Finance Supplementary (Second Amendment) Act, 2019, as published 2019
This is the Finance Supplementary (Second Amendment) Act, 2019, as published by the Federal Board of Revenue in 2019. It runs to 24 pages and contains 7 sections.
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1. Short titl€ anrl commencement
{l) This Act shall be called the Finance Supplementary (Second Amendment) Act, 2019.
(2) It shall come i]to force at once unless otherwise provided in any of lhe provisions otthis Acl.
2. Amendm.nts of Customs Act, 1969 (IV of 1969)
ln the Customs Act. 1969 (lv of 1969), the follouing further amendments shall be made which shall come ino force at once except clauses 2(1Xa) and 2(2Xi) which shall take effect from the firsr day ofJuly, 2019 and clause 2(2) (iii) which shall take effect from the thi.ry-first day ofMarch, 2019. namelyl
(l) In the F’rst SclEdule, in chapter 99,
(a) in sub-chapter V, against PCT code 9917, in column (2), in serial (2), [or the w,rrds “plart and machinery”, the words and comma “plant, machinery and firefighting equipment” shall be substituted; and
(b) in suh-chapter vII, rn column (l), for the PCT code 9925 and the entries relatiqi thereto in columns (2) and (3), the following shall be s bstituted, namely: “9925 (A) Adficial kidneys, hemodialysis machines, 0”; and henodialyzen, A.V- fistula needles, hemodialysis fluirJs and powder, blood tubing tines for dial,si. re!erse osmosis plants tor dial).i.. double lumen catheter for dialysis, catheteB for renr l failure paticnts, peritoneal dralysrs solltion and cardiac catheters. (B) Following items and appliances for Ostomy l. Baseplate/Stoma Wafer/Flange. 2. Ostomy(Colostomy/Ieostomy/Urostomy) bags (Alltypc) 3. Ostomy (Colostomy/lleostomy/ Urostomy) Paste 4. Ostom,v (Colostornv/lleostomy/ Uroskrmy) Belt Ostomv (Colostomy/lleostomy/ (.Jrostomy) Dcodorizers
I] PART THE GAZETTE OF PAKISTAN, DXTRA,, MARCH I I, 2O]9 39 5- Ostomy (Colostomy/Ileostomy/ Urostomy) Strip Paste 7. Stoma Powde./Ostomy Powder (Colostomy/ ll€ostomy/Urostomy Powder/ Ileostomy/ Urostomy Powder) 8. Oslomy (Colostomy/Ileostomy/ Urostomy Skin Banicr Spray and Wipe 9. Ostomy (Colostomy/lleosromy/ Uroslomy) Adhesive Remover Spray and Wip€. 10. Ostomy (Colostomy/lleostomy/ Urostomy) Mouldable Ring I 1. Ostomy (Colostomy/fleostomy/ Urostomy) Elastic Tape 12. Ostomy (Colostomy^leostomy/ U.ostomy) Barrier Crcam 13 Ostomy (Colostomy/Ileostomy/ Urostomy) Protectiv6 Sheets 14. Ostomy (Colostomy/Ileostomy/ Urostomy) cap 15- Ostomy (Colostomy/fleostomy/ Urostomy) Protective Seal I6. Plastic Clips for closing lhe Ostomy bags. 17. Liquid washers and wipes for cleaning and washmg peristomal skin. 18. Night Drainage Bag 19. Cystoscope 20. Lithotripter 21. Colonoscope 22. Sigmoidoscope 23. Laparoscope 24. Supral,ubic Cystostomy Set 25. Ryles Tube (Nasogastric Tube) 26. Foley’s Catheter 27. Endoscope (Video Endoscopes) 28. Linear Cufter/Stapler 29. Circular Stapler 30. Right Angle Cutrer/Stapler
i 19 40 THE GAZETTE O PAKISTAN, EXTRA., MARCH I I, 20 IPNRT I lnst 31. Laparoscopic Haxd mcnts: (a) Dissector;
(b) Grasper;
(c) Scissors;
(d) Clipper;
(e) Hook;
(f) Retractorsi
(g) Needles Holders;
(h) Knot Pusher; and
(i) Telescope (0”. 30’). 32. Urological Endoscopic Instruments:- (a) Resectoscope (Rotating and l’ix);
(b) Optical Urethrotone;
(c) Telescope (0”, 30”, 75); and t
(d) Turp Resecting ops.
