includes but not limited to -

(a) Logistics services;

(b) ride-haling services;

(d) e-commerce services;

(iib) “payment intermediary” means any third party entity including a banking company, financial institution, a licensed foreign exchange company or payments gateways that facilitate the transfer of funds or payment instructions between two or more parties to enable, process, route or settle payments in a financial transaction, without being

the ultimate source or recipient of the payment;” and

(3) in clause (iii), after the semi colon, appearing at the end, the word “and” shall be added;

(35) in section 159, after sub-section (1A), the following new sub-section shall be inserted, namely: -

“(1B) The Commissioner shall, upon application from a person, in the prescribed form whose income from capital gains is not chargeable to tax under sub-section (1A) of section 37, issue exemption certificate for collection of advance tax under section 236C, in respect of a residential immovable property, which -

(a) has been in the personal use for the last fifteen years;

(b) has been declared by the person in his wealth statement under section 116 for the last fifteen years; and

Provided that the exemption certificate under this section shall be issued once in fifteen years.“;

(36) after section 165B, the following new section shall be inserted, namely:-

“165C. Furnishing of information by online marketplace, payment intermediary and courier service. - (1) Notwithstanding the provisions of section 165 of the Ordinance, every payment intermediary and courier service responsible for deducting tax under sub-section (2A) of section 153 of the Ordinance shall file a quarterly withholding statement to the Commissioner for tax deduction regarding sale of digitally ordered goods and services for each quarter of a tax year in the prescribed form setting out -

(a) name, identification number (NTN/CNIC) and address of the seller;

(b) transaction date, unique identifier (invoice number) and total transaction value;

(d) any other particular may be prescribed.

(2) Every online marketplace in Pakistan shall submit a monthly statement containing name, address, Sales Tax and Income Tax registration number of every vendor registered on its platform supplying digitally ordered goods and services in e-commerce, transactional and aggregated quantum of seller’s monthly turnover and the amount deposited into the vendor’s bank account against such sale transactions.

(3) All the provisions of the section 165 excluding sub-sections (1), (1A) and (6) shall mutatis mutandis apply with respect to the due date of the filing of the withholding statements, revision of the

statements, power to call for statement by the Commissioner, extension of time to furnish the statement after due date, power of the Board, filing of annual withholding statement and reconciliation of the withholding statement with the annual income tax return.“;

(37) after section 175A, the following new section shall be inserted, namely:-

“175AA. Exchange of banking and tax information related to high-risk persons. - (1) Notwithstanding anything contained in any law for the time being in force, including but not limited to the Banking Companies Ordinance, 1962 (LVII of 1962), section 216 of this Ordinance and any regulations made under the State Bank of Pakistan Act,1956 (XXXIII of 1956), -

(a) the Board may share information obtained from the tax declarations with scheduled banks in Pakistan, in respect of persons or classes of persons, for the purpose of cross-matching with the bank data through the data-based algorithms, as may be prescribed; and

(b) the Scheduled banks shall provide to the Board the final results where the banking data is at variance with the algorithms provided under clause (a) of this sub-section.

(2) All information received under this section shall be used only for tax and related purposes and kept confidential.“;

(38) after section 175B, the following new section shall be inserted, namely:-

“175C. Posting of officer of Inland Revenue. - Subject to such conditions and restrictions, as deemed fit to be imposed, the Board or the Chief Commissioner may post an officer of Inland Revenue or such other officials with any designation working under the control of the Board or the Chief Commissioner, to the business premises of any person or class of such persons, to monitor production, supply of goods or rendering of services and the stock of goods not sold at any time for determining tax payable under this Ordinance.”;

(39) in section 181, -

(a) in sub-section (1), after the word “taxpayer”, the expression “including a person selling digitally ordered goods or services from within Pakistan using online marketplace or a courier service, as the case may be,” shall be inserted; and

(b) after sub-section (1), amended as aforesaid, the following new sub-section shall be inserted, namely: -

(1A) Every online marketplace or courier service, involved in e-commerce by supplying or delivering digitally ordered goods or services from within Pakistan, shall not allow any vendor to use its platform services to carry out e-commerce transactions unless such vendors have been registered under this Ordinance.“;

(40) in section 182, in sub-section (1), in the Table, -

(a) against S. No. 1A, -

(i) in column (2), for the expression “165, or 165A, 165A or 165B”, the expression “165, 165A, 165B or 165C” shall be substituted;

(ii) in column (3), for the figure “5000”, the figure “50000” shall be substituted; and

(iii) in column (4), for the expression “165 and 165A, 165A and 165B”, the expression “165, 165A, 165B and 165C” shall be substituted;

(b) after S. No. 12A, the following new S. No and entries relating thereto in columns (2), (3) and (4) shall be inserted, namely: -

(c) against S. No. 15, in column (4), after the expression “Division III”, the expression “, excluding sub-section (2A) of section 153,” shall be inserted; and

(d) after S. No. 15, amended as aforesaid, the following new S. No. and entries relating thereto in columns (2), (3), and (4) shall be added, namely: -

(41) in section 207, in sub-section (1), -

(a) in clause (k), the word “and” shall be omitted; and

(b) in clause (l), after the semicolon, the word “and” and thereafter the following new clause shall be added, namely: -

“(m) auditor appointed under section 222.”;

(42) in section 214A, in the proviso, for the full stop at the end, a colon shall be substituted and thereafter the following new provisos shall be added, namely: -

“Provided further that regardless of anything stipulated in this section, or any provision of this Ordinance, or any other applicable law currently in force, and notwithstanding any decision, order or judgment issued by any forum, authority or court, the maximum period of extension under this section by the Board or the Commissioner, as the case may be, shall not exceed two years in aggregate:

Provided also that where there are reasons to believe that significant loss to exchequer or the taxpayer has been caused by an act of omission or commission by the person or by the Commissioner, a committee of members as notified by the Board may further condone the limitation specified for a period as it may deem fit, after providing a reasonable opportunity of being heard to the person concerned.“;

(43) in section 216, in sub-section (3), -

(a) after clause (b), the following new clause shall be inserted, namely: -

“(ba) to an auditor appointed on contractual basis or engaged through a third party including a payroll firm in the Federal Board of Revenue, after a non-disclosure agreement is made with such auditor as may be prescribed, to assist any authority mentioned in clauses (b) to (g) of sub-section (1) of section 207.”; and

(b) after clause (kc), the following new clauses shall be inserted, namely: -

“(kd) to the Tax Policy Office for the purpose of processing and analyzing data for research and policy analysis; and

(ke) to the recognized universities and international donor agencies subject to the conditions that before sharing, the taxpayer’s data shall be anonymized.“;

(44) in section 218, in sub-section (2), in clause (d), for the word “individual” the word “person” shall be substituted;

