A
BILL
to give effect to the financial proposals of the Federal Government for the year beginning on the first day of July, 2017, and to amend certain laws
WHEREAS it is expedient to make provisions to give effect to the financial proposals of the Federal Government for the year beginning on the first day of July, 2017, and to amend certain laws for the purposes hereinafter appearing;
It is hereby enacted as follows:-
1. Short title, extent and commencement. - (1) This Act may be called the Finance Act, 2017.
(2) It extends to the whole of Pakistan.
(3) It shall come into force on the first day of July, 2017 except clauses 2(6), 3(7), 4(10) and 5(3) which shall have effect on the next day of assent given to this Act by the President of Islamic Republic of Pakistan.
2. Amendments of 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) in clause (la),-
(i) for the word "or", a comma shall be substituted; and
(ii) after the figure "144", the word and figure "or 147", shall be inserted;
(b) in clause (x), the word "and" shall be omitted; and
(c) in clause (y), for full stop at the end a semicolon and the word "and" shall be substituted and thereafter the following new clause shall be added, namely:-
"(z) "controlled delivery" means supervised and coordinated operational activities that allow suspected consignments of prohibited and restricted goods, including items mentioned in clause (s), to pass out of, through or into the territory of Pakistan, with a view to identifying persons involved in the commission of an offence cognizable under this Act.";
(2) in section 3A, in the marginal note, for the words "Federal Board of Revenue", the word "Customs" shall be substituted;
(3) after section 3AA, the following new section shall be inserted, namely:-
"3AAA. Directorate General of China Pakistan Economic Corridor.- The Directorate General of China Pakistan Economic Corridor shall consist of a Director General and as many Directors, Additional Directors, Deputy Directors, Assistant Directors and such other officers as the Board may, by notification in the official Gazette, appoint.";
(4) in section 7,-
(a) for the words "Federal Excise", the words "Inland Revenue" shall be substituted; and
(b) after the word and comma "Police,", the words "including officers of National Highways and Pakistan Motorway Police", shall be inserted;
(5) after section 8, the following new section shall be inserted, namely:-
"8A. Uniform.- The Board may, by notification in the official Gazette, prescribe rules for wearing of uniform by officers and staff of Customs Service of Pakistan.";
(6) in section 19,-
(a) in sub-section (1), for the words "Federal Government", the words and comma "Board, with prior approval of Minister-in-charge, and" shall be substituted; and
(b) in sub-section (5), for full stop a colon shall be substituted and thereafter the following provisos shall be added, namely:- "Provided that all such notifications, except those earlier rescinded, shall be deemed to have been in force with effect from first day of July, 2016 and shall continue to be in force till thirtieth day of June, 2018, if not earlier rescinded:
Provided further that all notifications issued on or after first day of July, 2016 shall continue to be in force till thirtieth day of June, 2018, if not earlier rescinded.";
(7) in section 25A, in sub-section (2), for full stop at the end a colon shall be substituted and thereafter the following proviso shall be added, namely:-
"Provided that where the value declared in a goods declaration, filed under section 79 or section 131 or mentioned in the invoice retrieved from the consignment, as the case may be, is higher than the value determined under sub-section (1), such higher value shall be the customs value.";
(8) in section 26, after sub-section (1), the following new sub-section shall be inserted, namely:-
"(1A) Subject to rules, the Board or any officer authorized in this behalf may require any person to provide such information as is held by that person which is required for the purposes of End Use Verification of goods.";
(9) in section 33,-
(a) in sub-section (1), for colon, a full stop shall be substituted and thereafter the proviso shall be omitted; and
(b) after sub-section (3), the following new sub-section shall be inserted, namely:-
"(4) No refund shall be allowed under this section, if the sanctioning authority is satisfied that the incidence of customs duty and other levies has been passed on to the buyer or consumer.";
(10) in section 98,-
(a) in sub-section (1), in the proviso, the following new clause (b) shall be inserted and thereafter the existing clause (b) shall be renumbered as clause (c) , namely:-
"(b) by the Chief Collector of Customs, for a period not exceeding one month in case of notified perishable goods and a period not exceeding three months in case of nonperishable goods; and"; and
(b) in sub-section (3), for the word "limit", the word "regulate" shall be substituted;
(11) in section 155F, the brackets and figure "(1)" shall be omitted and after the second proviso, the following third proviso shall be inserted, namely:-
"Provided also that a person aggrieved by an order of the Collector, cancelling or confirming the suspension of his unique user identifier, may, within thirty days of communication of such order, prefer an appeal to the Chief Collector who may pass an order annulling, modifying or confirming the order passed by the Collector.";
(12) in section 156,-
(a) in the TABLE, after clause 7, in the first column and entries relating thereto in the second and third columns, the following new clause and entries relating thereto shall be inserted, namely:-
========================================================
"7A If any agency or Such agency or 14A"; and
person including port person or port
authorities managing authority shall be
or owning a customs liable to a
port, customs airport penalty not
or a land customs exceeding five
station or a container hundred
freight station, fails to thousand
entertain a delay and Rupees.
detention certificate
issued by the officer
of Customs,
========================================================
(b) after omitted sub-section (3), the following new sub-section shall be inserted, namely:-
"(4) Notwithstanding anything contained in this Act, the Board may, by notification in the official Gazette, regulate the imposition, including the time and manner, of any penalty specified in sub-section (1).";
(13) in section 193, in sub-section (1), for the word "and", a comma shall be substituted and after the figure "179", the expression "and 195", shall be inserted;
(14) in section 194A, in sub-section (1), for clause (d), the following shall be substituted, namely:-
"(d) an order passed under section 195 by the Board or an officer of Customs not below the rank of an Additional Collector;";
(15) in section 195, in sub-section (1),-
(a) after the word "Customs", the expression "or the Collector of Customs (Adjudication)" shall be inserted;
(b) the words "and may pass such order as it or he may think fit", shall be omitted;
(c) for the colon, a full stop shall be substituted and thereafter the following new sub-section (1A) shall be inserted, namely:-
"(1A) Where it is deemed necessary to pass fresh orders, in respect of proceedings referred to in sub-section (1), the Board or Collector of Customs or Collector of Customs (Adjudication) may pass the order itself or himself, as the case may be, or assign the case to an officer of equal or higher rank, who may have passed the earlier order, for passing such order as he may think fit:";
(16) after section 219, the following new section shall be inserted, namely:-
"219A. Power to enter into mutual legal assistance agreements on customs matters:- (1) The Board may, of its own motion or upon request from an international organization, a foreign customs administration, or any other foreign competent authority, enter into memorandum of understanding pertaining to mutual legal assistance in customs matters, or in pursuance of any bilateral or a multilateral agreement, undertake activities, which, inter alia, include:
(a) coordinated border management;
(b) information and data sharing;
(c) bilateral and multilateral international special operations, including, by the method of controlled delivery;
(d) capacity building and technical assistance initiatives; and
(e) any other matter to which both or all parties agree.
