Finance Bill 2014 Presented in Budget of Islamic Republic of Pakistan for Year 2014-15

June 4, 2014 8:19 amComments Off on Finance Bill 2014 Presented in Budget of Islamic Republic of Pakistan for Year 2014-15Views: 778

BUDGET

 

A

BILL

to give effect to the financial proposals of the Federal Government for the year beginning on the first day of July, 2014, and to amend and enact 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, 2014, 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, 2014.

(2)It extends to the whole of Pakistan.

(3)It shall, unless otherwise provided, come into force on the first day of July, 2014.

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

(1)in section 2,-

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

“(k) “customs-station” means any customs-station, customs- airport, an inland river port, land customs-station or any place declared as such under section 9;”; and

(b)clause (m) shall be omitted;

(2)in section 7, for the word “Central”, the word “Federal” shall be substituted;

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(3)in section 18, after sub-section (1), the following new sub-section shall be inserted, namely:-

“(1A) Notwithstanding anything contained in sub-section (1), customs duties shall be levied at such rates on import of goods or class of goods as are prescribed in the Fifth Schedule, subject to such conditions, limitations and restrictions as prescribed therein.”;

(4)in section 18A, for the words, figures and brackets “Central Excises and Salt Act, 1944 (I of 1944)”, the words and figures “the Federal Excise

Act, 2005” shall be substituted;

(5)in section 25,-

(a)in sub-section (5), clause (d) shall be omitted; and

(b)in sub-section (6),-

(i)for the comma, occurring for eighth time, the word “and” shall be substituted; and

(ii)the word, letter and brackets “and (d)” shall be omitted;

(6)in section 32, in sub-sections (2), (3) and (3A), after the word “duty”, the comma and word “, taxes” shall be inserted;

(7)in section 80, in sub-section (3), after the word “duty”, the comma and the words “, taxes and other charges levied thereon” shall be added;

(8)in section 81, in sub-section (1),-

(a)in the first proviso, after the word “duty”, the comma and words “, taxes and other charges” shall be inserted; and

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(b)in the second proviso, for the word “tax”, the words “taxes and other charges” shall be substituted;

(9)in section 185B, for clause (a), the following shall be substituted, namely:-

“(a) no court other than the Special Judge having jurisdiction shall try an offence punishable under this Act, except the offences relating to narcotics and narcotic substances which shall be tried by the Special Courts established under the Control of Narcotics Substances Act,

1997 (XXV of 1997);”;

(10)in section 194, in sub-section (3),-

(a)for the words “Customs and Excise Group”, the words “Pakistan Customs Service” shall be substituted; and

(b)for the word “five”, the word “three” shall be substituted;

(11)the amendments set out in the First Schedule to this Act shall be made in the First Schedule to the Customs Act, 1969 (IV of 1969); and

(12)the provisions in the Second Schedule to this Act shall be added as the Fifth Schedule to the Customs Act, 1969 (IV of 1969).

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, in clause (27), for the semicolon at the end a colon shall be substituted, and thereafter the following proviso shall be added, namely:-

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“Provided that the Board may through a general order specify zones or areas for the purpose of determination of highest retail price for any brand or variety of goods;”;

(2)in section 3,–

(i)in sub-section (2),–

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

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

“(aa) goods specified in the Eighth Schedule shall be charged to tax at such rates and subject to such conditions and limitations as specified therein; and”;

(ii)after sub-section (3A), the following new sub-section shall be inserted, namely:─

“(3B) Notwithstanding anything contained in sub- sections (1) and (3), sales tax on the import and supply of the goods specified in the Ninth Schedule to this Act shall be charged, collected and paid at the rates, in the manner, at the time, and subject to the procedure and conditions as specified therein or as may be prescribed, and the liability to charge, collect and pay the tax shall be on the persons specified therein.”;

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(iii)for sub-section (8), the following shall be substituted, namely:-

“(8) Notwithstanding anything contained in any law or notification made thereunder, in case of supply of natural gas to CNG stations, the Gas Transmission and Distribution Company shall charge sales tax from the CNG stations at the rate of seventeen per cent of the value of supply to the CNG consumers, as notified by the Board from time to time, but excluding the amount of tax, as provided in clause (46) of section

2.”;

(iv)after sub-section (8), substituted as aforesaid, the following newsub-section shall be added, namely:-

“(9) Notwithstanding anything contained in sub-section (1), tax shall be charged from retailers through their monthly electricity bills, at the rate of five per cent where the monthly bill amount does not exceed rupees twenty thousand and at the rate of seven and half per cent where the monthly bill amount exceeds the aforesaid amount, subject to the exclusions, procedure, restrictions and limitations as prescribed in Chapter II of the Sales Tax Special Procedure Rules, 2007:

Provided that the tax under this sub-section shall be in addition to the tax payable on supply of electricity under sub- sections (1), (1A) and (5).”;

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(3)in section 3B, for sub-section (2), the following shall be substituted and shall be deemed to have been always so substituted, namely:-

“(2) Notwithstanding anything contained in any law or judgment of a court, including the Supreme Court and a High Court, any amount payable to the Federal Government under sub-section (1) shall be deemed to be an arrear of tax or charge payable under this Act and shall be recoverable accordingly and any claim for refund in respect of such amount shall neither be admissible to the registered person nor payable to any court of law or to any person under direction of the court.”;

(4)in section 4, in clause (d), for the words “zero-rated goods”, the words “goods supplied at reduced rate of sales tax” shall be substituted;