(45) in section 222, the existing provision shall be re-numbered as sub-section (1) thereof, and after sub-section (1), numbered as aforesaid, the following new sub-section shall be added, namely: -

“(2) The Board may also appoint as many auditors on contractual basis or through a third-party arrangement, as the case may be, as it deems fit for carrying out the purposes of this Ordinance:

Provided that the total number of auditors appointed under this section shall not be more than two thousand.“;

(46) in section 226, in clause (b), in sub-clause (ii), after the words “Appellate Tribunal”, the expression “, Alternate Dispute Resolution Committee (ADRC)” shall be inserted;

(47) in section 231AB, in sub-section (1), for the expression “0.6%”, the expression “0.8%” shall be substituted;

(48) in the First Schedule, -

(A) in Part I, -

(i) in Division I, in clause (2), for the Table, the following shall be substituted, namely: -

“TABLE

Provided that pension received by an individual from a former employer in a tax year, the rate of tax on such income shall be set out in the following Table namely: -

(ii) in Division IIB, for the TABLE, the following shall be substituted, namely: -

“TABLE

(iii) in Division III, -

(a) for clause (b), the following shall be substituted, namely: -

“(b) 15% in the case of Real Estate Investment Trust and cases other than those mentioned in clauses (a), (ba), (c) and (d); and

(b) after clause (b), substituted as aforesaid, the following new clause shall be inserted, namely: -

“(ba) 25% and 15%, in case of mutual funds, contingent upon proportional income derived from average annual investments in debt securities and equities respectively:

Provided that where the corporate entity is recipient of the dividend, the component derived from the debt securities shall be taxed at the rate of twenty-nine percent.“;

(iv) for Division IIIA, the following shall be substituted, namely:-

“Division IIIA

Rate for Profit on Debt

The rate of tax for profit on debt imposed under section 7B shall be -

(a) 20% of the yield or profit paid by a banking company or financial institution on an account or deposit maintained with such company or institution;

(b) 20% of the yield or profit on Government securities under clause (c ) of sub-section (1) of section 151 paid to any person other than an individual; and

(v) in Division IV, after the word “services”, the words “or fee of offshore digital services” shall be inserted; and

(vi) after Division IV, the following new Division shall be inserted, namely: -

“Division IVA

Rate of Tax on Payments for Digital Transactions in E-commerce Platforms

The rate of tax imposed under section 6A on payment for digitally ordered goods or digitally delivered services through e-commerce platforms including websites shall be in case of payment through -

(i) Digital Means or banking channels by payment intermediary at the rate of 1% of gross amount paid or payable; and

(ii) Cash on Delivery by courier service at the rate of 2% of the gross amount paid or payable.“;

(B) in Part III, -

(i) in Division I, -

(a) for clause (b), the following shall be substituted, namely: -

“(b) 15% in the case of Real Estate Investment Trust and cases other than those mentioned in clauses (a), (ba), (c) and (d); and

(b) after clause (b), substituted as aforesaid, the following new clause shall be inserted, namely: -

“(ba) 25% and 15%, in case of mutual funds, contingent upon proportional income derived from average annual investments in debt securities and equities respectively:

Provided that where the corporate entity is recipient of the dividend, the component derived from the debt securities shall be taxed at the rate of twenty-nine percent;“;

(ii) for Division IA, the following shall be substituted, namely:-

“Division IA

Profit on Debt

The rate of tax to be deducted under section 151 shall be -

(a) 20% of the yield or profit paid by a banking company or financial institution on an account or deposit maintained with such company or institution;

(b) 20% of the yield or profit on Government securities under clause (c ) of sub-section (1) of section 151paid to any person other than an individual; and

(iii) after Division IIIA, the following new Division shall be inserted, namely: -

“Division IIIAA

Gain arising on disposal of certain debt securities

The rate of tax to be deducted under section 151A shall be 15% of the gross amount of the capital gain.“;

(iv) in Division II, -

(a) in paragraph (5), -

(i) in sub-paragraph (i), -

(a) for the figure “4%”, the figure “8%” shall be substituted; and

(b) for the full stop at the end, a colon shall be substituted and thereafter the following new proviso shall be added, namely: -

“Provided that the rate of tax shall be 4% in case of IT services and IT enabled services as defined in section 2.”;

(ii) for sub-paragraph (ii), the following shall be substituted, namely: -

“(ii) in case of rendering of or providing of services other than sub-paragraph (i) shall be 15% of the gross amount payable.”; and

(b) in paragraph (6), in sub-paragraph (i), for the expression “10%”, the expression “15%” shall be substituted; and

(v) in Division III, -

(a) in paragraph (2), -

(i) in sub-paragraph (i), -

(a) for the figure “4%”, the figure “6%” shall be substituted; and

(b) for the full stop at the end, a colon shall be substituted and thereafter

the following new proviso shall be added, namely: -

“Provided that the rate of tax shall be 4% in case of IT services and IT enabled services as defined in section 2.”; and

(ii) for sub-paragraph (ii), the following shall be substituted, namely: -

“(ii) in case of rendering of or providing of services other than sub-paragraph (i) shall be 15% of the gross amount payable:

Provided that in respect of persons making payments to electronic and print media for advertising services the rate shall be 1.5% of the gross amount payable.“; and

(b) in paragraph (3), in sub-paragraph (i), for the expression “10%”, the expression “15%” shall be substituted; and

“(3A) The rate of tax to be deducted from a payment referred to in sub-section (2A) of section 153 for digitally ordered goods or digitally delivered services through e-commerce platforms including websites shall be in case of payment through -

(i) Digital Means or banking channels by payment intermediary at the rate of 1% of gross amount paid or payable;

(ii) Cash on Delivery by courier service at the rate of 2% of gross amount paid or payable:

(A) for Division X, the following shall be substituted, namely:-

“Division X

Advance tax on sale or transfer of immovable property

The rate of tax to be collected under section 236C shall be as set out in the following table:-

TABLE

(B) in Division XVIII, for the Table, the following shall be substituted, namely: -

(49) in the Second Schedule, -

(A) in Part I, -

(i) clause (8) and sub-clause (i) of clause (9) shall be omitted;

(ii) in clause 57, after sub-clause (3), the following new sub-clause (4), shall be added, namely;-

“(4) any income of the following funds, institutions, foundations and trusts, namely:-

TABLE

(iii) after clause (65A), the following new clause shall be inserted, namely: -

“(65B) Any monetary award received from the Federal or Provincial Government or from a Public Office holder by a sportsperson winning a medal in international Olympic Games representing Pakistan:

Provided that this clause shall be applicable from tax year 2025.“;

(iv) for clause (66), the following shall be substituted, namely:-

“(66) Subject to the provisions of section 100C, any income, derived by the following institutions, foundations, societies, boards, trust and funds, namely:-