(2) Notwithstanding anything contained in any other law, for the time being in force, the Board may, on behalf of the Federal Government, request an international organization, a foreign customs administration, or any other foreign competent authority for legal assistance on any matter or offence under this Act, or upon request received therefrom; and
(3) The Board may, by notification in the official Gazette, prescribe the rules for any of the matters enumerated in this section.";
(17) after section 221, following new section shall be inserted, namely:-
"221-A. Validation.- All notifications and orders issued and notified in exercise of the powers conferred upon the Federal Government, before the commencement of Finance Act, 2017, shall be deemed to have been validly issued and notified in exercise of those powers, notwithstanding anything contained in any judgment of the High Court or Supreme Court.";
(18) the First Schedule to the Customs Act, 1969 (IV of 1969), shall be substituted in the manner provided in the First Schedule to this Act; and
(19) the Fifth Schedule to the Customs Act, 1969 (IV of 1969), shall be substituted in the manner provided in the Second Schedule to this Act.
3. Amendments of the Sales Tax Act, 1990. -. In the Sales Tax Act, 1990, the following further amendments shall be made, namely:-
(1) in section 2, after clause (43), a new clause shall be inserted, namely:- "(43A) Tier-1 retailers means,-
(a) a retailer operating as a unit of a national or international chain of stores;
(b) a retailer operating in an air-conditioned shopping mall, plaza or centre, excluding kiosks;
(c) a retailer whose cumulative electricity bill during the immediately preceding twelve consecutive months exceeds rupees six hundred thousand; and
(d) a wholesaler-cum-retailer, engaged in bulk import and supply of consumer goods on wholesale basis to the retailers as well as on retail basis to the general body of the consumers;";
(2) in section 3,-
(i) in sub-section (1), in clause (b), after the word "Pakistan", a comma shall be inserted and thereafter the words "irrespective of their final destination in territories of Pakistan as specified in clause (2) of Article 1 of the Constitution of Islamic Republic of Pakistan" shall be inserted;
(ii) in sub-section (1A), for the expression "and (6)", the expression ",
(6) and section 4" shall be substituted;
(iii) in sub-section (2), in clause (b), for the words "Federal Government", the words "Board with the approval of the Minister Incharge of the Federal Government" shall be substituted;
(iv) in sub-section (3A), for the words "Federal Government", the words "Board with the approval of the Minister Incharge of the Federal Government" shall be substituted;
(v) in sub-section (5), for the words "Federal Government", the words "Board with the approval of the Minister Incharge of the Federal Government" shall be substituted; and
(vi) after sub-section (9), a new sub-section (9A) shall be inserted, namely:-
"(9A) Notwithstanding anything contained in this Act, Tier-1 retailers shall pay sales tax at the rate specified in sub-section (1) and shall observe all the applicable provisions of the Act and rules made thereunder, including the requirement to file monthly sales tax returns in the manner prescribed in Chapter II of the Sales Tax Rules, 2006:
Provided that the retailers making supplies of finished goods of the five sectors specified in Notification No. S.R.O. 1125(I)/2011, dated the 31st December, 2011 shall pay sales tax in respect of such supplies at the rates prescribed in the said Notification:
Provided further that Tier-1 retailers, in lieu of net tax payable at the applicable rate shall, shall have an option to pay sales tax under the turnover regime at the rate of two percent of their total turnover, including turnover relating to exempt supplies, without adjustment of any input tax whatsoever:
Provided also that retailers opting to pay sales tax on the basis of total turnover shall file an option to the Chief Commissioner of Regional Tax Office or Large Taxpayers Unit having jurisdiction by fifteenth day of July opting to pay sales tax on the basis of turnover and such an option shall remain in force for the whole financial year.";
(3) in section 4,-
(i) in the preamble, after the figure "3" appearing for the first time, the expression "except those of sub-section (1A)" shall be inserted; and
(ii) in clause (c), for the words "Federal Government", the words "Board with the approval of the Minister Incharge of the Federal Government" shall be substituted;
(4) in section 7,-
(i) in sub-section (3), for the words "Federal Government", the words "Board with the approval of the Minister Incharge of the Federal Government" shall be substituted; and
(ii) in sub-section (4), for the words "Federal Government", the words "Board with the approval of the Minister Incharge of the Federal Government" shall be substituted;
(5) in section 7A,-
(i) in sub-section (1), for the words "Federal Government", the words "Board with the approval of the Minister Incharge of the Federal Government" shall be substituted; and
(ii) in sub-section (2), for the words "Federal Government", the words "Board with the approval of the Minister Incharge of the Federal Government" shall be substituted;
(6) in section 8, in sub-section (1), in clause (b), for the words "Federal Government", the words "Board with the approval of the Minister Incharge of the Federal Government" shall be substituted;
(7) in section 13,-
(i) in sub-section (2), in clause (a), for the words "Federal Government", the words "Board with the approval of the Minister Incharge of the Federal Government" shall be substituted; and
(ii) in sub-section (6), for the words "Federal Government", the word "Board" shall be substituted; and
(iii) in sub-section (7), for the full stop at the end, a colon shall be substituted and thereafter the following provisos shall be added, namely:-
"Provided that all such notifications, except those earlier rescinded, shall be deemed to have been in force with effect from 1st July, 2016 and shall continue to be in force till 30th June, 2018, if not earlier rescinded:
Provided further that all notifications issued on or after 1st July, 2016 shall continue to be in force till 30th June, 2018, if not earlier rescinded.";
(8) in section 30,-
(a) in sub-section (1),-
(i) after clause (e), a new clause (ea) shall be inserted, namely:-
"(ea) District Taxation Officer"; and
(ii) after clause (f), a new clause (fa) shall be inserted, namely:- "(fa) Assistant Director Audit";
(b) after sub-section (2), the following sub-sections shall be inserted, namely:-
"(2A) The Chief Commissioners Inland Revenue shall perform their functions in respect of such persons or classes of persons of such areas as the Board may direct.