(5)in section 7,–

(i)in sub-section (1),–

(a)for the word “section”, occurring for the first time, the words and figure “sections 8 and” shall be substituted;

(b)after the words “output tax”, occurring for the first time, the commas, words, brackets and figures “, excluding the amount of further tax under sub-section (1A) of section 3,”

shall be inserted;

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

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“(iiia) the goods and services against which input tax is claimed

are,–

(a)imported or purchased for the purpose of sale orre-sale by the registered person on payment of tax;

(b)used directly as raw material, ingredient, part, component or packing material by the registered person in the manufacture or production of taxable goods;

(c)electricity, natural gas and other fuel consumed directly by the registered person in his declared business premises for the manufacture, production or supply of taxable goods; or

(d)plant, machinery and equipment used by the registered person in his declared business premises for the manufacture, production or supply of taxable goods.”;

(6)in section 8, in sub-section (1),–

(i)in clause (d), the word “and”, at the end, shall be omitted;

(ii)after clause (e), for full stop at the end a semicolon shall be substituted and thereafter the following new clauses shall be added, namely:-

“(f) goods and services not related to the taxable supplies made by the registered person;

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(g)goods and services acquired for personal or non-businessconsumption;

(h)goods used in, or permanently attached to, immoveable property, such as building and construction materials, paints, electrical and sanitary fittings, pipes, wires and cables, but excluding such goods acquired for sale or re- sale or for direct use in the production or manufacture of taxable goods; and

(i)vehicles falling in Chapter 87 of the First Schedule to the Customs Act, 1969 (IV of 1969), parts of such vehicles, electrical and gas appliances, furniture, furnishings, office equipment (excluding electronic cash registers), but excluding such goods acquired for sale or re-sale.”;

(7)in section 40B, after the proviso, the following explanation shall be added, namely:–

Explanation.– For the removal of doubt, it is declared that the powers of the Board, Chief Commissioner and Commissioner under this section are independent of the provisions of section 40.”;

(8)after section 50A, the following new section shall be inserted, namely:–

50B. Electronic scrutiny and intimation.– (1) The Board may implement a computerized system for the purpose of automated scrutiny, analysis and cross-matching of returns and other available

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data relating to registered persons and to electronically send intimations

to such registered persons about any issue detected by the system.

(2)The intimation sent by the computerized system undersub-section (1) shall be in the nature of an advice or advance notice, aimed at allowing the registered person to clarify the issue, rectify any mistake or take other corrective action before any legal or penal action is initiated.

(3)The computerized system shall keep record of the issues detected, intimations sent, responses received and actions taken, and shall present such information to the officer of Inland Revenue and to the Board in the prescribed manner.

(4)The Board may prescribe procedures and specifications

for the smooth and efficient operation of the computerized system.”;

(9)in the Fifth Schedule, in column (1), after Serial No. 8 and entries relating thereto in column (2), the following new serial numbers and entries relating thereto shall be added, namely:-

“9. Goods exempted under section 13, if exported by a manufacturer who makes local supplies of both taxable and exempt goods.

10.Petroleum Crude Oil (PCT heading 2709.0000).

11.Raw materials, components, sub-components and parts, if imported or purchased locally for use in the manufacturing of

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such plant and machinery as is chargeable to sales tax at the rate of zero percent, subject to the condition that the importer or purchaser of such goods holds a valid sales tax registration showing his registration category as “manufacturer”; and in case of import, all the conditions, restrictions, limitations and procedures as are imposed by Notification under section 19 of the Customs Act, 1969 (IV of 1969), shall apply.

12.The following goods and the raw materials, packing materials,sub-components, components, sub-assemblies and assemblies imported or purchased locally for the manufacture of the said goods, subject to the conditions, limitations and restrictions as specified in Chapter XIV of the Sales Tax Special Procedure Rules, 2007:–

(i)Colors in sets (PCT heading 3213.1000)

(ii)Writing, drawing and marking inks (PCT heading3215.9010 and 3215.9090)

(iii)Erasers (PCT heading 4016.9210 and 4016.9290)

(iv)Exercise books (PCT heading 4820.2000)

(v)Pencil sharpeners (PCT heading 8214.1000)

(vi)Geometry boxes (PCT heading 9017.2000)

(vii)Pens, ball pens, markers and porous tipped pens(PCT

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heading 96.08)

(viii)Pencils including color pencils (PCT heading 96.09)

(ix)Milk including flavored milk (PCT heading 04.01 and 0402.9900)

(x)

Yogurt

(PCT heading 0403.1000)

(xi)Cheese (PCT heading 0406.1010)

(xii)Butter (PCT heading 0405.1000)

(xiii)Cream (PCT heading 04.01 and 04.02)

(xiv)Desi ghee (PCT heading 0405.9000)

(xv)Whey (PCT heading 04.04)

(xvi)Milk and cream, concentrated and added sugar or other sweetening matter (PCT heading 0402.1000)

(xvii)Preparations for infant use put up for retail sale (PCT heading 1901.1000)

(xviii)Fat filled milk (PCT heading 1901.9090)

(xix)Bicycles (PCT heading 87.12).”;

(10)in the Sixth Schedule,–

(i)in Table-1, in column (1),–

(a)against serial number 24, in column (3), after the figure and comma, “1510.0000,” the figure and comma “1511.1000,” shall be inserted; and

Check The Full Finance Bill below.

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