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    TABLE OF CONTENTS

    INCOME TAX

    S. No Page No

    1 Taxation of Salaried & Non Salaried Individuals & Association of

    Persons1

    2 Provision of taxability of profit on loan to employee by an employer

    amended2

    3 Rate of initial depreciation on building reduced 2

    4 Gain on sale of immovable property within two years of purchase no

    more exempt from tax3

    5 Capital Gains on Disposal of Listed Securities 3

    6 Compensation on delayed refund of any tax to be treated as income

    from other sources5

    7 Increase in limit for tax credit on investment in shares & on insurance 5

    8 Tax credit on investment in plant & machinery 5

    9 Tax credit for newly established undertaking 7

    10 Corporate dairy farming also entitle for tax credit 7

    11 Provisions for tax credit to industrial undertaking established before

    01stJuly 2011 changed8

    12 Rate of minimum tax on retailers reduced 9

    13 Increase in time period for issue of notice for deficiencies in the

    return of income.9

    14 Order passed Under Section 122-C can be amended 9

    15 Additional commissioner can make enquiries while framing amended

    assessment order under section 122(5A)9

    16 Stay of demand by Commissioner Appeals & Tribunal InlandRevenue

    10

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    17 Certificate from commissioner required for reduced rate of tax at

    import stage on import of raw material by the manufacturers10

    18 Electronic media exempt from deduction of tax at source 10

    19 Deduction of tax by manufacturer at the time of making sales 11

    20 Income which falls under the final Tax Regime to be taxed as such

    even no tax is deducted on such income.11

    21 Importers, exporters & suppliers may opt out of final tax regime 11

    22 No order for penalty is required if the taxpayer admits his default 12

    23 Rate of default surcharge enhanced 12

    24 No default surcharge to be levied if payment of tax due on the basis

    of appeal order of the commissioner inland revenue is paid withintime allowed on the notice of demand

    12

    25 The daily Limit for deduction of tax on cash withdrawal enhanced 13

    26 Rate of tax at the time of registration of new motor vehicle enhanced 13

    27 First schedule 14

    SALES TAX ACT, 1990

    28 Assessment of tax and recovery of tax not levied or short-

    levied or erroneously refunded

    15

    29 Supplies Against International Tender 15

    30 Fifth Schedule 15

    31 SROs 16

    32 Notifications 16

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    NOTES ON THE FINANCE BILL 2012

    INCOME TAX

    Finance Bill 2012 proposes the following amendments in the Income Tax Ordinance 2001.

    TAXATION OF SALARIED & NON SALARIED INDIVIDUALS & ASSOCIATON OF

    PERSONS

    The following amendments have been proposed for the purpose of taxation of Individuals,

    Salaried as well as non Salaried, & Association of Persons:

    Salaried Individuals

    1. Basic exemption limit enhanced from Rs.350,000 to Rs.400,000

    2. Table for rate of tax has been changed from slab rate to previous progressive tax rate.

    3. Facility of marginal relief withdrawn.

    Non Salaried Individual

    1. Basic exemption limit enhanced from Rs.350,000 to Rs.400,000

    2. Table for rate of tax has been changed from slab rate to previous progressive tax rate.

    Association of Persons

    1. Association of Persons will be allowed exemption upto Rs.400,000.

    2. Rate of tax will be that which is applicable to non salaried individual instead of existing

    25%.

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    PROVISION OF TAXABALITY OF PROFIT ON LOAN TO EMPLOYEE BY AN

    EMPLOYER AMENDED

    Section 13(7) & (14)

    Following amendments has been proposed in the provisions of Income Tax Ordinance relating to

    taxation of taxation of profit on loan received by an employee from his employer:

    No tax to be charged on profit (interest) free loan from Employer to Employee where the

    amount of loan does not exceed Rs. 500,000

    Currently where an employee is provided loan by his employer either free of Profit (interest)

    thereon or at the rate of Profit (interest) less than the bench mark rate prevailing, than the

    employee was liable to include in his income, as perquisite, the amount of profit not paid on loan

    or difference of the profit (interest) paid and the profit as per bench mark rate prevailingirrespective of the amount of loan taken. Now an amendment has been proposed whereby

    according to which such non or short payment of Profit (interest) shall not be treated as

    perquisites if the amount of loan does not exceed Rs.500,000.

    Maximum rate of Profit (interest) on loan to Employee by an Employer not to exceed ten

    percent per annum

    The rate of Profit (Interest) on loan has been fixed at one percent above the rate applicable for

    preceding year and there is no ceiling to this rate. Now an amendment has been proposed that the

    rate of profit (interest) on loan shall not exceed ten percent per annum.