(2B) The Commissioners Inland Revenue shall perform their functions in respect of such persons or classes of persons of such areas as the Chief Commissioner to whom they are sub-ordinate may direct.";
(c) in sub-section (3),-
(i) after the words "Deputy Commissioner Inland Revenue", the comma and words ", District Taxation Officer" shall be inserted; and
(ii) after the words "Assistant Commissioner Inland Revenue", the comma and words ", Assistant Director Audit" shall be inserted; and
(d) in sub-section (4),-
(i) after the words "Deputy Commissioner Inland Revenue", the comma and words ", District Taxation Officer" shall be inserted; and
(ii) after the words "Assistant Commissioner Inland Revenue", the comma and words ", Assistant Director Audit" shall be inserted;
(9) in section 33, in the Table, after serial number 22 and entries relating thereto, a new serial number 23 and entries relating thereto in columns
(1) , (2) and (3) shall be added, namely:-
============================================================================
"23. Any person who (i) Such cigarette 40C (2)
manufactures, stock shall be liable to
possesses, transports, outright confiscation and
distributes, stores or destruction. Any person
sells cigarette packs committing the offence
without, or with shall pay a penalty of
counterfeited, tax twenty-five thousand
stamps, banderoles, rupees or one hundred
stickers, labels or per cent of the amount of
barcodes. tax involved, whichever is
higher. He shall, further
be liable, upon conviction
by a Special Judge, to
imprisonment for a term
which may extend to five
years, or with additional
fine which may extend to
an amount equal to the
loss of tax involved, or
with both.
(ii) In case of
transport of cigarettes
without, or with
counterfeited, tax stamps,
banderoles, stickers,
labels or barcodes,
permanent seizure of the
vehicle used for
transportation of non-
conforming or counterfeit
cigarette packs; and
(iii) In case of repeat
sale of cigarettes without
or with counterfeited, tax
stamps, banderoles,
stickers, labels or
barcodes, the premises
used for such sale be
sealed for a period not
exceeding 15 days."
============================================================================
(10) in section 48, in sub-section (1), in clause (f), for the full stop at the end, a colon shall be substituted and thereafter the following proviso shall be added, namely:-
"Provided that the Commissioner shall not issue notice under this section or the rules made thereunder for recovery of any tax due from a taxpayer if the said taxpayer has filed an appeal under section 45B in respect of the order under which the tax sought to be recovered has become payable and the appeal has not been decided by the Commissioner (Appeals), subject to the condition that twenty-five per cent of the amount of tax due has been paid by the taxpayer.";
(11) in section 56,-
(a) in sub-section (1), in clause (b), the word "or" shall be omitted and in clause (c), for the full stop, a semi colon and word "; or" shall be substituted and thereafter, the following shall be added, namely:- "(d) sent electronically through email or to the e-folder maintained for the purpose of e-filing of Sales Tax-cum-Federal Excise returns by the Limited Companies, both public and private."; and
(b) In sub-section (2), in clause (b), the word "or" shall be omitted and in clause (c), for the full stop, a semi colon and word "; or" shall be substituted and thereafter, the following shall be added, namely:- "(d) sent electronically through email or to the e-folder maintained for the purpose of e-filing of Sales Tax-cum- Federal Excise returns by the Limited Companies, both public and private.";
(12) in section 60, for the words "Federal Government", the words "Board with the approval of the Minister Incharge of the Federal Government" shall be substituted;
(13) in section 65, for the words "Federal Government", the words "Board with the approval of the Minister Incharge of the Federal Government" shall be substituted;
(14) in section 71, in sub-section (1), for the words "Federal Government", the words "Board with the approval of the Minister Incharge of the Federal Government" shall be substituted;
(15) after section 74, a new section 74A shall be inserted, namely:-
"74A. Validation.- All notifications and orders issued and notified in exercise of the powers conferred upon the Federal Government, before the commencement of Finance Act, 2017, shall be deemed to have been validly issued and notified in exercise of those powers, notwithstanding anything contained in any judgment of the High Court or Supreme Court.";
(16) in the Third Schedule, in the Table,-
(i) against serial number 2, in column (3), for the figure "21.05", the figure "2105.0000" shall be substituted; and
(ii) serial number 32 and entries relating thereto in columns (2) and (3) shall be omitted;
(17) in the Fifth Schedule, in serial number 12, in sub-serial number (xvii), for the words "preparations for infant use put up for retail sale", the words "Preparations suitable for infants or young children, put up for retail sale" shall be substituted;
(18) in the Sixth Schedule,-
(A) in Table 1,-
(i) against serial number 1 ,-
(a) for the figure "0101.3100" the figure "0101.3000" shall be substituted;
(b) the figure "0102.1010" shall be omitted;
(c) the figure "0105.1900" shall be omitted;
(ii) against serial number 15,-
(a) the figure "0803.0000" shall be omitted;
(b) for the figure "0805.2010", the figure "0805.2910" shall be substituted; and
(c) for the figure "0805.2090", the figures "0805.2100, 0805.2200 and 0805.2990" shall be substituted;
(iii) against serial number 17, for the figure "0910.1000", the figure "09.10" shall be substituted;
(iv) in serial number 19, the figure "1102.3000" shall be omitted;
(v) in serial number 20, the figure "1209.1010" shall be omitted;
(vi) against serial number 23, for the figure "1212.9990", the figure "1212.9300" shall be substituted;
(vii) in serial number 26, the figure "2009.8000" shall be omitted;
(viii) in serial number 31, the figures "8523.5100 and 8523.5200" shall be omitted;
(ix) against serial number 33, for the figure "4907.0000", the figure "49.07" shall be substituted;
(x) against serial number 38, for the figure "7108.2000", the figure "7108.1390" shall be substituted;
(xi) against serial number 81, for the figure "1207.2000", the figure "1207.1000" shall be substituted;