TABLE

(v) after omitted clause (98A), the following new clause shall be added, namely: -

“(98AA) Any income derived by ICC Business Corporation (IBC) or International Cricket Council (ICC) or employees, officials, agents and representatives of IBC and ICC, officials from ICC members, players, coaches, medical doctors and officials of member countries, IBC partners and media representatives, other than persons who are resident of Pakistan, from ICC champions Trophy, 2025 hosted in Pakistan.”;

(vi) in clause (126E), after the word “operation”, the expression “or up to the 30th day of June, 2035, whichever is earlier” shall be inserted;

(vii) in clause (126EA), in sub-clause (b), after the word “Authority”, occurring for the second time, the expression “or up the 30th day of June, 2035, whichever is earlier” shall be inserted;

(viii) in clause (145A), for the figure “2025”, the figure “2026” shall be substituted; and

(ix) in clause (151), for the full stop a colon shall be substituted and thereafter the following proviso shall be added, namely:-

“Provided that the exemption under this clause shall be available to a person till 30th June, 2030 or five years from commencement of cinema operations whichever is earlier.”; and

(x) clause (152) shall be omitted;

(B) in Part II, -

(i) clauses (9AC) and (24CA) shall be omitted; and

(ii) after clause (24CA), omitted as above, the following new clause shall be inserted, namely: -

“(24CB) The rate of tax under clauses (b) and (c) of sub-section (1) of section 153 and sub-section (1) of section 236A to be deducted and collected from the National Logistics

Corporation shall be 3% of the gross amount of payment and gross sale price of a lease of the right to collect tolls, respectively:

Provided that the tax so deductible and collected shall be minimum tax and in case the normal income tax, chargeable under Division II of Part I of the First Schedule on the taxable income of the taxpayer, is higher than the amount of tax under this clause, the taxpayer shall be liable to pay the normal income tax.“;

“(3A) The tax payable by a full-time teacher or a researcher, employed in a non-profit education or research institution duly recognized by Higher Education Commission, a Board of Education or a University recognized by the Higher Education Commission, including government research institution, shall be reduced by an amount equal to 25% of tax payable on his income from salary:

Provided that this clause shall not apply to teacher of medical profession who derive income from private medical practice or who receive share of consideration received from patients:

Provided further that the provision of this clause shall be deemed to have been in force with effect from the first day of July, 2022 and shall cease to have effect after tax year 2025.“;

(D) in Part IV, -

(i) clauses (12F), (12G) and (12J) shall be omitted;

(ii) in clause (56), after sub-clause (xix), the following new sub-clause shall be added, namely: -

“(xx) Import of Cystagon, Cysta drops and Trientine capsules”;

(iii) after clause (104), the following new clause shall be inserted, namely: -

“(104A) The provisions of section 4C shall not apply on capital gain derived from the disposal of one residential immovable property, if the property -

(a) has been in the personal use of the person for the last fifteen years;

(b) has been declared by the person in his wealth statement under section 116 for the last fifteen years; and

Provided that this clause shall apply once in fifteen years.“;

(iv) in clause (105A), for the words “shall not apply to a person whose income tax affairs have been audited in

any of the preceding four tax years”, the words “for selection of a person for audit shall not apply whose income tax affairs have been selected for audit in any of the preceding three tax years” shall be substituted; and

(v) in clauses (109A) and (110), for the figure “2025”, the figure “2026” shall be respectively substituted;

(50) in the Seventh Schedule, in rule (1), -

(a) after clause (a), the following new clause shall be inserted, namely: -

“(aa): Where a taxpayer incurs expenditure on leasehold improvements in respect of leased or rented property, the amount so incurred, as reflected in the audited accounts, shall be capitalized and amortized at the rate of ten percent (10%) per annum:

(i) amortization under this clause shall commence from the date on which the leasehold improvements are first put to use by the taxpayer; and

(ii) in the event of termination of the lease prior to the completion of the amortization period, the unamortized balance of the capitalized leasehold improvements shall be allowed as a deduction in the tax year in which such termination occurs, after setting off any proceeds received from the disposal or transfer of such leasehold improvements.“;

(b) after clause (b), the following new clause shall be inserted, namely:-

“(ba) Notwithstanding anything contained in any applicable financial reporting standard, including International Financial Reporting Standard (IFRS) 16, the depreciation on right-of-use assets and the finance cost relating thereto shall not be admissible as a deduction. In lieu thereof, the actual rent expense incurred during the tax year shall be allowed as an expense, subject to the condition that the banking company furnishes a certificate from its external auditor to the effect that such rent expense has been actually incurred during the tax year:

Provided that, in view of the implementation of IFRS 16 with effect from the tax year 2020, where a banking company has claimed excess deductions on account of right-of-use asset depreciation and related finance costs in prior tax years, the differential amount, being the excess of such deductions over the actual rent expense incurred, shall be offered to tax in the tax year 2025;

Provided further that, where the deduction claimed in respect of right-of-use asset depreciation and related finance cost in the prior tax years is less than the actual rent expense incurred, the differential amount shall be allowed as an admissible expense in the tax year 2025:

Explanation. - The adjustments specified in the foregoing provisos shall be duly certified by the external auditor of the banking company.”

(i) in second proviso, for the full stop at the end a colon shall be substituted and thereafter, the following new proviso shall be inserted, namely: -

“Provided also that the certificate from the external auditor shall be complete in all respects and shall on prescribed format containing following-

(i) the amount of provision, category-wise, allowed in accordance with the Prudential Regulations issued by the State Bank of Pakistan;

(ii) the amount of provision, category-wise, recognized under the International Financial Reporting Standard (IFRS) 9;

(iii) the amount of provision, category-wise, as disclosed in the annual accounts of the banking company; and

(iv) the amount of provision, category-wise, which is eligible for deduction under clauses (c), (d), (da), (e) and (f) of Rule 1 of this Schedule, and the certificate shall specifically identify and certify such amount, confirming its consistency with the

applicable regulatory framework, the Seventh Schedule, and financial reporting standards.

Explanation - For removal of the doubt, it is further clarified that in case of non-filing of certificate or incomplete filing of certificate at the time of filing of return, the provisions under rule 1 (c) shall not be admissible and requirements specified herein, shall apply in respect of tax year 2025 and onwards.“; and

(ii) in explanation at serial no. (ii), the word “and” shall be omitted, and after serial no. (iii), for the full stop the expression “; and” shall be inserted and the following new serial numbers shall be inserted, namely: -

“(iv) only such provisions in respect of non-performing advances as are classified as “loss”, in accordance with and based upon the Prudential Regulations issued by the State Bank of Pakistan shall be admissible as an expense under clause (c) of Rule 1 of this Schedule; and

(v) any provision including general provision made otherwise than in accordance with the aforesaid Prudential Regulations shall not be admissible as a deduction in computing the taxable income of a banking company under this Schedule.”