    RATE OF INITIAL DEPRECIATION ON BUILDING REDUCED

    Section 23 & Clause 1 of Part II of Third Schedule

    Rate of initial Depreciation on building is proposed to be reduced from 50% to 25%.

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    a) mutual fund;

    b) banking company, non-banking finance company and insurance company subject

    to tax under the Fourth Schedule to the Ordinance;

    c) modaraba;

    d) Foreign institutional investor being a person registered with NCCPL as a foreign

    institutional investor; and

    e) Any other person or class of persons notified by the FBR;

    (iii) By way of a special provision it has been prescribed that enquiries shall not be made

    for the nature and source of the amount invested in companies listed at stock

    exchanges till June 30, 2014 subject to following conditions:

    a. amounts remain invested for 120 days;

    b. tax on capital gains has been duly discharged in the manner prescribed; and

    c. a statement of investments is filed with the return of total income/ wealth

    statement; and

    (iv) A person can opt out for payment of tax under Eighth Schedule by obtaining prior

    approval of Commissioner Inland Revenue and filing of an irrevocable option with

    NCCPL to this effect. In such an event, the person shall be subject to scheme of

    taxation provided for in section 37A of the Ordinance. Further, tax rates earlier

    prescribed on capital gains derived from disposal of securities have been proposed to

    be revised/ reduced as follows:

    Tax Year Persons other thaninsurance companies

    Insurance companies

    Holding period is

    six months

    or less

    more than

    six months

    six months

    or less

    more than

    six months2012 10.00% 8.00% 10.00% 8.00

    2013 10.00% 8.00% 12.50% 8.50%

    2014 10.00% 8.00% 15.00% 9.00%

    2015 17.50% 9.50% 17.50% 9.00%

    2016 * 10.00% * *

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    COMPENSATION ON DELAYED REFUND OF ANY TAX TO BE TREATED AS INCOME

    FROM OTHER SOURCES

    Section 39(1)(cc)

    A new clause (cc) has been proposed to be inserted in sub section (1) of section 39, Income

    from Other Sources. According to this propose amendment any compensation received by a

    person on delayed refund of any tax shall be treated as Income under the head Other Sources.

    This amendment appears to have been proposed to nullify the effect of judgment of the

    Honorable Appellate Tribunal Inland Revenue holding that the compensation/ additional refund

    received on delayed payment of refund of tax is not taxable.

    Further, the rate of compensation/additional payment on delay refunds is proposed to be fixed at

    15 per cent per annum instead of existing KIBOR per annum.

    INCREASE IN LIMIT FOR TAX CREDIT ON INVESTMENT IN SHARES & ON

    INSURANCE

    Section 62(2)

    The following amendments has been proposed in the provisions of section 62 dealing with

    entitlement of a person for tax credit on investment in shares or on payment of Insurance

    premium during a tax year:

    1- The maximum limit for investment in shares or on payment of Insurance premium is

    proposed to be enhanced to twenty percent of the taxable income of the person or

    Rs.1,000,000 whichever is less from existing fifteen percent of the taxable income of the

    person or Rs.500,000 whichever is less.

    2- The condition for holding of shares on which tax credit claimed is proposed to be reduced

    from thirty six to twenty four months.

    TAX CREDIT ON INVESTMENT IN PLANT & MACHINERY

    Section 65B

    This section provides for incentive to companies to invest in Balancing, Modernization &

    Replacement of the Plant & Machinery already installed. This incentive is in the shape of tax

    credit @10% on the tax payable by the Company in the year of such investment. However this

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    incentive is available only to those Companies who made this investment during the period from

    01stday of July 2010 to 30th June 2015. Now, through the Finance Act 2012 the scope of this

    section has been enlarged by enhancing the rate of tax credit under different condition with scope

    of its benefit. The amendments proposed are as under:

    Tax credit allowable against payment of Minimum Tax u/s. 113 & under Final Tax Regime

    Section 65B (1)

    For Companies who purchased & installed Plant & Machinery for balancing, modernization &

    replacement of its existing Plant & Machinery during the period from 01stday of July 2010 to

    30th

    June 2015 shall be entitle for tax credit @10% of the amount invested in the year of

    purchase & installation of such machinery even if the Company pays minimum tax or tax under

    the Final Tax Regime.