(xii) in serial number 83, the figure "1604.3000" shall be omitted;
(xiii) in serial number 84, in column (2), for the words "preparations for infant use put up for retail sale", the words "Preparations suitable for infants or young children, put up for retail sale" shall be substituted;
(xiv) against serial number 91, in column (3), for the figure "8539.3910", the figure "8539.3110" shall be substituted;
(xv) in serial number 97, in column (2), for the words "pens and ball pens", the words "pens, ball pens, markers and porous tipped pens" shall be substituted;
(xvi) in serial number 100A, the following amendments shall be made, namely:-
(a) after the words "materials and equipment", a bracket shall be inserted and therein the words and commas "plant, machinery, equipment, appliances and accessories" shall be inserted; and
(b) for the word "Gawadar" wherever appearing the word "Gwadar" shall be substituted;
(xvii) after serial number 100B, a new serial number 100C shall be inserted, namely:-
"100C. Vehicles imported by China Overseas Ports Holding Company Limited (COPHCL) and its operating companies namely (i) China Overseas Ports Holding Company Pakistan (Private) Limited (ii) Gwadar International Terminal Limited, (iii) Gwadar Marine Services Limited and (iv) Gwadar Free Zone Company Limited, for a period of twenty three years for construction, development and operations of Gwadar Port and Free Zone Area subject to limitations, conditions prescribed under PCT heading 9917 (3)";
(xviii) in serial number 106, in column (3), the figure "0206.2000" shall be omitted;
(xix) in serial number 108, against sub-serial (h), in column (3), for the figure "3824.9099", the figure "3824.8400" shall be substituted;
(xx) against serial number 110, in sub serial (c), in column (3), for the figure "8543.7090", the figures and word "8539.5010 and 8539.5020" shall be substituted;
(xxi) against serial number 113, in sub-serial (2), in column (3), for the figure "8424.8100", the figure "8424.4100" shall be substituted;
(xxii) against serial number 114, in sub-serial (2), in column (3), for the figure "9406.0010", the figures and word "9406.1010 and 9406.9010" shall be substituted;
(xxiii) in serial number 130, in column (3), the following shall be substituted; namely:-
"Sodium Iron (Na Fe EDTA), and other premixes of Vitamins, Minerals and Micro-nutrients (food grade) and subject to conditions imposed for importation under the Customs Act, 1969";
(xxiv) against serial number 133,-
(I) in column (2),-
(a) the words "ingredients for pesticides" shall be omitted;
(b) the words "Cadusafos Technical Material" shall be omitted;
(c) the words "ingredients for pesticides" shall be omitted;
(d) the words "ingredients for pesticides" shall be omitted;
(e) the words "other ingredients for pesticides" shall be omitted;
(f) the words "Tiethanolamine and its salts" shall be omitted;
(g) the words "ingredients for pesticides" shall be omitted; and
(II) in column (3),-
(a) the figure "2903.3040" shall be omitted;
(b) the figure "2903.6900" shall be omitted;
(c) the figure "2918.9010" shall be omitted;
(d) the figure "2919.0010" shall be omitted;
(e) the figure "2919.0090" shall be omitted;
(f) the figure "2922.1300" shall be omitted;
(g) the figure "2924.2930" shall be omitted;
(h) in column (3), for the figure "2939.9910", the figure "2939.8010" shall be substituted;
(i) in column (3), for the figure "2939.9910", the figure "2939.8010" shall be substituted;
(j) in column (3), for the figure "3824.9099", the figure "3824.9999" shall be substituted;
(xxv) after serial number 133 and entries relating thereto in columns (1), (2) and (3), the following new serial numbers and entries relating thereto shall be inserted, namely:-
========================================================================
"134. Goods received as gift or donation from 9908
a foreign government or organization by
the Federal or Provincial Governments
or any public sector organization subject
to recommendations of the Cabinet
Division and concurrence by the Federal
Board of Revenue.
135. Sunflower and canola hybrid seeds Respective
meant for sowing heading
136. Combined harvesters upto five years old 8433.5100
137. Single cylinder agriculture diesel 8408.9000."; and
engines (compression-ignition internal
combustion piston engines) of 3 to 36
HP, and CKD kits thereof
========================================================================
(B) in Table-3,-
(a) in the preamble, in sub-paragraph (ii), after the figure "14", the figure and word "14A and 15" shall be inserted; and
(b) in the Annexure,-
(i) In serial number 2, in column (3), for the figure "3824.9099", the figure "3824.9999" shall be substituted; and
(ii) for existing serial numbers 14 and 15 and entries relating thereto, the following new serial numbers 14, 14A, 15 and 15A and entries relating thereto shall be substituted; namely:-
===============================================================================
"14. Following items for use with
solar energy:- 8501.3110
Solar Power Systems. 8501.3210
(1) Off-grid/On-grid solar power
system (with or without provision
for USB/charging port)
comprising of :
(i) PV Module. 8541.4000
(ii) Charge controller. 9032.8990
(iii) Batteries for specific 8507.2090
utilization with the system (not
exceeding 50 Ah in case of
portable system).
(iv) Essential connecting wires 8507.3000
(with or without switches). 8507.6000
(v) Inverters (off-grid/on-grid/ 8544.4990
hybrid with provision for direct
connection/input renewable
energy source and with
Maximum Power Point Tracking
(MPPT).
(vi) Bulb holder 8504.4090
(2) Water purification plants 8536.6100
operating on solar energy. 8421.2100
14A. Following systems and items
for dedicated use with
renewable source of energy
like solar, wind, geothermal
etc.
1. (a) Solar Parabolic Trough 8502.3900
Power Plants.
(b) Parts for Solar Parabolic
Power Plants.
(i) Parabolic Trough collectors 8503.0010
modules.
(ii) Absorbers/Receivers tubes. 8503.0090
(iii) Steam turbine of an output 8406.8100
exceeding 40MW.
(iv) Steam turbine of an output 8406.8200
not exceeding 40MW.
(v) Sun tracking control system. 8543.7090
(vi) Control panel with other 8537.1090
accessories.
2. (a) Solar Dish Stirling 8412.8090
Engine.
(b) Parts for Solar Dish Stirling
Engine.
(i). Solar concentrating dish. 8543.7000
(ii). Sterling engine. 8543.7000
(iii). Sun tracking control system. 8543.7090
(iv). Control panel with 8406.8200
accessories.