(2) In the Fifih Sclrcdule,
(i) in Partl, in r.olumn (1), afier Sr. 33, the following new serial number and the entries rclating thcreto in columns (2), (3), (4) and
(5) shall be added, namely: Plant and Chapters 84 00/” This cxemption shall machint,ry and 85 be available subject to fulfi llment of following excludirLg conditions, namely: durable goods (a) rhe importer is and offire registcrcd under equipmont as the Sales ’[a-x Act importel by on or after the first greenficld day ofJuly, 2019; industri,is, intending to
(b) thc industry is not manu f:r(’ture established by taxable;oods, splitting up or during their reconstruction or constsuc tion reconstitution oaan and underlakinp installation already in period.
PART I] THI-] GAZETTE OP PAKISTAN, EXTRA-, MARCH I I,2OI9 ,!t or existence by hansfer of machinery or plant from another industrial undertaking in Pakistan.
(c) exemptron certificatc issued by the Commissioner lnland Revenue having jurrsdiction; and
(d) the goods shall not be sold or otherwise disposed of without prior of approval dre FBR and the payment of customs duties and taxes leviable at tle time of import.“;
(ii) in Pan-VII, in Table-B, in column (l),
(a) against serial numbers 15 aod 16, in column (4), for the figure “5”, the figure “3”, shall be substituted; and
(b) against serial number lt, in column (4), for the ligure “5”, the figure “0’’, shall be substituted; and
(iii) after Part-VII, ambnded as aforesaid, the following “Part-VIll”, shall be added, namely-
_I:SE_9A.{ETTE .,Part-VlII limport of iDdustrial inputs/rrw mrterials TABLE
(1) OYo Oclanol (octyl alcohol) and isomers 00/” II Of a kind used in rhe leather or l*e Of a kind use. rn the paper or like indurtri€s Of a kind used in the ieather or like industries Acrllonitrile buradiene sryrene ABS Containing by v’eight more thEn 50 o/” of graphite or other carbon or ol Of nachines ot heading E414.1000 2l and 8414.3010 Evaporators (roll bo.d / fin / tube on
I] Machines for reeling, unrceling, folding cuttrng or prnkin8 texrile Machinery for making or repairing i3 oo/” l6 Motors of an output not excding It 37.5 W Burglar or fir€ alffms and similar appallitus freezers and air conditioners 50/o
(c) t60/0 to annual quota nor mor. than 70 qJmr Input Output Co- nor more than I5O g/m’1 emcien( Organization (loco) and certificati6n by drc Ensine€nng Developmc Impo(s sYo manufacturers of inf.nt formula nill, r.gisteEd Act, 1990, subject 10 annual quota Eificarion by dl€ Inpul Ourput
II,20I9 M THE GAZEl-Tts OF PAKISTAN, EXTRA,, MARCH IPARI I Co-efici€nt Organizatior 00co).“.
3. Amcndmenb of thc S.lca Tax Act, 1990
[n the Sales Tax Ac! 1990. thc followinil funher amendments sball be made, namely -
(l) (llA) in section 2, the existing clause shall be re-numbered as cla6e (llB) and after clausc (11), thc following n€w clause shall be iniede4 narnely:- ’ (l lA) “FBR Refund Settlement Company (Private) Limited” mears lhe company wlth this name as incorporated under the Comoanies Ordinance, l9E4 CXI-VII of 1984), for the pupose of seitkment of sales tax and ilcome tax rcfund claims includinB payftrent by way ofissuing refund bonds under seation 6?4”;
(2) after s€ction 67, the following new section sha-ll be inserted, aamt’ly:- ’’6?A. PrlD.rt of r€fuDd througb sil€3 lat rcfund botr(ls”- (t) Notwilhstanding an],thing contained in s€ction 67, lhc sales tax aefunds payablc under this Act may also be peid dmuSh sales tax rEtund bonds to be issued by FBR Refund Settlemenl Company (Private) Limited, in book-entry form through an estat,lishment licensed by th€ Securitics and F:xcharlge Commission of P *istan as a central depository under the Secu ties Act, 20 1 5 (Ul of 2015), in lieu of palment to be made through issuance of cheq ues or bank debit advice.