    Tax Credit on investment made during the period from 01stJuly 2011 to 30

    thJune 2016

    Section 65B (4)

    A new sub section (4) has been inserted in section 65B of the Income Tax Ordinance 2001 for

    tax credit on investment in Plant & Machinery for balancing, modernization & replacement of

    the existing Plant & Machinery already installed. The salient features are as under:

    i. Company availing this credit must be setup before 01st

    July 2011.

    ii. Investment in Plant & Machinery for the purpose of its Balancing, Modernization &

    Replacement must be made between the periods from 01stJuly 2011 to 30thJune 2016.

    iii. Tax credit @20% will be allowed, in the tax year in which such plant & machinery was

    installed, against tax payable by the Company including minimum tax u/s. 113 & tax

    under the Final Tax Regime.

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    Carryover of Tax Credit

    Section 65B (5)

    As per the provision of newly inserted sub section (5) , if there is no tax payable or the tax

    payable is less than tax credit allowable under sub sections (1)& (4) of the said section than the

    said excess tax credit shall be carried over to succeeding tax years as per the following:

    (1) Tax credit allowed @10% Two succeeding tax years

    (2) Tax credit allowed @ 20% Five succeeding tax years

    TAX CREDIT FOR NEWLY ESTABLISHED UNDERTAKING

    Section 65D

    This scheme of investment incentive was introduced through the Finance Act 2011.Now through

    the Finance Act 2012 following further amendment has been proposed:

    Corporate Dairy Farming also entitle for tax credit

    Section 65D (1)

    It is also proposed to enhance the scope of industrial undertaking eligible for tax credit to include

    corporate dairy farming.

    Tax Credit can be claimed where a company pays minimum tax or tax paid under FTR.

    Section 65D(1)

    It is now proposed to extend the scope of tax credit against minimum tax and tax under FTR

    under any provision of the Ordinance. Previously, such credit was deemed to be available against

    the tax payable under the normal regime only.

    Equity to be raised through cash only

    Section 65D (2)

    Further, to avail tax credit the industrial undertaking is required to be an equity based project

    which has been defined to mean a project setup with 100 per cent equity raised through issuance

    of new shares for cash consideration.

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    No disqualification if Short term loan & finances availed for working capital purpose only

    Section 65D(2)

    However, the short term loans and finances obtained from banking companies or non-banking

    financial institutions for working capital requirements shall not disqualify the taxpayer from the

    claim of tax credit.

    An industrial undertaking when deemed to be setup

    Section 65D (5)

    For the purposes of claim of tax credits under sections 65B, 65D and 65E, an industrial

    undertaking shall be treated to have been setup on the date on which the industrial undertaking is

    ready to go into production, whether trial production or commercial production.

    PROVISIONS FOR TAX CREDIT TO INDUSTRIAL UNDERTAKING ESTABLISHED

    BEFORE 01ST

    JULY 2011 CHANGED

    Section 65E

    The existing provisions of section 65E provides for tax credit to industrial undertaking

    established before 01st July 2011 for equity investment in Balancing, Modernization &

    Replacement or expansion of plant & machinery already installed. Now, the Finance Act 2012

    proposes to replace the existing provision with new provisions. The salient features of the same

    are as under:

    Tax credit for expansion of the existing Plant & Machinery or for the new project

    As per the provision proposed now, the industrial undertaking or Corporate Farming Company

    established before 01stJuly 2011 will only be entitle for tax credit on expansion of the existing

    Plant & Machinery or on investment in new project if the same is made through injection of new

    equity raised through issuance of new shares.

    Tax credit will be allowed for five years

    Tax credit will be allowed for five years from the date of setting up or commencement of

    commercial production from the new plant or expansion project whichever is later.

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    New Equity must be through cash only

    The term new equity means equity raised through fresh issue of shares against cash and shall not

    include loans obtained from Shareholders or Directors.

    RATE OF MINIMUM TAX ON RETAILERS REDUCED

    Section 113A & Division IA of Part I of First Schedule

    The rate of minimum tax on retailers reduced to 0.5% from 1%.

    INCREASE IN TIME PERIOD FOR ISSUE OF NOTICE FOR DEFICIENCIES IN THE

    RETURN OF INCOME FILED

    Section 120(3) & (6)

    As per the existing provision of sub section 6 of section 120 an Officer of Inland Revenue cannot

    issue notice to the tax payer for deficiencies in the return of income filed beyond the end of the

    financial year in which the return of income is filed. Now this period has been proposed to be

    enhanced by 180 days. Hence after this amendment the Officer Inland Revenue can issue notice

    even 180 days after the end of the financial year in which the return was filed.

    ORDER PASSED UNDER SECTION 122-C CAN BE AMENDED

    Section 122(1)

    Currently the provisional assessment order passed u/s. 122C cannot be amended under the

    provisions of section 122 of the Income Tax Ord. 2001. Now an amendment has been made in

    section 122(1), according to which now an order passed u/s. 122C can be amended under section

    122..