(v). Stirling Engine Generator 8501.6100
3. (a) Solar Air Conditioning 8415.1090
Plant
(b) Parts for Solar Air
Conditioning Plant
(i). Absorption chillers. 8418.6990
(ii). Cooling towers. 8419.8910
(iii). Pumps. 8413.3090
(iv). Air handling units. 8415.8200
(v). Fan coils units. 8415.9099
(vi). Charging & testing 9031.8000
equipment.
4. (a) Solar Desalination 8421.2100
System
(b) Parts for Solar Desalination
System
(i). Solar photo voltaic panels. 8541.4000
(ii). Solar water pumps. 8413.3090
(iii). Deep Cycle Solar Storage 8507.2090
batteries.
(iv). Charge controllers. 9032.8990
(v). Inverters (off grid/on grid/ 8504.4090
hybrid) with provision for
direct connection/input from
renewable energy source
and with Maximum Power
Point Tracking (MPPT)
5. Solar Thermal Power Plants 8502.3900
with accessories.
6. (a) Solar Water Heaters with 8419.1900
accessories.
(b) Parts for Solar Water
Heaters
(i). Insulated tank 7309.0000
7310.0000
(ii). Vacuum tubes (Glass) 7020.0090
(iii). Mounting stand Respective
(iv). Copper and Aluminum tubes headings
(c) Accessories: Respective
(i) Electronic controller heading
(ii) Assistant/feeding tank
(iii) Circulation Pump
(iv) Electric heater/immersion
rod (one piece with one solar
water heater)
(v) Solenoid valve (one piece
with one solar water heater)
(vi) Selective coating for
absorber plates
7. (a) PV Modules. 8541.4000
(b) Parts for PV Modules
(i). Solar cells. 8541.4000
(ii). Tempered Glass. 7007.2900
(iii). Aluminum frames. 7610.9000
(iv). O-Ring. 4016.9990
(v). Flux. 3810.1000
(vi). Adhesive labels. 3919.9090
(vii). Junction box & cover. 8538.9090
(viii). Sheet mixture of paper and 3920.9900
plastic
(ix). Ribbon for PV Modules Respective
(made of silver &Lead). headings
(x). Bypass diodes. 8541.1000
(xi). EVA (Ethyl Vinyl Acetate) 3920.9900
Sheet (Chemical).
8. Solar Cell Manufacturing
Equipment.
(i). Crystal (Grower) Puller (if 8479.8990
machine).
(ii). Diffusion furnace. 8514.3000
(iii). Oven. 8514.3000
(iv). Wafering machine. 8486.1000
(v). Cutting and shaping 8461.9000
machines for silicon ingot.
(vi). Solar grade polysilicon 3824.9999
material.
(vii). Phosphene Gas. 2853.9000
(viii). Aluminum and silver paste. Respective
headings
9. Pyranometers and 9030.8900
accessories for solar data
collection.
10. Solar chargers for 8504.4020
charging electronic devices.
11. Remote control for solar 8543.7010
charge controller.
12. Wind Turbines.
(a) Wind Turbines for grid 8412.8090
connected solution above 200
KW (complete system).
(b) Wind Turbines upto 200 KW 8412.8090
for off-grid solutions comprising
of:
(i). Turbine with Generator/ Respective
Alternator. headings
(ii). Nacelle with rotor with or
without tail.
(iii). Blades.
(iv). Pole/Tower.
(v). Inverter for use with Wind
Turbine.
(vi). Deep Cycle Cell/Battery (for 8507.2090
use with wind turbine).
13. Wind water pump 8413.8100
14. Geothermal energy
equipment.
(i). Geothermal heat pumps. 8418.6100
(ii). Geothermal Reversible 8418.6990
Chillers.
(iii). Air handlers for indoor quality 8415.8300
control equipment.
(iv). Hydronic heat pumps. 8418.6100
(v). Slim Jim heat exchangers. 8419.5000
(vi). HDPE fusion tools. 8515.8000
(vii). Geothermal energy 8419.8990
installation tools and
equipment.
(viii). Dehumidification equipment. 8479.6000
(ix). Thermostats and intellizone.
9032.1090
15. Any other item approved Respective
by the Alternative Energy headings
Development Board (AEDB)
and concurred to by the FBR.
15. Following items for promotion
of renewable energy
technologies or for
conservation of energy:-
(i) SMD/LED/LVD lights with or 9405.1090
without ballast, fittings and 8539.3290
fixtures. 8543.7090
(ii) SMD/LED/LVD street lights, 9405.4090
with or without ballast, PV 8539.3290
module, fitting and fixtures 8543.7090
(iii) Tubular day lighting device. 9405.5010
(iv) Wind turbines including 8502.3100
alternators and mast.
(v) Solar torches. 8513.1040
(vi) Lanterns and related 8513.1090
instruments.
(vii) LVD induction lamps. 8539.3290
(viii) LED bulb/tube lights. 8543.7090
(ix) PV module, with or without, 8541.4000
the related components 8504.4090
including invertors (off- 9032.8990
grid/on grid/hybrid) with 8507.0000
provision for direct
connection/input from
renewable energy source
and with Maximum Power
Point Tracking (MPPT),
charge controllers and solar
batteries.
(x) Light emitting diodes (light
emitting in different colors).