(d) after clause (f), the following new clause shall be inserted, namely: -

“(fa) the auditor’s certificate, as required under clause (c), shall be on the following format, namely:-

[On the Letterhead of the External Auditor-Chartered Accountant Firm]

CERTIFICATE UNDER RULE 1(C) OF THE SEVENTH SCHEDULE TO THE INCOME TAX ORDINANCE, 2001 FOR TAX YEAR ____________

To:

The Commissioner Inland Revenue, Zone-, Federal Board of Revenue,

I, the undersigned statutory auditor of [Name of Banking Company], having conducted the audit of the annual financial statements for the year ended [insert date], in accordance with the applicable auditing standards and the requirements of the Prudential Regulations issued by the State Bank of Pakistan (SBP), the International Financial Reporting Standard (IFRS) 9, and the Seventh Schedule to the Income Tax Ordinance, 2001, hereby certify the following:

We further certify that the above amounts have been derived from and are consistent with:

(i) The relevant provisions of the Prudential Regulations of SBP;

(ii) IFRS 9 and applicable financial reporting frameworks;

(iii) The disclosures made in the audited financial statements of the banking company; and

(iv) The eligibility criteria specified in clause (c), (d) and (e) of Rule 1 of the Seventh Schedule to the Income Tax Ordinance, 2001.

This certificate is issued specifically for the purpose of compliance with the proviso to Rule 1(c) of the Seventh Schedule to the Income Tax Ordinance, 2001, as applicable for the tax year 2025 and onwards.

For and on behalf of

[Name of Audit Firm and Signing Partner]

Chartered Accountants”; and

(e) in clause (g), -

(a) before the word “Adjustment”, the expression “Subject to the aforesaid clauses of rule 1 of this Schedule” shall be inserted;

(b) for the expression “any applicable accounting standard” the expression “the application of International Financial Reporting Standard IFRS-09 (Financial Instruments),” shall be substituted;

(d) before the explanation, the following proviso shall be inserted;

“Provided that the provisions of this clause, to the extent of the amendments made herein, shall apply in respect of the tax year 2025 and onwards.”;

(51) in the Tenth Schedule, -

(a) in rule 1, -

(i) in the second proviso, in the TABLE, in column (1), against S. Nos (1), (2) and (3), in column (3), for the figure “12%”, “16%” and “20%”, the figure “10.5%”, “14.5%” and “18.5%” shall be respectively substituted; and

(ii) in the third proviso, in the TABLE, in column (1), -

(A) S. No. 1 and entries relating thereto in columns (2), (3) and (4) shall be omitted; and

(B) against S. No. 2, in column (4), for the figure “10%”, the figure “11.5%” shall be substituted;

(b) in rule 1A, -

(i) in clause (a), in the table, in column (1), against S. Nos (1), (2) and (3), in column (3), for the figure “6%”, “7%” and “8%”, the figure “7.5%”, “8.5%” and “9.5%” shall be respectively substituted; and

(ii) in clause (b), in the table, in column (1), against S. Nos (1), (2) and (3), in column (3), for the figure “6%”, “7%” and “8%”, the figure “4.5%”, “5.5%” and “6.5%” shall be respectively substituted;

(c ) in rule 10, in sub-rule (y), for the expression “37A.”, the expression “37A on disposal of securities acquired on and from 1st day of July, 2025;” shall be substituted; and

(52) after Fourteenth Schedule, the following new schedule shall be inserted, namely:-

“The Fifteenth Schedule

[See section 114C]

Threshold for Economic Transactions

For the purposes of section 114C of the Ordinance, the threshold of the economic transactions specified herein, to be applied in respect of ineligible persons shall be determined as follows

Where every payment intermediary and social media platform, who fails to submit the statement required under section 8 or section 9 of this Act, with respect to digitally ordered services and goods or advertisements relayed in Pakistan shall be liable to a penalty of one million rupees for each default.

11. Amendments in the Federal Excise Act, 2005

In the Federal Excise Act, 2005, the following further amendments shall be made, namely: -

(1) in section 3, in sub-section (5), -

(a) in clause (c), the word “and”, occurring at the end, shall be omitted; and

(b) in clause (d), for the full stop at the end, the expression “; and” shall be substituted and thereafter the following new clause shall be added, namely: -

“(e) in any other case, of the person including any middle man as may be specified under the provisions of this Act.”;

(2) in section 26, in sub-section (1), after the word “thereunder”, the expression “or such goods without affixing or affixing counterfeit tax stamps, bar codes, banderoles, stickers, labels or bar codes, as required under section 45A of this Act” shall be inserted;

(3) in section 27,-

(a) in sub-section (1), after the word “counterfeiting”, the expression “or such goods without affixing or affixing counterfeited tax stamps, banderoles, stickers, labels or barcodes, as required under section 45A of this Act” shall be inserted; and

(b) after sub-section (3), the following new sub-section (4) shall be added, namely:-

“(4) Without prejudice to the foregoing provisions of this section, the Board in case of goods subject to monitoring under section 45A of this Act and counterfeited goods, may authorize any officer of Revenue department not below the rank of Naib Tehsildar or Excise and Taxation Officer not below the rank of BPS-16 to exercise the powers and perform the functions of the Officer of Inland Revenue under section 26 and sub-section (1) of section 27, by notification in the official Gazette subject to such conditions, if any, it may deem fit to be imposed.”;

(4) in section 33,-

(i) in sub-section (1), after the words “other than”, the expression “an SOE or” shall be inserted and the expression “if the value of the assessment or, as the case may be, refund of the tax does not exceed five million rupees” shall be omitted; and

(ii) after sub-section (4), the following new sub-section shall be added, namely:-

“(5) Registered person shall have an option to directly file an appeal before Appellate Tribunal Inland Revenue without availing right of appeal under this section.”;

(5) section 33A shall be omitted;

(6) in section 34, for sub-section (1), the following shall be substituted, namely:-

“(1) Any person, other than an SOE, aggrieved by any order passed by the Board or the Commissioner Inland Revenue under section 35 or an order passed by an Officer of Inland Revenue where sub-section (5) of section 33 applies or the Commissioner (Appeals) under this Act or the rules made thereunder may, within thirty days of the receipt of such order, prefer an appeal to the Appellate Tribunal:

Provided that where sub-section (11) of section 134A of the Income Tax Ordinance, 2001 (XLIX of 2001) shall apply, an SOE may prefer an appeal under this sub-section.“;

(7) in section 34A, for sub-section (1), the following shall be substituted, namely:-

“(1) Within sixty days of the order of the Appellate Tribunal, the aggrieved person or the Commissioner may make a reference in the prescribed form along with a statement of the case and complete record of the Appellate Tribunal to the High Court, stating any question of law arising out of such order.”; and

(8) in the First Schedule: -

(a) in Table-I, in column (1), after S. No. 63 and entries relating thereto in columns (2), (3) and (4), the following new S. No. shall be added, namely: -

(b) Table-III, serial number 1 and entries relating thereto in columns (2), (3) and (4) shall be omitted: and

(9) in the Third Schedule, in Table-1, S. No. 23, occurring for the second time, shall be re-numbered as S. No. 27.