    ADDITIONAL COMMISSIONER CAN MAKE ENQUIRIES WHILE FRAMING

    AMENDED ASSESSMENT ORDER

    Section 122(5A)

    The provisions of section 66A of the Repealed Income Tax Ordinance 1979 allowed the

    Inspecting Additional Commissioner to make such enquiries as he deems fit while framing the

    order under said section. Section 122(5A) of the Income Tax Ordinance 2001 does not empowers

    the Additional Commissioner to do so, hence all such orders passed under section 122(5A) in

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    which enquiries were made by the Assessing Officer were annulled by the Appellate Authorities.

    In order to cover this shortcoming an amendment has been made in section 122(5A) according to

    which now the Assessing Officer can make enquiries as he deems fit during the proceedings

    under section 122(5A).

    STAY OF DEMAND BY COMMISSIONER APPEALS & TRIBUNAL INLAND REVENUE

    Section 128(1A) & Proviso in Section 131(5)

    A new sub section 1A has been inserted in section 128 and a proviso substituting the existing

    first, second, & third proviso in section 131(5) according to which:

    1- Commissioner Appeals to provide an opportunity of being heard to the Commissioner

    Inland Revenue against whom the appeal has been filed before granting stay against

    recovery of demand on application made by the taxpayer.

    2- Commissioner Appeals cannot grant stay of demand for more than thirty days in

    aggregate.

    3- Appellate Tribunal Inland Revenue to grant stay from recovery of demand for the period

    not exceeding 180 days.

    CERTIFICATE FROM COMMISSIONER REQUIRED FOR REDUCED RATE OF TAX

    AT IMPORT STAGE ON IMPORT OF RAW MATERIAL BY THE MANUFACTURERS

    Section 148 & Proviso to Clause 9A of Part II of the Second Schedule

    Currently clause 9A of Part II of the Second Schedule provides for reduce rate of tax @3% on

    import of raw material by the manufacturers. Now a proviso has been added to the said clause

    according to which the manufacturers importing their raw material for own use are required to

    obtain certificate of reduced rate of tax from the Commissioner.

    ELECTRONIC MEDIA EXEMPT FROM DEDUCTION OF TAX AT SOURCE

    Sec. 153 & Clause (16A) of Part IV of Second Schedule

    Currently only print media services are exempt from deduction of tax at Source. Now it is

    proposed to enlarge the scope of exemption to cover electronic media also. Hence now no tax

    will be deducted from services rendered by radio & TV channels.

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    DEDUCTION OF TAX BY MANUFACTURER AT THE TIME OF MAKING SALES

    Section 153A

    The existing section 153A is proposed to be replaced by a new provision according to which

    every manufacturer at the time of making sale to distributor, dealer & wholesaler shall collect tax

    at the rate of 1% of the gross amount of sales. Under the scheme of withholding of tax at source

    currently in vogue, the person making payment is under obligation to deduct tax at the time of

    making the payment. But through this newly inserted section surprisingly the person receiving

    the payment has been made the deduct tax. we wonder how in a society where recipient of

    payment is not ready to have the rightful tax deduct from his payments a seller who is at the

    receiving end would be able to force the buyer to pay the 1% of the invoice value proposed in

    this provision? The proposed amendment seems to be extremely difficult proposition.

    INCOME WHICH FALLS UNDER THE FINAL TAX REGIME TO BE TAXED AS SUCH

    EVEN NO TAX IS DEDUCTED ON SUCH INCOME.

    Section 169(2)(f)

    Currently in all the provisions of the Ordinance, relating to the income covered under Final Tax

    Regime, use the term tax deducted. Due to this term it is interpreted that only those income

    will be taxed under FTR which tax has actually been deducted. Hence income which are liable

    for deduction of tax but not deducted were not used to be cover under FTR. Now it has been

    proposed that the term deducted wherever occurring may be replaced with the term

    deductible Hence after this amendment every income under FTR on which tax deducted or not

    deducted has to be taxed as FTR income.

