ISLAMABAD: Federal Board of Revenue (FBR) has constituted a committee of senior officers at Customs House, Karachi to formulate rules to implement section 156(1) of the Customs Act, 1969 as modified by the Federal Government vide Finance Act, 2021. The said provision of law prescribes certain penalties for not placing invoice, packing list inside the container or failure to attach or upload mandatory documents with the goods declaration (GD).
The committee will formulate rules to develop parameters to specify the person and circumstances in which the penalty prescribed for non-placement of invoice and packing list shall be imposed. The committee will also identity different types of GDs and prescribe documents that are considered mandatory for submission along with those GDs.
FBR has explained that the rules will be notified in due course of time and till framing of rules, no action shall be taken in this matter. FBR has assured the trade bodies that the subject provisions will be applicable only after notification of rules by FBR. Meanwhile the earlier practice will be continued by the Customs field formations. Moreover, after submission of draft rules by the committee, FBR will publish these draft rules on the FBR website for seeking input from all stakeholders before implementing the same.
TLTP adds: The Federal Board of Revenue (FBR) has slashed regulatory duty up to half on export of certain goods.
The FBR issued SRO 843(I)/2021, dated June 30, 2021, to amend the SRO 645(I)/2018, dated May 24, 2018, which is related to regulatory duty on export of goods.
According to the latest SRO, the regulatory duty on export of hides and skins has been reduced to 10 percent from 20 percent. Similarly, the regulatory duty on export of molasses has been reduced to 10 percent from 15 percent.
Meanwhile, the FBR has slapped additional customs duty up to 7 percent on imports falling under the tariff slab of 30 percent with effect from July 01, 2021. The FBR issued SRO 845(I)/2021 to levy additional customs duty on import of goods specified in the first schedule of the Customs Act, 1969.
The additional customs duty at 2 percent has been imposed on goods falling under tariff slabs of zero percent, 3 percent and 11 percent. The additional customs duty at 4 percent has been imposed on goods falling under tariff slabs of 16 percent except goods falling under PCT code 5516.9300 and 5516.9400, which shall be charged at the rate of two per cent on import. The additional customs duty at six percent has been imposed on goods falling under the tariff slab of 20 per cent.
Similarly, the additional customs duty at seven per cent has been imposed on goods falling under tariff slab of 30 percent and higher slabs as well as slabs of specific rates, except goods falling under PCT codes 1507.1000, 1507.9000, 1511.1000, 1511.9010. 1511.9020, 1511.9030, 1512.1100, 1512.1900, 1512.2100, 1512.2900, 1514.1100, 1514.1900, 1514.9100 and 1514.9900, which shall be charged at the rate of two per cent on import.
The FBR said that the value of goods for the purpose of this levy shall be determined under Section 25A of the Act, as the case may be. The FBR issued a detailed list of items on which the additional customs duty would not be applied.
Meanwhile, the government is struggling to regulate millions of dollars of informal gold business in the country by bringing the jewellers into the tax net to fulfil one of the conditions of the Financial Action Task Force (FATF), officials said on Wednesday.
“It [gold] is one of the most unregulated sectors that need to be regulated. A directorate-general has been constituted for this purpose,” Syed Nadeem Hussain Rizvi, Member Facilitation and Taxpayer Education (FATE) Wing of Federal Board of Revenue (FBR) member said on Wednesday.
He said the directorate-general is working on a regulation mechanism to make the gold business part of the country’s formal economy. “The FATF is concerned about regulation of such businesses,” he added.
Jewellers and gold businessmen have been resisting the FBR’s decision to document the sector, saying it would lead to their harassment and curtailment of the business unless the government made a more holistic effort to digitise the overall economy.
President of All Sindh Sarrafa Jewelers Association Haroon Rasheed Chand said he has called a meeting of goldsmiths and jewellers on Friday to discuss the issue. “We have been regularly paying all income and sales taxes, but even then we are harassed in the name of informal business,” he said.
He maintained different government agencies are forcing the jewellers to reveal their gold and jewel transactions worth Rs2 million or more, “creating panic in the market.”
“We are ready to cooperate with the government in its efforts to remove its name from the FATF grey list, but the authorities should not force small gold shops to register for sales tax because this will adversely impact their business,” he added.
The global financial watchdog placed the country on its grey list in June 2018 for deficiencies in its system to counter practices like terror financing and money laundering. Since then, Pakistan has largely addressed 26 out of 27 items on the action plan it first committed to after being placed on the list.
The FATF has been pressing Pakistan to regulate all its businesses and economy to minimise chances of money laundering and terror financing through informal sectors like gold business and prize bonds.
The country has already restricted the buying and selling of the bonds in unconventional ways and now turned its eye toward the gold business.
Economists and experts believe that black money worth millions of rupees can be easily converted into gold and prize bonds and kept anywhere without legal ownership. They said the government agencies could not determine the ownership of gold and jewelry due to loopholes in the current legal system and mechanisms.
They said that the documentation of the gold sector is not just important to fulfil the FATF condition but also to increase the country’s tax base. – TLTP