(2) ’l’he Board shall issr,e a promissory note to FBR Refund Seftlement Company (Privaq Limired, hereinafter rcferred to as the ( ompany, incorporating the derails of refund claimants and the amo int of rEfund dctermined as payable to each for issuance of sale!. tex refund bonds, hereinafter relcrrcd to as the bonds, of the samri smounl, (:) The bonds shall be issued in values in multiples of one hunrlred thousand Ru Jrers. (r ) ’l hc bonds so issued shall have a maturiry pcriod of three years and shall bear annual simple profit at ten per ccnt- (! ) The bonds shall be traded fr€ely ill the country’s sccondary marliets
THE GAZETTE OF PAKISTAN, EXTRA,, MARCH I1,2OI9 ,t5
(6) The bonds shall b€ approved security for calculating the statutory liquidily reserve.
(7) The bonds shall be accepted by the barks as collateral
(8) There shall be no compulsory deduction of Za*rt against the bonds and Sari6-e-Nisdb rnay pay Zakal \oluntarily according lo Shariah.
(9) After period of miturity, the company shall retum the promissory note to ihe Board and the Board shall make thc paymenr of amount due under the bonds, along with profit duq to the bond holderr.
(10) The bonds shall be redeemable in the manner as in the preceding sub-section before maturity only at the option of the Board along with simple profit payable at the time of redemption in the light of general or specific policy to be formulated by the Board.
(11) (l) The refund under suusection shall be paid in the aforesard manner to the claimants who opt for payment in such manner,
(12) The Federal Govemment may nodry procedure to regulate the issuance, redemption and other matters relating ro the bonds, as may be required.“; and
(3) in the Sixth Schedule,
(a) (l),- in Table-1, in column
(i) aSainst serial number 110, in column (2), after the word “lslamabad”, the expression ’’for the period ending on the 30th June,2023” shall be inserted;
(ii) for serial number 117 and entries relating thereto in cotumns (2) and (3), the following shall be substituted, namely:- “t17 Appliances and items required for sq)51 ostomy procedures as specified in the Chapter 99 oflhe First Schedule to the Customs Ac! 1969, subject to same condltions as specified therein
l019 46 THE GAZETTII OF PAKISTAN, EXTRA., MARCH I l, [PaRr I
(iii) ser’al number ll8 and cnlries relaling lherelo in col’unlnt
(2) and (3), shall b€ omitted: and 1i) aft,:r serial number 149 and the entriei relating theieto in columns (2) and (3), the following new serial number and the entries shall be added respectively, namely:- “ 150 Plant and machinery excluding Chapters 84 consumer durable goods and office and 85”; equipment as imported by greenfield to industries, inlending mahufacture taxable goods, during their construction and installation period subject to conditions not€d b€low and rssuance of exemption certificate by the . Commissioner Inland Revenue havingjurisdiction:.- Conditions:
(a) the importer is r€gistered under the Act on or after the first day of July,2019; and
(b) the industry is not established by splitting up or reconstruction or reconstitution of an undertakiDg . already in existence or by transfer of machinery or plant from another industrial undertaking in Pakishn
(b) in’l’ablc-3, in the Annexure, in column (l),
(i) jn against serial number 7, in column (2), the entry 1, fbr the expression “etc”, the expression. “This exemption in relation to renervable energy shall remain in force up to thc 30th June, 2023” shall be suhstituted: and
(ii) against ser al nu mber 14A, in column (2), for the expre ss ion ’etc.“, the expreslion “as impofled on or before the Joth June, 2021 ’shall be substitu cd; and
(4) iu the Nirth Schedule, in the Tablc, in column (l). for serial nurnber 2 rmd entries relating thereto in columns (2), (3), (4) and (i). the folloling shall be subslirured, namely:._
to satellite phones be charged on the basis of import value per set, or equivalent value in rupces rn case of supply by the manufacturer, at the rate as indicaled against each category:– nol exceeding US$ 100 not exceeding US$ 200 Rs 1,930 not exceeding US$ 350 Rs. 6,000 not exceeding US$ 500 Ametrdment oflnmme Tax Ordimtrce,2001 [XLD( In the Income Tax Ordinance, 2001 (XLIX of 2001), the following lirther amendments shall be made which shall come into force at once except clauses (13XAXb) and (13)(BXf) which shall take effect from the first day ofJuly, 2019, namely:
(1) in sechon 48, for the expression “to 2020”, the words “and onwards” shall be su bstituted;
(2) in scction 5A, in sub-section ( l), for the expression “year 2017 and onwards”, the expression ’years 2017 to 2019” shall be substituted;
(3) in section 37A, in sub section (5), for the full stop at the end a colon shall be substituted and thereafter the followrng proviso shall be added, namely: “Provided that so much of the loss sustained on disposal of securities in tax year 2Ol9 and onwards that has not bcen set off against the gain ofthe person lrom disposal ofsecurities chargeable to tax undcr this section shall be carried forward to the following tax year and set off only against the gain of the person from disposal o[ securities chargeable to tax under this section- but no
I9 48 THE GAZET] E OT. PAKISTAN, EXTRA. MARCH I I, 20 IPART I such loss shall be carried forward to morc than three La\ years immediately succeeding thc tax )ear for rrhich the loss was first computed.;
(4) in section 49, after sub-section (4), in the proviso, after the words “licens€s”. the words “and renewal thereof’shall be inserted:
(5) after section 99A, the following new section shall be inserted, namely: ’998. Special procedure for small traders qtrd in shopkeepr)rs.-Notwithstanding an),thing contained this Ordinance the Federal Govemment may, by notiflcation in the official Gezette, prescribe special procedure for scope and payment of tax, filing ol retum ard assessment in respect of such small lraders anl shopkeepers, in such cit,es or territories, as may be specified trerein.“;
(6) in section l2J, after sub-section (l), the following new suEsection shall be in rcrted, namely:- “(1A) Where an offshore asset of any person, not declared earlier, is discovered by the Commissioner or any deparlment or agency of rhe Federal Govemment or a Provincial Govemment, the Commissir)ner may at any time before issuing any assessment order under sect on 121 or amended assessment order under section 122. issue to tte person a provisional assessment order or provBional amended assessment order, as the case may be, for the last complet€d tax year of the person taking into account the ofTshore asset disccvered.“l {1) jn section l4E, in sub-section (8), clallse (a) shall be omitted;
(8) in section 165,- (A) 1),- in sulFsection (
(a) for the word “monthly”, uherever occurring, the word “biannual” shall be substituted;
(b) for the word “month”. wherever occurrinq, the word “half-year” shall bc substihrt€d; and (B) for riub-seclion (2), the following shall be substituted, namely:-
I] PAIT THE GAZETTE O}.PAKIS,IAN, EXTRA., MARCH ] I, 20] 9 49 “(2) Every prescribed pcrson collecting tax under Division II ofthis Part or Chapter Xll or deducting tax under Division III of this Part of Chapter Xll shau fumish
(l) statements under sub-section as per the following schedule, namely:-
(a) in respect ofthe half-year cnding on the l0th June, on or before the 3Istday ofJuly; and
(b) in respect of the half-year ending on the llst December, on or belore lhe J I stda) of January”: and (C) after sub-section (2A), the following nevr’ sub-section shall be inserted, namely: “(2B) Notwhhstanding an,,thing contained in this section, the Commissioner as he deems lit may by notice in writrng require any person, collecting or deducling tax under this Ordinance, to fumish a statement for any period specrfied in the notice within such period of time as may be specified in the notice. ;
(9) (b),- in section 227C, in clause (A) in the first proviso,
(i) for clause (i), the following shall be substituted, namely:- “(i) locally manuFactured motor vchicle; or”; and
(ii) in clause (ii), after the word “Pakistanis”, the words “or a non-resident Pakistani citizen holding intemational passport’ shall be inserted; and (B) in th€ second proviso, rn clause (ii), after the word “Pakrstanis”, the words “or a non-resident Pakistani citizen holding intemational passpo(” shall be inserted;
(10) for section 230E, the foJlowing shall be substituted, namely:- “230f Directorate G€neral of Internrtional Tar Operrtions,- (l) The Directorate General of lntemational Tax Operations shall consist ofa DircctoFceneral and as many Directors, Additional Directors, Deputy Directors, Assistant Directors and
50 ,I HE GAZE TTE OF PAKISTAN, EXTRA., MARCH ] I. 20 I9 IPAXT I such otler omcers as the Board may, by notification in the official Gazefte, appoint.