    IMPORTERS, EXPORTERS & SUPPLIERS MAY OPT OUT OF FINAL TAX REGIME

    Section 169 & Clauses 41(A),(AA) & (AAA) of Part IV of the Second Schedule

    An option is proposed to be given to Importers, Exporters & Suppliers who falls under the Final

    Tax Regime to opt out of the said regime with a condition that the tax offered under normal law

    shall not be less than a certain amount of tax already deducted at source. The minimum

    percentage of tax in each class of taxpayer is as under:

    Class of Taxpayer Minimum Tax not less than

    Importer 60% of Tax Deducted

    Exporter 50% of Tax Deducted

    Supplier 70% of Tax Deducted

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    NO ORDER FOR PENALTY IS REQUIRED IF THE TAXPAYER ADMITS HIS DEFAULT

    Section 182 (2) Proviso

    As per the existing provisions of section 182 a penalty is payable only on the basis of order

    passed by the Commissioner. Now an amendment has been proposed according to which where a

    taxpayer found himself in default which attracts penalty under the provision of section 182, than

    he can make the voluntary payment of penalty without an order passed against him.

    RATE OF DEFAULT SURCHARGE ENHANCED

    Section 205

    The Finance Act 2012 has proposed to increase the rate of default surcharge under section 205

    from existing KIBOR plus 3% (App. 16%) per quarter to 18% per annum.The default surchargeis liable to be paid where there is a non or short payment of any tax required to be paid under

    the various provisions of the Ordinance.

    NO DEFAULT SURCHARGE TO BE LEVIED IF PAYMENT OF TAX DUE ON THE

    BASIS OF APPEAL ORDER OF THE COMMISSIONER INLAND REVENUE IS PAID

    WITHIN TIME ALLOWED ON THE NOTICE OF DEMAND

    Proviso to Section 205(1) & (3)

    Two provisos been inserted in section 205(1) & (3) of the Income Tax Ordinance2001.According to which, if a taxpayer decided, not to file appeal with the Appellate Tribunal

    against the order of the Commissioner Appeal passed on the basis of Appeal filed against any

    order passed by an Assessing Officer and makes the payment of the tax due on the basis of

    Appeal order within the time allowed in the notice of demand of the order giving effect of the

    decision of the Commissioner Appeal , than he will not be liable for any default surcharge for

    nonpayment of tax on the basis of original assessment order till the date of payment.

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    THE DAILY LIMIT FOR DEDUCTION OF TAX ON CASH WITHDRAWAL ENHANCED

    Section 231A

    The limit for deduction of tax on cash withdrawal is proposed to be enhanced from existing

    Rs.25,000 to Rs.50,000 per day.

    RATE OF TAX AT THE TIME OF REGISTRATION OF NEW MOTOR VEHICLE

    ENHANCED

    Section 231 B

    The rate of tax at the time of registration of new motor vehicles with engine capacity between

    1300 to 1600 cc is proposed to be increased from Rs.16,875 to Rs.25,000. Interestingly rate of

    tax for registration of motor vehicle with 1600 to 1800cc remains the same at Rs.22,500.

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    FIRST SCHEDULE

    1. Rate of Tax for Non Salaried Individuals.The following are the new rate of Tax for non salaried individuals and Associated of Persons.

    S.No. Taxable Income. Rate of Tax

    1. Where taxable income does not exceed Rs.400,000 0%

    2. Where the taxable income exceeds Rs.400,000 but does notexceed Rs.750,000

    10% of the amountexceeding Rs.400,000

    3. Where the taxable income exceeds Rs.750,000 but does notexceed Rs.1,500,000

    Rs. 35,000 + 15% ofthe amount exceedingRs. 750,000

    4. Where the taxable income exceeds Rs.1,500,000 but doesnot exceed Rs.2,500,000

    Rs. 147,500 +20% ofthe amount exceedingRs. 1,500,000.

    5. Where the taxable income exceeds Rs.2,500,000 Rs. 347,500 + 25% ofthe amount exceedingRs. 2,500,000

    2. Rate of Tax for Salaried Individuals.Following is the new rate of Tax for deduction from salaries for Tax year 2013.

    S.No. Taxable Income. Rate of tax.

    1. Where the taxable income does not exceed Rs.400,000, 0%

    2. Where the taxable income exceeds Rs.400,000 but does notexceed Rs.750,000,

    5% of the amountexceeding Rs. 400,000

    3. Where the taxable income exceeds Rs.750,000 but does notexceed Rs.1,500,000,

    Rs. 17,500 + 10% of theamount exceedingRs. 750,000

    4. Where the taxable income exceeds Rs.1,500,000 but does notexceed Rs.2,500,000,

    Rs. 92,500 + 15% of theamount exceedingRs. 1,500,000

    5. Where the taxable income exceeds Rs.2, 500,000. Rs. 242,500 +20% of theamount exceedingRs. 2,500,000

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    SALES TAX ACT, 1990

    Following amendment has been proposed in the Sales Tax Act, 1990 with effect from 1stJuly,

    2012 and as date mentioned in the provisions or schedule as below;

    ASSESSMENT OF TAX AND RECOVERY OF TAX NOT LEVIED OR SHORT-

    LEVIED OR ERRONEOUSLY REFUNDED.