The payment intermediary shall suspend the remittances of proceeds of such foreign vendors if it is reported to them by Commissioner that such vendors are advertising continuously for one hundred and twenty days without the payment of this tax by the foreign vendor:

Provided that this suspension shall be in addition to the recovery under section 7 for violation of section 6.

Chapter VI - Appeals

12. Enactment of the Digital Presence Proceeds Tax Act, 2025

There is hereby enacted the Digital Presence Proceeds Tax Act, 2025, in the manner as follows:-

Act

for the enactment of Digital Presence Proceeds Tax Act, 2025

Whereas the rapid digitization of the global economy has fundamentally transformed traditional business models, enabling multinational enterprises particularly those in digital sector to generate substantial revenues and profit from jurisdictions where they maintain little or no physical presence;

AND Whereas the current international tax framework, designed in the early 20th century, relies on concepts of physical presence and permanent establishment that fail to capture the value created through digital interactions, user data, and intangible assets within market jurisdiction;

AND Whereas this misalignment has resulted in significant tax base erosion for nations, as profits generated from local users, data, and digital engagement are shifted to low-tax jurisdictions, undermining fiscal sovereignty and the principle of “value creation” as the cornerstone of equitable taxation;

AND Whereas objection to Digital Service Tax overlook the failure of existing rules to adapt to the digital economy and the legitimate right of nations to safeguard their revenue until a unified solution is achieved.

Now, therefore, the introduction of Digital Presence Proceeds Tax Act, 2025 stands as necessary, justified and proportionate measure to ensure tax fairness and protect public revenue.

It is hereby enacted as follows; -

Chapter I - Preliminary

(1) A person dissatisfied with any order of recovery under this Act can file an appeal with the Appellate Tribunal Inland Revenue within thirty days from the receipt of the order.

(2) Within sixty days of the receipt of the order of the Appellate Tribunal Inland Revenue an aggrieved person or the Commissioner may prefer a reference in the prescribed along with the statement of the case and complete record of the appellate tribunal to the High Court stating any question of law arising out of such order.

Chapter VII - Miscellaneous

13. Administration of this Act

The Inland Revenue Department of the Board and its subordinate offices shall act as tax administrator for the carrying out the purposes under this Act.

There is hereby enacted the New Energy Vehicles Adoption Levy Act, 2025, in the manner as follows:-

Act

to provide for imposition and collection of levy on internal combustion engine vehicles to promote adoption of new energy vehicles

WHEREAS it is expedient to provide for imposition and collection of levy on internal combustion engine vehicles to promote adoption of new energy vehicles and matters connected therewith and ancillary thereto

It is hereby enacted as follows:-

14. Power to make rules

The Board may prescribe rules for the purposes of giving effect to the provisions of this Act and for the removal of any difficulty or matter ancillary thereto.

14AD. Bar on transfer of immoveable property

(1) Where the person fails to obtain registration within fifteen days from issuance of order under sub-section (4) of section 14AC, the Chief Commissioner shall constitute a committee comprising the Chief Commissioner, Commissioner and one member from the Chamber of Commerce or a Trade Associations, as the case may be.

(2) The committee shall issue a notice to such unregistered person which shall also be prominently displayed at the business premises of the person.

(3) The committee after affording a personal hearing to the person shall either recommend for imposition of bar on transfer of immovable property or recommend to the Commissioner to remove the bar imposed under section 14AC.

(4) For imposition of bar on transfer of immovable property, the committee shall recommend to the Commissioner for imposition of bar on transfer of immovable property:

Provided that the committee shall provide an opportunity to obtain registration within fifteen days prior to the recommendation.

(5) The Commissioner shall have the powers to direct the property registering authority, through an order in writing, to bar transfer of immoveable property of any person who fails to obtain registration after lapse of fifteen days.

(6) Upon registration of such person, the Commissioner shall issue and convey order for removal of bar on transfer of immovable property not later than two working days.

(7) Any person, aggrieved by the decision or order passed may, within thirty days of the date of receipt of such decision or order prefer an appeal before the Chief Commissioner Inland Revenue who is not member of the committee.

(8) The provisions of this section shall come into force on such date as may be notified by the Board.

14AE. Other measures for non-registration

(1) Subject to prior action under section 14AC and 14AD, any person who fails to get registered for the purposes of this Act, the Chief Commissioner shall have the powers to–

(a) seal the business premises;

(b) seize moveable property; or

(2) Action under sub-section (1) shall not be carried out, unless-

(a) a public notice is issued specifying the date from which the premises shall be sealed, or movable property is seized, or a receiver is appointed for the management of the taxable activity;

(b) a committee comprising the Chief Commissioner, the Commissioner concerned and a representative from the Chambers of Commerce or Trade Associations, provides an opportunity of being heard to the person through an open court; and

(3) Upon registration, of such person the Chief Commissioner shall reverse the order issued under sub-section (1) not later than two working days.

(4) Any person, aggrieved by any decision or order passed under sub-section (1), may within thirty days of the date of receipt of such decision or order, prefer representation before the Board.

(5) All or any of the provisions of this section shall come into force on such date as the Board may notify in the official Gazette.“;

(9) in section 21, -

(i) after sub-section (2), the following new sub-section shall be inserted, namely: -

“(2A) The Commissioner shall, within ten days of issuance of order of suspension, issue a show cause notice to the registered person. Upon receipt of the reply to the notice and after giving an opportunity of hearing to the registered person, if the Commissioner is satisfied, he may order for revoking of suspension of the registered person or issue an appealable speaking order for blacklisting of the registered person within thirty days of receipt of the reply to the notice.”; and

(ii) sub-section (5) shall be omitted;

(10) in section 23, -

(i) in sub-section (1), in clause (g), after the second proviso, the following new proviso shall be inserted, namely: -

“Provided also that where any goods are transported or supplied, the registered person shall ensure the generation and linkage of the tax invoice with the e-Bilty generated under section 40C of this Act and section 83C of the Customs Act, 1969.”; and

(ii) after sub-section (4), the following new sub-sections shall be added, namely: -

“(5) The Board through notification in the official Gazette, may require any person or class of persons to integrate their electronic invoicing system with the Board’s Computerized System for real time reporting of sales in such mode and manner and from such date as may be specified therein.