(xi) Water pumps operating on
solar energy along with solar 8541.5000
pump controllers
(xii) Energy saver lamps of
varying voltages
(xiii) Energy Saving Tube Lights. 8413.7010
(xiv) Sun Tracking Control 8413.7090
System 8504.4090
(xv) Invertors (off-grid/on
grid/hybrid) with provision for 8539.3110
direct connection/input from 8539.3210
renewable energy source
and with Maximum Power 8539.3120
Point Tracking (MPPT). 8539.3220
(xvi) Charge controller/current
controller. 8543. 7090
Provided that exemption under
this serial shall be available with
effect from 01.07.2016. 8504.4090
9032.8990
15A Parts and components for If imported by
manufacturing LED lights: LED light
(i) Aluminum housing/shell manufacturers
for LED (LED light fixture) 9405.1090 registered
(ii) Metal clad printed circuit under the
boards (MCPCB) for LED Sales Tax
(iii) Constant current power 8543.0000 Act, 1990
supply for of LED lights (1-300W) subject to
(iv) Lenses for LED lights annual quota
8504.4090 determination
by the Input
Output Co-
9001.9000 efficient
Organization
(IOCO)";
===============================================================================
(19) in the Eight Schedule, in Table-1,-
(i) in serial number 26, in sub-serial (iv), in column (3), for the figure "8432.3090", the figure "8432.3900" shall be substituted;
(ii) in serial number 27, in column (3),-
(a) in sub-serial (iv), for the figure "8432.4000", the figure "8432.4100" shall be substituted;
(b) in sub-serial (vi), for the figure "8432.3010", the figure "8432.3100" shall be substituted; and
(c) in sub-serial (vii), for the figure "8432.3090", the figure "8432.3900" shall be substituted;
(iii) in serial number 34, in column (5), for the figure "2017", the figure '2018" shall be substituted; and
(iv) after serial number 34 and the entries relating thereto, the following new serial numbers and entries relating thereto in columns (2), (3),
(4) and (5) shall be inserted, namely:-
=============================================================================
"35. DAP Respective Rs. 100 Nil
heading per 50 kg
bag
36. NP (22-20) Respective Rs. 168 If manufactured
heading per 50 kg from gas other
bag than imported
LNG
37. NP (18-18) Respective Rs. 165 If manufactured
heading per 50 kg from gas other
bag than imported
LNG
38. NPK-I Respective Rs. 251 If manufactured
heading per 50 kg from gas other
bag than imported
LNG
39. NPK-II Respective Rs. 222 If manufactured
heading per 50 kg from gas other
bag than imported
LNG
40. NPK-III Respective Rs. 341 If manufactured
heading per 50 kg from gas other
bag than imported
LNG
41. SSP Respective Rs. 31 per If manufactured
heading 50 kg bag from gas other
than imported
LNG
42. CAN Respective Rs. 98 per If manufactured
heading 50 kg bag from gas other
than imported
LNG
43. Natural gas Respective 10% If supplied to
heading fertilizer plants
for
manufacturing
of urea
44. Phosphoric acid 2809.2010 5% If imported by
fertilizer
company for
manufacturing
of DAP
45. Following Import and
machinery for supply
poultry sector :
(i) Machinery 8436.1000 7%
for preparing
feeding stuff
(ii) Poultry 8436.2100 7%
incubators and and
brooders 8436.2900
(iii) Insulated 9406.0090 7%
sandwich panels
(iv) Poultry 9406.0020 7%
sheds
(v) Evaporative 8479.6000 7%
air cooling system
(vi) Evaporative 8479.9010 7%
cooling pad
46. Multimedia 8528.6210 10% If imported by
projectors educational
institution
47. Locally produced 27.01 Rs. 425 Nil";and
coal per metric
tonne or
17% ad
valorem,
whichever
is higher
=============================================================================
(20) in the Ninth Schedule, in the Table, against serial number 2,-
(a) in column (3),-
(i) for the figure "300", the figure "650" shall be substituted; and
(ii) for the figure "1000", the figure "650" shall be substituted; and
(b) in column (4),-
(i) for the figure "300", the figure "650" shall be substituted; and
(ii) for the figure "1000", the figure "650" shall be substituted.
4. Amendment of Ordinance, XLIX of 2001.- In the Income Tax Ordinance, 2001 (XLIX of 2001), the following further amendments shall be made, namely:-
(1) in section 2,-
(a) in clause (22A), after the word "consumer", occurring for the third time, the words "excluding durable goods" shall be inserted;
(b) in clause (38A), after the word "officer", occurring for the third time, the comma and the words ", District Taxation Officer, Assistant Director Audit," shall be inserted;
(c) after clause (62), the following new clause shall be inserted, namely:-
"(62A) "startup" means a business of resident individual, AOP or a company incorporated or registered in Pakistan on or after first day of July, 2012 and the person is engaged in or intends to offer technology driven products or services to any sector of the economy provided that the person is registered with and duly certified by the Pakistan Software Export Board (PESB) and having turnover of less than one hundred million in each of the last five tax years.";
(2) in section 4B, in sub-section (1), for the expression "and 2016" the expression "to 2017" shall be substituted;
(3) for section 5A, the following section shall be substituted, namely:-
"5A. Tax on undistributed profits - (1) Subject to this Ordinance, for tax year 2017 and onwards, a tax shall be imposed at the rate of ten percent, on every public company other than a scheduled bank or a modaraba, that derives profit for a tax year but does not distribute at least forty percent of its after tax profits within six months of the end of the tax year through cash or bonus shares:
Provided that for tax year 2017, bonus shares or cash dividends may be distributed before the due date mentioned in sub-section (2) of section 118, for filing of a return.
(2) The provisions of sub-section (1) shall not apply to-
(a) a company qualifying for exemption under clause (132) of Part I of the Second Schedule; and
(b) a company in which not less than fifty percent shares are held by the Government."