    Section. 11

    It is proposed to consolidate Section 11 and Section 36 of the Act for smooth assessment

    proceeding. It is proposed to made the following further amendments in snow consolidated

    section 11 of the Act:

    1- Time limit for passing an order on account of inadvertence, error or misconstruction has

    been enhanced from 3 years to 5 years.

    2- . An order on the basis of a show cause notice is required to be passed within 120 days

    from the date of issuance of the show cause notice.

    3- The power of Commissioner to extend the limit for passing an order on the basis of show

    cause notice has been extended from 60 days to 90 days.

    SUPPLIES AGAINST INTERNATIONAL TENDER

    Fifth Schedule of The Sales Tax Act & Rule 50A, 50B and 50C of Sales Rules, 2006

    It is proposed to made supplies against International Tender exempt from Sales Tax instead of

    zero rated. Hence the following amendments are proposed:

    In Fifth Schedule:-

    As supplies against international tender is currently zero rated hence classified in Fifth Schedule

    of the Sales Tax Act. It is proposed to amend the Fifth Schedule of the Act by deleting the same

    from Fifth Schedule. Hence the same is added in the list in Sixth Schedule. After this proposed

    amendment - no input sales tax will be available to a person for supplies against International

    tenders.

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    SRO 555(I)/2008 dated 11th

    June 2008

    This SRO have been rescinded to withdraw exemption from Sales Tax on import of rawmaterial for manufacturing of goods for supply against international tender.

    Rule 50A, 50B and 50C of Sales Rules, 2006

    These rules has also been proposed to be amended and wherever there is term zero rated used in

    these rules the same has been replaced with the term exempt to give effect of supplies made

    against International Tender transfer from zero rated to exempt supplies.

    NOTIFICATIONS

    Sales Tax Rules, 2006 amendment made by SRO 589(I)/2012 dated June 1, 2012 with effect

    from June 2, 2012;

    In Rule 5 of the rules for Registration, Compulsory Registration and Deregistration;- It is

    proposed to insert new proviso to empower board to change the jurisdiction of the case of the

    registered person according to its place of business, registered office or location of

    manufacturing unit.

    in rule 7 for Change in Particulars of Registration:- The new sub Rule inserted for purpose to

    outline the verification of particulars in case of change in nature of business i.e. the change of

    ownership from individual to individual or AOP or corporate persons.

    (4) The change of nature of business (e.g. from individual to AOP or

    corporate person) shall be allowed as under, namely:-

    (i) in case of transfer of individual business from any person to his

    spouses or children, the change shall be made by LRO on receipt of

    verification of documents from RTO;

    (ii) in case of change in nature of business from individual to AOP,

    the change shall be made by LRO on receipt of verification of

    documents from RTO;

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    (iii) in case of change of nature of business from AOP to corporate

    entity, the same shall only be allowed by LRO on receipt of verification

    from RTO or LTU, however, this change shall only be allowed in

    cases where the same persons who are members of AOP are

    nominated as directors in the corporate entity; and

    (iv) in case of transfer of business or change in nature on any other

    account, a new Sales Tax Registration Number shall be issued to the

    entity.

    Rule 12 Blacklisting and Suspension of Registration:- This rule provides the procedure of

    blacklisting and suspension of registration, after amendment, the Board has been empowered to

    make procedure to be followed for suspension or blacklisting of registered person.

    Rule 46 Procedure and Conditions for making zero rated supplies in case of international

    tender for Afghan Refugees:-As the supplies against the international tender is no more zero

    rated, hence, reference to section and schedule of zero rated supplies removes from this rule.

    In rule 50A, 50B and 50C Supplies against International Tender:-These rules revamped to

    give effect of supplies made against International Tender transfer from zero rated supplies to

    exempted supplies.

    SRO 1020(I)/2006 for fixation of minimum value addition on Computer Hardware/Parts

    amended by SRO 590(I)/2012 dated June 1, 2012 with effect from June 2, 2012:- After

    amended the minimum value addition on Commercial Importer of Computer Hardware/parts has

    been deleted, now they have to pay sales tax under Special Procedure for Payment of Sales by

    Importer.

    SRO 811(I)/2009 dated 19th September 2009 for zero rated supply of Polyethylene and

    polypropylene amended by SRO 591(I).2012 dated June 1, 2012 with effect from June 2,

    2012:- Import and supply of Polyethylene and polypropylene was zero rated subject the

    conditions. Now through amendment the zero rated supply of Polyethylene and polypropylene

    becomes exemption from sales tax.