(6) Licensed integrator shall integrate electronic invoicing system of registered persons referred to in sub-section (5) in such mode and manner as may be prescribed:

Provided that from such date, and in such mode and manner, as prescribed by the Board, all Tier-1 retailers shall integrate their retail outlets with Board’s computerized system for real-time reporting of sales.“;

(11) in section 26,-

(i) in sub-section (1), in the third proviso, for the full stop at the end, a colon shall be substituted and thereafter the following new provisos shall be added, namely: -

“Provided also that every online marketplace shall furnish not later than the due date a true, complete and correct monthly statement in the prescribed form, indicating the supplier-wise amount paid and tax due and such other information of the taxable supplies of digitally ordered goods irrespective of the economic ownership of the supplies from within Pakistan:

Provided further also that every payment intermediary and courier shall furnish not later than the due date a true, complete and correct monthly statement in the prescribed form, indicating the supplier-wise amount paid and tax due and such other information for taxable supplies of digitally ordered goods from within Pakistan through an online market place, website and software application and delivering goods using its payment platform or courier service as the case may be.“; and

(ii) in sub-section (3), for the colon occurring at the end, a full stop shall be substituted and thereafter the proviso shall be omitted; and

(iii) after sub-section (3), amended as aforesaid, the following sub-section (3A) shall be inserted, namely: -

“(3A) Unless restricted by the compliance risk management system of the Board, the approval under sub-section (3), shall not be required if revised return is filed within sixty days of filing of return and the tax payable therein is more than the amount paid or the refund claimed therein is less than the amount as claimed, under the return sought to be revised.”;

(12) after section 32A, the following new section shall be inserted, namely:-

“32B. Appointment of experts and auditors. - (1) The Board or the Commissioner may appoint as many experts as it or the Commissioner considers necessary for the purposes of this Act,

including for the purposes of assistance in audit, investigation, litigation or valuation.

(2) The Board may appoint as many auditors as it may deem fit, through direct engagement or through a third party including a pay roll firm for the purposes of this Act, and confer such powers as may be deemed necessary to assist the authorities mentioned in clauses (a) to (f) of sub-section (1) of section 30 of this Act and clauses (a) to (f) of sub-section (1) of section 29 of the Federal Excise Act, 2005, as per the terms, conditions, limitations and restrictions as may be prescribed.“;

(13) in section 33, -

(i) in Chapter VII, for marginal heading “Offences and penalties”, the expression “Offences, penalties and punishment” shall be substituted; and in the heading, for the expression “Offences and Penalties”, the expression “Offences, Penalties and Punishment” shall be substituted;

(ii) in the Table, in column (2), after the expression “penalty” and “Penalties”, wherever occurring, the expression “and Punishment” shall be inserted;

(iii) after S. No. 1, the following new S. No. and entries relating thereto in columns (1), (2) and (3) shall be inserted, namely:-

(iv) S. No. 11, and entries relating thereto in columns (1), (2) and (3) shall be omitted;

(v) for S. No. 13 and entries relating thereto in columns (2) and (3), the following shall be substituted, namely:-

(vi) after S. No. 13, substituted as aforesaid, the following new S. No. and entries relating thereto in columns (2) and (3) shall be inserted, namely: -

(vii) S. No. 22, and entries relating thereto in columns (1), (2) and (3) shall be omitted;

(viii) in S. No. 25A,-

(a) for the expression “sub-section (9A) of section 3”, wherever occurring, the expression “section 23” shall be substituted; and

(b) in column (1), after the word “thereunder”, the words “or fails to issue electronic invoices after integration” shall be added;

(ix) after S. No. 25AA, the following new S. No. and entries relating thereto in columns (2) and (3) shall be inserted, namely:-

(14) in section 37, after sub-section (3), the following new sub-section (4) shall be added, namely:-

“(4) For the purpose of an inquiry under this Act, the officer of Inland Revenue shall have the powers of a civil court trying a suit under the Code of Civil Procedure, 1908 (Act No. V of 1908), in respect of the following matters, namely:-

(a) summoning and enforcing the attendance of any person and examining him on oath; and

(b) requiring the discovery and production of documents and receiving evidence on affidavits.“;

(15) for section 37A, the following shall be substituted, namely:-

“37A. Power to inquire, investigate offences warranting prosecution under this Act and Arrest of a person.- (1) Notwithstanding anything contained in Section 11E of this Act, an officer of Inland Revenue not below the rank of assistant commissioner or any other officer authorized by the Board in this behalf on the basis of material evidence pointing to the commission of tax fraud or an offence warranting prosecution under this act may initiate an inquiry upon approval by the Commissioner.

(2) For the purpose of an inquiry under this Act, the officer of Inland revenue shall have the powers of a civil court trying a suit under the Code of Civil Procedure,1908(Act No. V of 1908), in respect of the following matters, namely: -

(a) summoning and enforcing the attendance of any person and examining on oath; and

(b) requiring the discovery and production of documents and receiving evidence on affidavits.

(3) The officer of inland revenue shall complete the inquiry while exercising the powers under the provisions of section 37, 38, 38A, 38B, 40 or any other section of the Act, wherever required within six months.

(4) During inquiry proceedings, the officer of inland revenue shall give an opportunity of being heard to the person whose actions alleged to have caused tax fraud warranting prosecution under this Act, confronting the person the details of tax fraud committed or caused to be committed by such person for explanation.

(5) The officer of inland revenue shall submit inquiry report along with reasons to be recorded in writing indicating the amount involved in tax fraud worked out as a result of such inquiry to the Commissioner to obtain prior approval for investigation or the closure of inquiry without any further investigation.

(6) The Commissioner, on the basis of inquiry report under sub-section (5) and after recording reasons in writing, shall either -

(i) approve initiation of investigation, or

(ii) require the officer of Inland Revenue to submit such further information or documents as he may direct for his decision; or

(iii) close the inquiry by rejecting the report or accepting the report, as the case may be.

(7) After approval of investigation under sub-section (6), the officer of inland revenue shall complete investigation within three months and prepare investigation report for submission before the competent court.

(8) The three-member committee notified by the Chairman, may authorize the Commissioner to issue warrant of arrest of a person, if it is satisfied on the basis of facts brought before it, that

(a) the tax fraud falls within the ambit of sub-clauses (a), (b), (c), (d), (e) and (f) of clause (37) of section 2;

(b) the amount involved in tax fraud exceeds fifty million rupees; and

(i) the accused is intentionally or willfully not joining the investigation after three duly served notices;

(ii) the accused is attempting to abscond; or

(iii) there are sufficient grounds that the accused would temper with the evidence.

(9) Notwithstanding anything contained in sub-section (8), the officer of inland revenue may arrest a person alleged to have committed a tax fraud after obtaining an arrest warrant from the Special Judge in a case of a fraud falling within the ambit of the subclauses of clause (37) of section 2 during the course of investigation if:-

(i) the accused is intentionally or willfully not joining the investigation after three duly served notices;

(ii) the accused attempting to abscond; or

(iii) there are sufficient grounds that the accused would temper with the evidence.