(2) The Board may, by notification in the official Cazette,
(a) specifo the functions and jurisdiction of the Directorate General and i1s officers; and
(b) confer the powers of authorities specified in seclion 207 upon lhe Dir€ctomte General and rts ofl]cers.
(3) The functions and powers of the Directorate Ceneml of lo-. Inremaronal Ta-\ Operalions shall include but nor limilcd
(a) receive and send information liom othcr jurisdictions under spontaneous, automatic and on demand exchange of informalion under exchange o[ information agreements;
(b) lery and recover tilx by passing an assessment order under section I23(1A) in case of undeclared off-shore assets and incomes;
(c) receive, transmit and €xchange country by country repoft to the jurisdictions that are panies to intemational agreements with Pakistan; and
(d) conduct tansfer pricing audit in cases selected for such audit by the l)irector Geneml of lntemational Ta-\ Operations.
(4) The Board ma]’, by noti[ication in the official G^zette, speciry :he criteria for selection ofthe taxpayer for transfer pricing audit. Explandtion- For the removal of doubt, it is clarified that transfer pricing audit refers to the audit for detcrminalion oftransfer price at arm’s length in traflsactions between associates and is indepenJent ofaudit under section 177 and 2l4C whrch is audit of the income tai affairs ofthe taxpayer.“;
(ll) in sect on 233A, after sub-section (2), thc following sub-section shall be added, namely: “(3) ’l his section shall not appl) from the first day ot March. 20t9.;
I] THE GAZETTE OF PAKISTAN, EXTRA., MARCH II,20I9 PAxl 5l ( 12) in the First Schedule,- (A) in Part I, in Dtvision IlA, in the I’able, in column (l), against S. No.
(i) in column (3), for ttre figure ’’0”, the figure “4” shall be substituted, and
(ii) in columns (5) and (6), for the corresponding figures “3” and “2”, rhe figure ’4” shall be substituted; and
(b) against S. No. 2., in column (5), for the figure “1”, the figure 0 shallbe.ubstituled: (B) in Part II, after the Table. in the proviso, in claus€ (b), For the Iull stop at the end, a colon shall be substituted and thereafter the following second proviso shall be added, namely:- ’Provided further that the mte oftax on value of import of mobile phone by any person shall be as set out in rhe following Table, namely: Table C & F Value of mobile phfie Ta-x
(l) IV,- (C) nr Part
(a) in Division VI. the e\pression “0.30Z of the cash amount withdrawn for filers and” shall bc omitted:
2019 52 THE GIZE’I TE OF PAKISTAN, EXTRA . MARCH I l, [P^Rr I
(b) in Division VIA, for the expression “0.3o% of the transaction for filers and 0.6%”, the expression “0.6% of the transactions” shall be substituted;
(c) in Division VII, in clause (1), in the Table, against S. No. 1 to 9, for the entries in column (4), the following shall rcsp€ctively be substituted, namely.- ‘Rs I5,000 Rs.37,500 Rs. 60.000 Rs. 150.000 Rs.225,000 Rs.300,000 Rs.450,000 Rs.600,000 Rs.675,000’’;
(d) i. Division XI, afte. the Table, the following new proviso shall be added, namely:- “Provided fiirther that the rate for the function of maftiage in a nrarriage hall, mifquee or a community placb with the total function area less than 500 square yards or, in case of a mulh storied premises, with the largest total function area on one floor less than 500 square yards, shall hc 5% of the bill ad valorem or ’i Rs. 5.000 per function $ hichcver is higher.