(4) in section 7C, for sub-section (4), the following shall be substituted, namely:-
"(4) This section shall apply to projects undertaken for development and sale of residential, commercial or other plots initiated and approved. -
(a) during tax year 2017 only;
(b) for which payment under rule 13S of the Income Tax Rules, 2002 has been made by the developer during tax year 2017; and
(c) the Chief Commissioner has issued online schedule of advance tax installments to be paid by the developer in accordance with rule 13ZB of the Income Tax Rules, 2002.";
(5) in section 7D, for sub-section (4), the following shall be substituted, namely:-
"(4) This section shall apply to projects undertaken for development and sale of residential, commercial or other plots initiated and approved. -
(a) during tax year 2017 only;
(b) for which payment under rule 13S of the Income Tax Rules, 2002 has been made by the developer during tax year 2017; and
(c) the Chief Commissioner has issued online schedule of advance tax installments to be paid by the developer in accordance with rule 13U of the Income Tax Rules, 2002.";
(6) in section 8, in sub-section (1),-
(a) for the expression ", 7B, 7C and 7D" the expression "and 7B" shall be substituted; and
(b) in clause (d), for the expression, 7B, 7C and 7D" the expression "and 7B" shall be substituted;
(7) in section 13, in sub-section (7), in the second proviso, for the words "five hundred thousand" the words "one million" shall be substituted;
(8) in section 21, in clause (o), for the word "five" the word "ten" shall be substituted;
(9) in section 22, in sub-section (15), for the full stop at the end, a colon shall be substituted and thereafter the following proviso shall be added, namely:-
"Provided that where a depreciable asset is jointly owned by a taxpayer and an Islamic financial institution licensed by the State Bank of Pakistan or Securities and Exchange Commission of Pakistan, as the case may be, pursuant to an arrangement of Musharika financing or diminishing Musharika financing, the depreciable asset shall be treated to be wholly owned by the taxpayer.";
(10) in section 53,-
(i) in sub-section (2) after the word "The", occurring for the first time, the expression "Board with the approval of Minister Incharge of the" shall be inserted;
(ii) in sub-section (4), for the full stop, a colon shall be substituted and thereafter the following provisos shall be added, namely:-
"Provided that all such notifications, except those earlier rescinded, shall be deemed to have been in force with effect from the first day of July, 2016 and shall continue to be in force till the thirtieth day of June, 2018, if not earlier rescinded:
Provided further that all notifications issued on the first day of July, 2016 shall continue to be in force till the thirtieth day of June, 2018, if not earlier rescinded.";
(11) sections 64A and 64AB shall be re-numbered as 60C and 60D respectively;
(12) in section 60D, re-numbered as aforesaid, in sub-section (1), after the word "one" the words "and a half" shall be inserted;
(13) in section 62A, in sub-section (2), in component C of the formula, in clause
(c) , after the word "hundred" the words "and fifty" shall be inserted;
(14) section 65A shall be omitted;
(15) in section 65C, in sub-section (1), for the words and full stop "tax year." the words and colon "three tax years:" shall be substituted and thereafter the following proviso shall be added, namely:-
"Provided that the tax credit for the last two years shall be ten per cent of the tax payable.";
(16) in section 94, sub-section (3) shall be omitted.
(17) in section 100, in sub-section (2) for the full stop at the end, a colon shall be substituted and thereafter the following proviso shall be added namely:-
"Provided that the for tax year 2017 and onward the provisions of this sub-section shall not apply on profit and gains derived from sui gas field.";
(18) in section100C, -
(a) in sub-section (1), after clause (c), the following new clause shall be added, namely:-
"(d) the administrative and management expenditure does not exceed 15% of the total receipts."; and
(b) after section (1), the following new sections shall be inserted, namely:-
"(1A) Notwithstanding anything contained in sub-section (1), surplus funds of non-profit organization shall be taxed at a rate of ten percent.
(1B) For the purpose of sub-section (1A), surplus funds mean funds or monies:
(i) not spent on charitable and welfare activities during the tax year;
(ii) received during the tax year as donations, voluntary contributions, subscriptions and other incomes;
(iii) or more than twenty five percent of the total receipts of the non-profit organization received during the tax year;
(iv) are not part of restricted funds:
Explanation: For the purpose of this subsection, "restricted funds" mean any fund received by the organization but could not be spent and treated as revenue during the year due to any obligation placed by the donor."
(19) in section 113, in sub-section (1), in clause (e), for the words "one per cent" the expression "the percentage as specified in column (3) of the table in Division IX of Part-I of the First Schedule" shall be inserted;
(20) in section 114, in sub-section (6), in clause (c), the expression "122C," shall be omitted;
(21) in section 115, in sub-section (3), after the figures "(iii)" the expression ",
(iv) , (v) and (vi)" shall be inserted;
(22) in section 116, -
(a) sub-section (2A) shall be omitted; and
(b) in sub-section (3), for the expression "an assessment, for the tax year to which it relates, is made under sub-section (1) or subsection (4) of section 122" the expression "the receipt of notice under sub-section (9) of section 122, for the tax year to which it relates" shall be substituted;
(23) in section 119, in sub-section (4), for the full stop at the end, a colon shall be substituted and thereafter the following proviso shall be added, namely:-
"Provided that where the Commissioner has not granted extension for furnishing return under sub-section (3) or sub-section
(4) , the Chief Commissioner may on an application made by the taxpayer for extension or further extension, as the case may be, grant extension or further extension for a period not exceeding fifteen days unless there are exceptional circumstances justifying a longer extension of time.";
(24) in section 121, in sub-section (1), after clause (aa), the following new clause shall be inserted, namely:-
"(ab) furnish return of income in response to notice under subsection (3) or sub-section (4) of section 114; or";
(25) in section 122, in sub-section (1), the expression "or issued under section 122C," shall be omitted;
(26) section 122C shall be omitted;
(27) in section 127, in sub-section (1), the expression "except an assessment order under section 122C," shall be omitted;
(28) in section 130, in sub-section (3), -
(a) in clause (a), after the semicolon, the word "or" shall be inserted;
(b) in clause (b), for the expression "; or" a full stop shall be substituted; and
(c) clause (c) shall be omitted;
(29) in section 137, in sub-section (2), for the colon, occurring first, a full stop shall be substituted and thereafter both the provisos shall be omitted;
(30) in section 146,-
(a) in the marginal note, after the word "Kashmir", the words "and Gilgit-Baltistan" shall be inserted; and
(b) in sub-section (1), after the word "Kashmir", wherever occurring, the words "or Gilgit-Baltistan" shall be inserted;
(31) in section 147, in sub-sections (2) and (4B), for the words "five hundred thousand", the words "one million" shall be substituted;
(32) in section 148, in sub-section (7), -
(a) clause (b) shall be omitted;
(b) in clause (c), for the full stop at the end, a semicolon shall be substituted;
(33) in section 152,-
(a) in sub-section (1AAA), for the expression "Division IIIA", the expression "Division II" shall be substituted;
(b) in sub-section (1B), for the full stop at the end, a colon shall be substituted and thereafter the following proviso shall be added, namely:-
"Provided that the provisions of this sub-section shall not apply in respect of a non-resident person unless he opts for the final tax regime.";
(c) in sub-section (2A), clauses (i), (ii) and (iii) shall be re-numbered as
(a) , (b) and (c) respectively; and
(d) for sub-section (4A), the following shall be substituted, namely:-
"(4A) The Commissioner may, on application made by the recipient of payment referred to in sub-section (1A) having permanent establishment in Pakistan, or by a recipient of payment referred to in sub-section (2A), as the case may be, and after making such inquiry as the Commissioner thinks fit, allow by order in writing, in cases where the tax deductable under sub-section (1) or sub-section (2A) is adjustable, any person to make the payment without deduction of tax or deduction of tax at a reduced rate.";.