(10) Where the person suspected of tax fraud or any offence warranting prosecution under this Act is a company, every director or officer of that company whom the officer of inland revenue has reason to believe is personally responsible for actions of the company contributing the tax fraud or any offence warranting prosecution under this Act shall be liable to arrest; provided that any arrest under this sub-section shall not absolve the company from the liabilities of payment of tax, default surcharge and penalty imposed under this Act.

(11) Notwithstanding anything contained in this Act, where any person has committed a tax fraud or any offence warranting

prosecution under this Act, the Commissioner may, either before or after the inquiry or investigation, compound the offence if such person pays the amount of tax evaded or sought to be evaded as determined in the inquiry or the investigation along with default surcharge and penalty as provided under this Act.

(12) Any person accused of an offence who is arrested under this Act shall at the time of arrest be informed of the grounds of arrest in writing on the basis of which he has been arrested.

(13) All arrests made under this Act shall be carried out in accordance with the relevant provisions of the Code of Criminal Procedure, 1898 (Act V of 1898):

Provided that no arrest under this section shall be made before the completion of inquiry under sub-section (1) of this section.

(14) The accused arrested may approach the competent court for his release on bail under the provisions contained in sections 497 and 498 of the Code of Criminal Procedure, 1898 (Act V of 1898).

(15) The purpose of prosecution under the provisions of sections 37A and 37B of this Act shall remain to -

(a) create sufficient deterrence against tax fraud; and

(b) provide for retribution for commission of tax fraud.“;

(16) for section 37B, the following shall be substituted, namely:-

“37B. Procedure to be followed on arrest of a person.- (1) Where an officer of Inland Revenue arrests a person under Section 37A, he shall immediately intimate the fact of the arrest of that person to the Special Judge who may direct such Officer to produce that person at

such time and place and on such date as the Special Judge considers expedient and such Officer shall act accordingly.

(2) Notwithstanding anything contained in the sub-section (1), any person arrested under this Act shall be produced before the Special Judge or, if there is no Special Judge within a reasonable distance, to the nearest Judicial Magistrate, within twenty-four hours of such arrest, excluding the time necessary for the journey from the place of arrest to the Court of the Special Judge or, as the case may be, of such Magistrate.

(3) Where a person is produced under sub-section (2) before the Special Judge, he may, on the request of such person, after perusing the record, if any and after giving the prosecution an opportunity of being heard, admit him to bail on his executing a bond, with or without sureties, or refuse to admit him to bail and direct his detention at such place as he deems fit:

Provided that nothing herein contained shall preclude the Special Judge from cancelling the bail of any such person at a subsequent stage if, for any reason, he considers such cancellation necessary, but before passing such order he shall afford such person an opportunity of being heard, unless for reasons to be recorded he considered that the affording of such opportunity shall defeat the purposes of this Act.

(4) When such person is produced under sub-section (2) before a Judicial Magistrate, such Magistrate may, after authorising his detention in such custody at such place and for such period as he

considers necessary or proper for facilitating his earliest production before the Special Judge, direct his production before the Special Judge on a date and time to be fixed by him or direct such person to be forthwith taken to, and produced before, the Special Judge and he shall be so taken.

(5) Nothing in sub-section (3) or sub-section (4) shall preclude the Special Judge or the Judicial Magistrate from remanding any such person to the custody of an officer of Inland Revenue] holding investigation against that person if such officer makes a request in writing to that effect, and the Special Judge or the Judicial Magistrate, after perusing the record, if any, and hearing such person, is of the opinion that for the completion of inquiry or investigation it is necessary to make such order:

Provided that in no case the period of such custody shall exceed fourteen days.

(6) When any person is arrested under this Act, an officer of Inland Revenue shall record the fact of arrest and other relevant particulars in the register specified in sub-section (10) and shall immediately proceed to investigate into the charge against such person and if he completes the investigation within twenty-four hours of his arrest, excluding the time necessary for journey as aforesaid, he may, after producing such person before the Special Judge or the nearest Judicial Magistrate, make a request for his further detention in his custody.

(7) While holding an investigation under sub-section (6), an officer of Inland Revenue shall exercise the same powers as are exercisable

by an officer in charge of a police station under the Code of Criminal Procedure, 1898 (Act V of 1898), but such officer shall exercise such powers subject to the foregoing provisions of this section while holding an investigation under this Act.

(8) If an officer of Inland Revenue, after holding an investigation as aforesaid, is of the opinion that there is no sufficient evidence or reasonable ground for suspicion against such person, he shall release him on his executing a bond, with or without sureties, and shall direct such person to appear, as and when required, before the Special Judge, and make a report to the Special Judge for the discharge of such person and shall make a full report of the case to his immediate superior.

(9) The Special Judge to whom a report has been made under sub-section, (8) may, after the perusal of record of the investigation, and hearing the prosecution, agree with such report and discharge the accused or, if he is of the opinion that there is sufficient ground for proceedings against such person, proceed with his trial and direct the prosecution to produce evidence.

(10) An officer of Inland Revenue empowered to hold investigation under this section shall maintain a register to be called “Register of Arrests and Detentions” in the prescribed form in which he shall enter the name and other particulars of every person arrested under this Act, together with the time and date of arrest, the details of the information received, the details of things, goods or documents, recovered from his custody, the name of the witnesses and the explanation, if any, given

by him and the manner in which the investigation has been conducted from day to day; and, such register or authenticated copies of its aforesaid entries shall be produced before the Special Judge, whenever such Officer is so directed by him.

(11) After completing the investigation, an officer of Inland Revenue shall, as early as possible, submit to Special Judge a report in the same form and manner in which the officer in charge of a police station submits a report, before a court.

(12) Magistrate of the first class may record any statement or confession during investigation under this Act, in accordance with the provisions of Section 164 of the Code of Criminal Procedure, 1898 (Act V of 1898).