(13) in the Se:ond Schedule, (A) I,- in I’art
(a) ln clause (66), after suEclause (lxii), the following sub-clauses shall be added, namely:- “(lxiri) National Disaster Risk Management Fund.
(lxiv) Deposit Prot€ction Colporation established under sub-section (l) of section 3 of Deposit Protection Corpor.ation Act, 2016 (XXXVII of 20r 6).
Pa-Rr Il THE CAZETTE OF PAKISTAN, EXTRA.. MARCH I I. 20 I9 53
(lxv) SARMAYA-E-PAKISTAN LIMTTED “: and
(b) after the omifted clause (1038). the lotlowing new clause shall be inserted, namely:- “(103C) Dividend income derived by a cornpany. if the recipient oflhe dividend, for the tL\ )car has availed Broup relief under section 59B, compured according to the following formula- A,B/C W}ere- A is the amount ofdividend; B is the shareholding of the company receiving the dividend in the company distributin8 the dividend; and C is the tolal ordinary share capital of rhe company distributing the dividend.”;
(c) tu clause (1261), for the full stop at the end a colon shall be substituted ahd thereafter rhe followinq proviso shali be added. namely: “Provided that this clause shall also apply to such undenal,ing \cr Lrp between lhe l”’March. 2019 and thc 10’r June. 2021 lor a period of fi \ c )ears beginn’ng from the date such indsstrial undertaking is set up.“;
(d) after clause (126N), the following new olause shall tr insened, namely: 11260) Profits and gains of a company from a Sreen field industrial undertaking for a pcriod of five years incorporated on or after the first day ofJuly, 2019 provided that the gr€€n field induslrial undenaking is not formed by the splrtting up or r€constitution of an undertaking alreadv in existence or by rransfer oI machinery or plant f.on an undertaking established in Pakistan before the commencemenr of the nerv business.“; alrd
5l THE GAZEI’It, OF PAXIS]AN, EX I RA., MARCIl I 1. l0l9 IPART 1 (B) in I’ar lV,–
(a) in clar.rse (11A), alicr sub-clause (E)i), the following !ub-clauses shell be added, namelyi- “(r,-\i) N-alional Disaster Risk Managcmcnt Fund (rrxii) Deposit Protcction Corporatiofl established under sub-section (l) of section 3 of the Deposil Protcction Corporarion Act, 2016 (XXXVII of2016). (xl\iii) S^RMAYA-E-PAKISTAN LIM I’TEI) (xx)dv) Green fietd industrial undertaring qualiffing for excrnption under clause (126(]) of Part I of the Second Schedule.”:
(b) xlter clause (36,{), the following new clauses shall be rnserted, namely’- “(368) The provisions of section l5l shall not rrpply to profit on debt paid on promissory notes and :Jaes tax refund bonds issued under the p.ovisions ofthe jales Ta-x,Act, 1990.
(36C) The provisions of seclion l5l shall not .rppl) (o t’rolll on Jebt paid on PaLislan’ Bana.I ,lenificate,
(36D) The provisions of sections 150 and 151 ;hall not apply to SARMAYA-E-PAKISTAN i-IMI ED.