(34) in section 153, in sub-section (1), in clause (c), for the full stop at the end, a colon shall be substituted and thereafter the following proviso shall be added, namely:-
"Provided that where the recipient of the payment under clause (b) receives the payment through an agent or any other third person and the agent or, as the case may be, the third person retains service charges or fee, by whatever name called, from the payment remitted to the recipient, the agent or the third person shall be treated to have been paid the service charges or fee by the recipient and the recipient shall collect tax along with the payment received.";
(35) in section 165, after sub-section (2), the following new sub-section shall be inserted, namely:-
"(2A) Any person who, having furnished statement under sub-section (1) or sub-section (2), discovers any omission or wrong statement therein, may file a revised statement within sixty days of filing of statement under sub-section (1) or sub-section (2), as the case may be.";
(36) in section 165B,-
(a) in sub-section (1), after the word "non-resident" the words "or any other reportable" shall be inserted;
(b) after sub-section (2), the following new sub-section shall be added, namely:-
"(3) for the purpose of this section, the terms "reportable person" and "financial institution" shall have the meaning as provided in Chapter XIIA of the Income Tax Rules, 2002
(37) in section 176, in sub-section (1), in clause (c), after the word "accountants", the words ", or a firm of cost and management accountants as defined under the Cost and Management Accountants Act, 1966 (XIV of 1966)" shall be inserted;
(38) in section 182, in the table,-
(a) in column (1) against serial number (7) in column (4), after the figures "174" a comma and figure ", 108" shall be added;
(b) in column (1) against serial number (9) in column (2) after the figure "176" the word and figure "or 108" shall be added; and
(c) after serial number (16) the following new serial number and entries relating thereto in columns (2), (3) and (4) shall be added, namely:-
=====================================================================
17. Any reporting Such reporting financial 107,
financial institution or institution or reporting 108
reporting entity who entity shall pay a penalty and
fails to furnish of two thousand rupees 165B
information or for each day of default
country-by-country subject to a minimum
report to the Board penalty of twenty five
as required under thousand rupees.
section 107, 108 or
165B within the due
date.
18. Any person who fails 1% of the value of 108.
to keep and maintain transactions, the record
document and of which is required to
information required be maintained under
under section 108 or section 108 and Income
Income Tax Rules, Tax Rules, 2002
2002
=====================================================================
(39) in section 191, in sub-section (1),-
(a) in clause (a), after the expression "(3)", the expression "and subsection (4)" shall be inserted; and
(b) in clause (c), after the word "Chapter", the expression "or Chapter XII" shall be inserted;
(40) in section 205, in sub-section (1B), for the full stop at the end, a colon shall be substituted and thereafter the following proviso shall be added, namely:-
"Provided that in the case of person having a special tax year, the default surcharge shall be calculated on and from the first day of the fourth quarter of the special tax year till the date on which assessment is made or the last day of special tax year, whichever is earlier.";
(41) in section 206A, in sub-section (3), for the colon at the end, a full stop shall be substituted and the proviso thereafter shall be omitted;
(42) in section 207,-
(a) in sub-section (1), after clause (i), the following new clauses shall be inserted, namely:-
"(ia) District Taxation Officer;
(ib) Assistant Director Audit;";
(b) in sub-section (3A), for the word "Officer" the word "Officers" shall be substituted and thereafter the expression ", District Taxation Officer, Assistant Director Audit" shall be inserted;
(c) in sub-sections (4) and (4A), after the word "Officers", occurring for the second time, the expression ", District Taxation Officer, Assistant Director Audit" shall be inserted;
(43) in section 208, in sub-section (1), after the word "Officers", occurring for the second time, the expression ", District Taxation Officer, Assistant Director Audit" shall be inserted;
(44) in section 216:-
(a) in sub-section (3), after clause (k), the following new clause shall be inserted, namely:-
"(ka) Employees Old Age Benefit Institution in respect of information regarding salaries in statements furnished under section 165;"; and
(b) in sub-section (5), after the word "of", the words "Minister Incharge of" shall be inserted;
(45) in section 227A, in sub-section (1),
(a) after the word "cases", occurring for first time, the figure "(i)" shall be inserted; and
(b) after the word "cases", occurring for the second time, the expression "and (ii) for other meritorious services" shall be inserted;
(46) in section 227B, in sub-section (3), after clause (a), the following new clause shall be inserted, namely:-
"(aa) the information is not supported by any evidence;";
(47) after section 230C, the following new sections shall be inserted, namely:-
"230D. Directorate-General of Broadening of Tax Base.-
(1) The Directorate-General of Broadening of Tax Base shall consist of a Director-General and as many Directors, Additional
Directors, Deputy Directors, Assistant Directors and such other officers as the Board may, by notification in the official Gazette, appoint.
(2) The Board may, by notification in the official Gazette, specify the functions, jurisdiction and powers of the Directorate- General of Broadening of Tax Base.
230E. Directorate-General of Transfer Pricing.- (1) The
Directorate-General of Transfer Pricing shall consist of a Director- General and as many Directors, Additional Directors, Deputy Directors, Assistant Directors and such other officers as the Board may, by notification in the official Gazette, appoint.
(2) The function of the Directorate General of Transfer Pricing shall be to conduct transfer pricing audit:
Explanation: For the removal of doubt , it is clarified that transfer pricing audit refers to the audit for determination of transfer price at arm's length in transactions between associates and is independent of audit under section 177, 214C or 214D which is audit of the income tax affairs of the taxpayer.
(3) The Board may, by notification in the official Gazette, specify the criteria for selection of the taxpayer for transfer pricing audit and may further specify functions, jurisdiction and powers of the Directorate-General of Transfer Pricing.";
(48) in section 231B, for sub-section (1A), the following shall be substituted, namely:-
"(1A) Every leasing company or a scheduled bank or a nonbanking financial institution or an investment bank or a modaraba or a development finance institution, whether shariah compliant or under conventional mode, at the time of leasing of a motor vehicle to a non-filer, either through ijara or otherwise, shall collect advance tax at the rate of three per cent of the value of the motor vehicle.";
(49) in section 233A, for sub section (2), the following shall be substituted, namely:-
"(2) The tax collected under sub-section (1) shall be final