(13) Without prejudice to the foregoing provisions of this section, Board, with the approval of the Federal Minister-in-charge, may, by notification in the official Gazette, authorize any other officer working under the Board to exercise the powers and perform the functions of an officer of Inland Revenue under this section, subject to such conditions, if any, that it may deem fit to impose.“;

(17) in section 38B, after sub-section (4), the following new sub-section (5) shall be added, namely:-

“(5) Notwithstanding anything contained in any other law for the time being in force, the Commissioner may, by notice in writing, require any Internet Service Providers, Telecommunication Companies and Pakistan Telecommunication Authority, to furnish subscriber’s information pertaining to the Internet Protocols in connection with any

inquiry or investigation in cases of tax fraud, as may be specified in such notice.“;

(18) in section 40C,-

(i) in sub-section (2), after the expression “bar codes,”, the expression “production monitoring, video analytics,” shall be inserted;

(ii) in sub-section (3), after the words “bar codes”, the expression “,monitoring equipment” shall be inserted;

(iii) for sub-section (4), the following shall be substituted, namely:-

“(4) Notwithstanding anything contained in this Act or any other law for the time being in force, the provisions of section 83C of the Customs Act, 1969 (IV of 1969) shall mutatis mutandis apply.”; and

(iv) sub-section (5) shall be omitted;

(19) section 43A shall be omitted;

(20) in section 45B, for sub-section (1), the following shall be substituted, namely:-

“(1) Any person, other than an State Owned Enterprises (SOE), aggrieved by any decision or order passed under sections 10,11A,11D, 11E, 11F ,21,33, 34 and 66 of this Act, by an officer of Inland Revenue may, within thirty days of the date of receipt of such decision or order prefer appeal to the Commissioner Inland Revenue (Appeals):

Provided that an appeal preferred after the expiry of thirty days may be admitted by the Commissioner Inland Revenue (Appeals) if he

is satisfied that the appellant has sufficient cause for not preferring the appeal within the specified period:

Provided further that registered person shall have an option to directly file an appeal before Appellate Tribunal Inland Revenue without availing right of Appeal under this section.“;

(21) in section 46, for sub-section (1), the following shall be substituted, namely:-

“(1) Any person including an officer of inland revenue not below the rank of Additional Commissioner aggrieved by an order of the Commissioner (Appeals) under this Act or the rules made thereunder; or any person other than SOE aggrieved by an order passed by officer of inland revenue when second proviso to section 45B applies, may within thirty days of the receipt of such order, prefer an appeal to the Appellate Tribunal:

Provided that where sub-section (11) of section 134A of Income Tax Ordinance, 2001 (XLIX of 2001) shall apply, an SOE may prefer an appeal under this sub-section.“;

(22) in section 47, for sub-section (1), the following shall be substituted, namely:-

“(1) Within sixty days of communication of the order of the Appellate Tribunal, the aggrieved person or the Commissioner may submit a reference in the prescribed form along with a statement of the case and complete record of the Appellate Tribunal to the High Court, stating any question of law arising out of such order.”;

(23) in section 56B, in sub-section (1), after the word “servant”, the expression “, expert or auditors appointed under section 32B” shall be inserted;

(24) after section 58B, the following new section 58C shall be inserted, namely:-

“58C. Inspection of audit firm- Where in case of a registered person, whose accounts are subject to audit under the Companies Act, 2017 (XIX of 2017), Chief Commissioner Inland Revenue has reason to believe that the audited accounts do not reflect the true and fair view of sales and purchases and related sales tax liability, he or she may with the approval of the Board, refer the audit firm, who has issued audit certificate to that registered person, for inspection to Audit Oversight Board.”;

(25) in section 73, in sub-section (4), for the words “one hundred million rupees in financial year or ten million rupees in a tax period”, the expression “the amount in a financial year or in a tax period, as may be prescribed by the Board, with the approval of Federal Government” shall be substituted.;

(26) in section 74, in the proviso, for the full stop at the end, a colon shall be substituted and thereafter the following new provisos shall be added, namely: -

“Provided further that regardless of anything stipulated in this section, or any provision of this Act, or any other applicable law currently in force, and notwithstanding any decision, order or judgement issued by any forum, authority or court, the maximum period

of extension under this section by the Board or the Commissioner, as the case may be, shall not exceed two years in aggregate:

Provided also that where there are reasons to believe that significant loss to exchequer or taxpayer has been caused by an act of omission or commission by the registered person or by any authority mentioned in section 30, a committee of members as notified by the Board may further condone the limitation specified for a period as it may deem fit, after providing a reasonable opportunity of being heard to the registered person concerned.“;

(27) in the Third Schedule, after serial number 51, in column (1), the following new serial number and entries relating thereto in columns (2) and (3) shall be added, namely: -

(28) in the Sixth Schedule, -

(a) in Table-1, in column (1),-

(i) S Nos. 151 and 164 and entries relating thereto in columns (2) and (3) shall be omitted;

(ii) against S. No. 152, in column (2), for the expression “2025”, the expression “2026” shall be substituted;

(iii) against S. No. 179, in column (2), after the word “capsules”, the expression “(for personal use only)” shall be omitted; and

(iv) after S. No. 180, the following new S.No. and entries relating thereto in columns (1), (2) and (3) shall be added, namely:-

(b) in Table-2,-

(i) against S. No. 57, in column (2), for existing entry, the following shall be substituted, namely:-

“Iron and steel scrap excluding:-

(a) supplied by manufacturer cum-exporter of recycled copper, authorized under Export Facilitation Scheme, 2021 directly supplied to a registered steel melter subject to such apportionment, conditions and restrictions as may be specified by the Board through a Sales Tax General Order; and

(b) supplied directly by the importer (verifiable from the goods declaration form) to a registered steel melter subject to such apportionment, conditions and restrictions as may be specified by the Board through a Sales Tax General Order.“;

(29) in the Eighth Schedule, in Table-1, in column (1),-

(i) serial number 53 and 72 and entries relating thereto in columns (2), (3), (4) and (5) shall be omitted;

(ii) after serial number 88 and entries relating thereto in columns (2), (3), (4) and (5), the following new serial numbers and entries relating thereto in columns (2), (3), (4) and (5) shall be added, namely:-

(30) in the Eleventh Schedule, -

(i) after the heading, THE ELEVENTH SCHEDULE, after the expression “(7)”, the expression “and (7A)” shall be inserted; and

(ii) in the Table, in column (1), for serial number (8), and entries relating thereto in columns (2), (3) and (4), the following shall be substituted, namely: -

15. Power to grant exemption

The Federal Government may, by notification in the official Gazette, subject to such conditions and restrictions as may be specified therein, exempt any country, any class of goods or services and class of persons from the chargeability under this Act, as deemed appropriate.

Schedule

[See section 3(2)]

The tax rate for collection for cross-border transactions of digitally ordered goods and services shall be as under.

226. Digital Enforcement Station

(1) The Board may, by a notification in the official Gazette, declare places to be Digital Enforcement Stations at such locations as deemed appropriate for the prevention of smuggling and illicit trade. The Board may notify any existing customs check-post as Digital Enforcement Station.

(2) The Board, may by notification in the official Gazette, make rules for staffing, operations and technological enablement of Digital Enforcement Station.

(3) The Board may subject to rules hire retired junior-commissioned officers and soldiers of the armed forces against the available posts of customs on contract for the purpose of this section.“;

(29) 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

(30) The Fifth Schedule to the Customs Act, 1969 (IV of 1969), shall be substituted in the manner provided for in the Second Schedule to this Act.