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    Sales Tax Special Procedure Rules, 2007 amended by SRO 592(I)/2012 dated June 1, 2012

    with effect from June 2, 2012;

    58E Audit of Commercial Audit:-Rule 58E was inserted to exclude the commercial importers

    from audit of their sales tax record, however, after amendment, the Commercial Importers are

    not subject to Audit.

    Special Procedure Rules, 2007 for Steel Melters, Re-rollers and Ship Breakers amended by

    SRO 592(I)/2012 dated June 1, 2012 with effect from June 2, 2012:-

    Following is amendment made in the Special Procedure Rules, 2007;

    Rule 58H:- Payment of Tax

    Rate of sales tax per unit electricity consumed increased from Rs. 6/- to Rs. 8/-.

    Ship breakers will pay now Rs. 6,700 per metric ton of re-rollable scrap

    previously it was Rs. 4, 448/-. Ship breakers also have to submit post dated

    cheques to concerned RTO or LTU of amount equivalent of sales tax calculated

    under this Special Procedure as per following;

    Ships Weighing upto 10,000

    LDT

    Four post dated Cheques equal to

    1/4th

    of total sales tax payable

    Shiips weighing over

    10,000 LDT

    Eight post dated Cheques equal to

    1/8thof total sales tax payable

    If the ship breaker default in making payment of sales tax with return, the RTO or

    LTU will encashed those cheques otherwise it will be return to ship breakers on

    payment of sales tax with return.

    Rule 58Ha Steel melters and Re-rollers operating on self-generation basis

    After amendment, operating on self generation basis require permission by the

    Chief Commissioner, gas distribution companies or Oil and Gas Regulatory

    Authority or any other Government authority.

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    Steel melters will pay sales tax Rs. 1,900 per HM3, previously was Rs. 1,392.

    Re-rolling mills now have to pay Rs. 51,822/- per mill size in inches, previously it

    was Rs. 38,964/-

    Rule 58I Invoices and returns:-

    After amendment, invoices will show the following amount of sales tax per metricton.

    Sub

    Rule

    Description New

    Rate Rs.

    Old

    Rate

    Rs.

    1. Sales Tax Invoice issued from Steel Melters to re-rollers 7,349/- 5,526/-

    2. Re-rollers using ingots or billets 8,387/- 5,960/-3. Re-rolles using billets of PASMIC or Heavy Mechanical

    Complex or peoples Steel Mills or imported billets

    9,651/- 7,308/-

    4. Re-rollers using ship plates and re-rollable scrap 7,740/- 5,628/-

    5. Steel re-rollers sales to un-registered persons 1,040/- 780/-

    6. Persons supplying imported MS products to registered

    persons

    Persons supplying imported MS products to un-registered

    persons

    9,651-

    1,040/-

    7,308/-

    780/-

    Rule 58K Values of steel products:-Following value is revised for the purpose of sales tax.

    S. No Description HS Code New Rte Old Rate

    (1) (2) (3) (4) (5)

    1 Billets supplied byPakistan Steel Mills, HeavyMechanical Complex and

    Peoples Steel Mills

    Respective

    heading

    Rs. 54,264/- PMT Rs. 40,800

    2. Imported billets --do-- US$ 585 PMT US $ 440

    3. Re-rollable scrap suppliedby ship breakers

    --do-- Rs. 42,188/- PMT Rs. 30,300

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    Rule 58MA Option to pay sales tax on ad valorem basis:-

    Sub-rule 1 :-Following is amended in sub-clause of this rule;

    a) Before this amendment, registered person who opt this option remain in forcetill the end of financial year, however, this condition is deleted after

    amendment.

    b) Previously the registered persons not to be charged Rs. 6 per unit onelectricity bill under rule 58H, however, after amendment, registered persons

    who opt to pay sales tax on ad valorem basis is to pay sales tax on electricity

    unit billed at rate of Rs. 8/- per unit through electricity bill, however, the same

    is adjustable as input tax against the liability of sales tax determined on ad

    valorem basis at rate specified in sub-section 1 of section 3 of the Sales Tax

    Act, 1990.

    Sub-Rule 2:- Previously, no specific condition of audit of the registered persons,

    however, they were not, after amendment, registered persons who opt to pay sales

    on ad valorem basis are subject to periodical audit.

    Rule 58MB Treatment for unites engaged in exports:-

    This new rule inserted whereas with permission of commissioner, registered

    persons exporting more than fifty percent of their production are not subject to

    pay sales tax with the electricity bill under sub-rule (1) of the rule 58H.