(36E) The provisions of section I5I shall not rpply on profit on debt paid on bonds issued under the acdoral Govemment Duty Drawback Bonds Rules, )0t9.’-;
(c) rrfter ciause (60C), Ltte following new clauses shall be ,rdded, namely:-
(60D) I’he provisions of section l4t shall not iipply on rnport of fire fighting equipments by industrial
PAxr Il tHE GAZETTE OF PAKISTAN, EXTRA., MARCH 11.2019 55 undertakings set up in the sp€cial economic zoncs established by the Fedeml Govemment.“;
(d) aftcr clause (3tC), thc following new clause shall be inse(ed, namely:- “(38D) The provisions ofsection I5l and 153 shall not apply to the Nalional Disaster Risk lvlalagement Fund.”;
(e) after clause (81), the following new claudi shall bc inserted, namely: “(8lA) The provisions of clause (a) of snb,sccrion fl) of section 165 shall not appl], to bankr.tg companics for fumishing informalion of t&\es collectcd and dedueted under scctions 2l lA and I5l.’; (0 after clause (95), the following new clause shall be inserted, namely, “(95A) The provisicns of section 236A shall not apply in respect of auction oF franchise rights to pafiicipating teams in a national or intemational lcague organized by any board or other oryanization established by the Govemment in Pakistan for the purposes of controlling, regulating or encouraging major games and sports recognized by the Government with effect from the first day ofJuly; 20l9.”;
(g) after clause (101), the following new clause shall be inserted. namely:- “(1014) The provisions of scction 231A shall not applv to a Pak Rupee accounr if thc deposits in thc account are made solely from foreign remittances credited directly into such account.”: and
(h) after clause (110), the following new clause shall be added, namely:– l) “(11 The provisions ofsection 48 shall not apply to so much of the income of banking company as defined in the said section subject to reduced rate of tax
20I9 56 TIIE GAZETTT] OF PAKISTAN, EXTRA,, MARCH I I, IPART I tt 20yr v er rulcs 7D, 7E and 7F of the Seventh :;chcdule for ta\ lears 2020 to 2023.“:
(14) in the Sev(inth Schedule, aftcr rule 7C, lhe followrng ner* rules shall be ingr(ed, namelyi- “7D. Reduced rate of tlx oD additional edvences for micro, sm:rll and medium etrteryrises.-{1) Ths taxable income rnterest inccme arising &om additional advanc€s to micro, small arrd mediurn enterprises, for thc tax years 2020 lo 2023, shall b€ taxed al thc rate of20% inst€ad ofthe rate provided ir Division II ofPart I ofthe [’irst Schedule-
(2) ,\ banking company shall fumish a cernficate from extcmal auditor along with accounts while e-filing lclum of Income ccrtirying tlre amount ofsuch advances made in preceding lax year, additional rdvance made For thc tax year and n€t mark-up eamed from such Edditronal advances for the tax year.
(3) I’lotwithstanding anl4hing contained in this Ordinance, the Commrssioner may require the banking company to fumish details of tlle advaices to micrc, small and medium enterprises to delerminc the applicabiliry ofthe reduccd mte of ta-x.
(4) l:or the purposes ofthis rul€, the term ’’micro, small and medium enterpnses” shall have the same meanrng as provided in Prudential llegulations issucd bythc State Bankof Pakistan.
(5) ’Additional advances” means any average advances disbursed i1 addition to average amount of such advances made in such sector by the bank for the tax l.,ear.
(6) ’Ihe taxabl€ income arisiog f.om additional advances under sub-r’ule (l) shall be determined according to the following fi)rmula, namely. Ta-{able in(ome s,Jbject to reduccd rate oatax = A x B/C A. is taxable i,rcome ofthe banking company; B is nct mark up income eamed lrom such additional advances for lhe tax yem as declared in the annual accounts; anJ
THE CAZETTE OF PAKTSTA EXTRA.. MARCH I I 2019 5? C is to(al of tle nel mark-up and non marft-up income of the banking compan) as per accounls.
5. Amendments ot the Federel Ex.ise Act, 2m5
ln thc Federal txcis€ Act,2005, the follo$’iig fu(hcr amendments shall be made, namely:-
(l) in secrion 29, in sub-section (2), in clause (aa), in sub-clause (ii), lor lhe e\pression “secton 10”. the expression “suEseclion (l) of seclion 29’ shall be substiEted; and
(2) in the first Schcdule,-
(a) (l),- in the I-ABLE l, irr column
(i) 55,- against serial numher (A) in column (2), after thc word “above”, occurring twice, the expression “, but not exce€ding J000 c.” shall be inserted; and (B) rn columo (4), afier the word “twent]” th€ exprcssion ’1five” shall be inseded; and
(ii) after serial numb€r 55 and the entries rElatht thereto in columns (2), (3) and (4), amended as aforcsaid, the lollowing new serial nllmbers and entries relaling thereto shall respeclively be ins€ned, namely:- ’55A lmported moror cars, SUvs 87.01 Thr.ry and other motor Yehicles of per cylinder capaciLv exceeding lo0occ principally designed for rhe ranspon of persons (orher than those of headirgs 87.0?), including srarion wagons and racing cars of cylinder capacity €xc€eding 3000cc
assembled motor cars. SUVS and othcr motor vchicles of cylinder cspaciry of l700cc or above. principally dcsigned for rhe tmnspofl of persons (other than rhosc of headings 02), including station wagons and racins cals of
6. AmendnLents in Finrnc. Act, 201E
ln the finance AcL 20lg rfie followinc shall bc subslituted namely: “TABLE Mobile Phorcs h.virg C&F Vatuc (US
(3) 3500 TAHIR I IUSSAIN, PRI\rED BY IHE MAN^GER IR|NTINC STATIONERY A1\T) TOR]\IS I’NI/FRSIN ROAD X^RA’H
7E. Rcdu.ed r.tc of tax otr rdditioEel rdveDcB for low cost housing
(l) The laxable income arising from additional advances fo. low cost housing, for the tax years 2020 to 2023, shall be la(ed al the rate of 2tr2 insted oflhe rate provided in Division II of Pan Iofthe First Schedule.