    SRO 1125(I)/2011 dated 31st December 2011 for zero rated supply of Textile and other

    goods amended by SRO 593(I).2012 dated June 1, 2012 with effect from June 2, 2012:- This

    amendment is to exclude only monofilament which of more than 67 decitex from zero rated

    regime.

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    SRO 644(I)/2007 Srws 27th

    June 2007 rescind by SRO 594(I)/2012 dated June 1, 2012 with

    effect from June 2, 2012;

    SRO 644(I)/2007 was issued to levy sale tax rate more than 16%, however, after rescind of this

    SRO, sales tax rate on all the taxable goods as listed in SRO 644(I)/2007 become uniformed i.e.

    16% with effect from June 2, 2012.

    The Section 8B were not applicable on consumer of goods chargeable at higher rate of sales

    under SRO 644(I)/2007. After rescind the said SRO, the manufacturer of consumer of goods

    listed in said SRO, would now have to restrict the claim of input tax during a tax period to 90%

    of output tax.

    SRO 551(I)/2008 dated 11th

    June, 2008 for exemption of raw material and others amended

    by SRO 595(I).2012 dated June 1, 2012 with effect from June 2, 2012:- This amendment is to

    include the following goods in the list of exempted goods;

    S. No. Description of Goods Conditions and Restriction

    30 Waste Paper Supplies thereof

    31 Remeltable Scrap (PCT heading 72.04) Import and supplies thereof

    32 (i) Sprinkler equipment

    (ii)Drip Equipment

    (iii)Spray pumps and nozzles

    Supplies thereof

    SRO 308(I)/2008 dated 24th

    March, 2008 for repayment of sales tax on export of steel

    product paid according the Special Procedure of Steel amended by SRO 596(I).2012 dated

    June 1, 2012 with effect from June 2, 2012:- This amendment is to repay the sales tax paid on

    export of steel product and the rate prescribed in table below is applicable on invoices issued on

    or after June 2, 2012.

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    S. No Description Repayment-cum-Drawback rate

    (1) (2) (3)

    For export made against invoicesissued from the 2nd June, 2012.

    1 Ingots or billets other than imported or of

    Pakistan Steel Mills or Peoples Steel Mills. Rs. 7,349 per metric ton

    2 Mild steel re-rolled products manufactured fromingots and billets other than imported or PakistanSteel Mills or of People Steel Mills

    Rs. 8,387 per metric ton

    3 Mild steel re-rolled products manufactured fromimported billets or billets of Pakistan Steel Millsor People Steel Mills

    Rs. 9,651 per metric ton

    SRO 345(I)/2010 dated 24th

    May, 2010 for fixation of valuation of locally produced ingots

    and billets for registered person paying sales tax on ad volorem basis amended by SRO

    597(I).2012 dated June 1, 2012 with effect from June 2, 2012:- This amendment is raise the

    fixation of minimum valuation of steel products for the registered person who pay sales tax on ad

    volorem basis, following is the new value;

    S. No. Goods Value

    1. Billets Rs. 65.000

    2. Ingots Rs. 60,000

    SRO 549(I)/2008 dated 11thJune, 2008 Zero rated supplies amended by SRO 602(I).2012

    dated June 1, 2012 with effect from June 2, 2012:- This amendment is made to give effect of

    transfer exempted goods into zero rated goods and vice versa; following are list of goods

    included and excluded from zero rates sales tax supplies;

    S. No. Description of Goods Remarks

    1. Cotton Seeds Oil Included in zero rated goods and same is

    zero rated if supplied to registered

    manufacturer of ghee and cocking oil.2. Remeltable Scrap (PCT heading 72.04) Deleted from Zero rated and included in

    exempted goods

    3. (i) Sprinkler equipment(ii)Drip Equipment(iii)Spray pumps and nozzles

    Deleted from Zero rated and included in

    exempted goods

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    SRO 313(I)/2006 dated 31stMarch, 2006 fixation of sales tax rate on import of soyabean

    seeds amended by SRO 604(I).2012 dated June 1, 2012 with effect from June 2, 2012:- This

    amendment is made to reduce the rate of sales tax from seven to sex percent of the value onimport of soyabean seeds by solvent extraction industries.

    SRO 69(I)/2006 dated 28th

    January, 2006 fixation of sales tax rate on import of specific

    goods amended by SRO 605(I).2012 dated June 1, 2012 with effect from June 2, 2012:- This

    amendment is made to reduce the rate of sales tax from fifteen to fourteen percent of the value on

    import of rapeseed, sunflower seed and canola seed by solvent extraction industries.