(2) A banking company shall fumish a certificate from extcrnal auditor along with accounts while e-filing retum ofincome certirying the amount ofsuch advanccs made in preccding rax year, additional advance made for the tax ycar and net mark-up earncd from such additional advances for thc tax year.
(3) NolwithsLanding an),thing contained in this Ordinance, the Commissioner may require lhe baoking company to lumish details ofthe advances madc for low cost housing to det€rminc the applicability ofrhe reduc€d mte of tax.
(4) For the purposes of this rule, the term “low cost housing” shall have the same meaning as provided in Prudential RcBulations issucd b] the Stare Bark ofPalisten.
(5) “Additional advances” means any average advances disbursed in addition to avcrage arnounl ofsuch advances made rn such sector by lhe bank for the tar year 2019.
(6) Thc taxable rncome arising from additional advances under suErulc.(l) shall b€ determined accnrding to the following formula. namcly:- Ta\able income subject to reduced rate of tax = A x B/C Wlcre- A. is taxablc income ofthe bankinS company; B rs net mark-upincome eamed from such additional advances for thc tax yea. as declared in the annual accounts; and
58 N]E GAZE’I TE Of PAKISI’AN, EXTRA.. MARCH I I. 20I9 PARI I C is total ol the net mark-up and non mark_up income of the banking compan) as per accounts.
7F. Reduced rate of lex otr additional advrnces as Ferm Credit
- (l) The taxable income arising from additional advances for Farm Credit in Pakistan. for the tax ]€ars 2020 to 2023, shaU b€ ll taxed at the rate of 20oZ rnstead ofthe rate provided in Division of’Part I ofthc First Schedule.
(2) A banking compary shall fumish a certificatc fiom extemal audiror along with aocounts whilc e-filing retum of income certiryinl the alrount ofsuch advances made in precedrng tax year, additional advance made for the ta-x year and nct mark-up eamed from such additional advances for the tax year.
(3) Notwithstanding an)lhing contained in thrs Ordinance, the ConLmission€r may require the banking compaoy lo fumish details cf the advances made for Farm Credit to determire thp applicability ofthe reduced rate oftax.
(4) For the purposes of this rlile, the term ’’Farm Credit” shall ha.e the same meaning as provided in Prudential Regulations issued ty the State Bank of Pakistan for agriculture fulanciflg excludin j such advances made to a company as defined in seclion 80.
(5) “Addilional advances” means an) arelagc advances disbursel in addition to average ,unount of such advances made in such_secror by the bank for the tax ycar 2019.
(6) The Lxablc income arising liom additional advances under sr b-rule (1) shall be determined’accordinS to the follorvirrg formo14 namely:- ’Iaxable incorne subJect to rcduced rate ofta-x: A , B/C A. is taxable income ofthc banking company;
PAR T I] THE GAZETTE OF PAKISTAN, EXTRA.. MARCH I I,20I9 59 B is net mark-up income eamed from such additional advances for thc .tax ycar as declared in the annual accounts: and C. is total of the nel mark-up and non mark-up income ofthe banking mlnpany a5 per accounls.“,