Amendments of the Sales Tax Act 1990
Finance Act 2023 to give effect to the financial proposals of the Federal Government for the year beginning on the first day of July, 2023, 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, 2023, and to amend certain laws for the purposes hereinafter appearing. Certain laws were amended through this Finance Act, 2023.
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,-
(a) in clause (12), after the word “include”, the expression “production, transmission and distribution of electricity,” shall be omitted;
(b) in clause (33), the sub-clause (e) shall be omitted;
(c) in clause (43A), sub-clauses (e) and (ga) shall be omitted;
(2) in section 3, in sub-section (1A), for the word “three”, the word “four” shall be substituted;
(3) for section 30CA, the following shall be substituted, namely:-
30CA. Directorate General of Digital Initiatives.– The Directorate General of Digital Initiatives shall consist of a Director General and as many Directors, Additional Directors, Deputy Directors and Assistant Directors and such other officers as the Board may, by notification in the official Gazette, appoint.”;
(4) in section 33, in clause (23), in column (1), for the words “cigarette packs”, the expression “goods or class of goods as specified by the Board under sub-section (1) of section 40C” shall be substituted;
(5) for section 47A, the following shall be substituted, namely:-
“47A. Alternative Dispute Resolution.– (1) Notwithstanding any other provision of this Act, or the rules made thereunder, an aggrieved person in connection with any dispute pertaining to—
(a) the liability of tax of one hundred million rupees or above against the aggrieved person or admissibility of refund, as the case may be;
(b) the extent of waiver of default surcharge and penalty; or
(c) any other specific relief required to resolve the dispute, may apply to the Board for the appointment of a committee for the resolution of any hardship or dispute mentioned in detail in the application, which is under litigation in any court of law or an appellate authority, except where criminal proceedings have been initiated.
(2) The application for dispute resolution shall be accompanied by an initial proposition for resolution of the dispute, including an offer of tax payment.
(3) The Board may, after examination of the application of an aggrieved person, appoint a committee, within fifteen days of receipt of such application in the Board, comprising,—
(i) a retired judge not below the rank of a judge of a High Court, who shall also be the Chairperson of the Committee, to be nominated by the Board from a panel notified by the Law and Justice Division for such purpose;
(ii) Chief Commissioner Inland Revenue having jurisdiction over the case; and
(iii) person to be nominated by the registered person from a panel notified by the Board comprising –
(a) chartered accountants, cost and management accountants and advocates having a minimum of ten years’ experience in the field of taxation;
(b) officers of the Inland Revenue Service who stood retired in BPS 21 or above; or
(c) reputable businessmen as nominated by Chambers of Commerce and Industry:
Provided that the registered person shall not nominate a chartered accountant or an advocate if the said chartered accountant or the advocate is or has been an auditor.
(4) The Board shall communicate the order of appointment of committee to the aggrieved person, court of law or the appellate authority where the dispute is pending and the concerned Commissioner.
(5) The committee appointed under sub-section (3) shall examine the issue and may, if it deems necessary, conduct inquiry, seek expert opinion, direct
any officer of the Inland Revenue or any other person to conduct an audit and shall decide the dispute by majority, within forty-five days of its appointment extendable by another fifteen days for the reasons to be recorded in writing.
(6) The decision by the committee under sub-section (5) shall not be cited or taken as a precedent in any other case or in the same case for a different tax year.
(7) The recovery of tax payable by a registered person in connection with any dispute for which a committee has been appointed under sub-section (3) shall be deemed to have been stayed on the constitution of committee till the final decision or dissolution of the committee, whichever is earlier.
(8) The decision of the committee under sub-section (5) shall be binding on the Commissioner when the aggrieved person, being satisfied with the decision, has withdrawn the appeal pending before the court of law or any appellate authority in respect of dispute as mentioned in sub-section (1) and has communicated the order of withdrawal to the Commissioner:
Provided that if the order of withdrawal is not communicated to the Commissioner within sixty days of the service of decision of the committee upon the
aggrieved person, the decision of the committee shall not be binding on the Commissioner.
(9) Subject to sub-section (10), the Commissioner shall also withdraw the appeal, if any, pending before any court of law or an appellate authority in
respect of dispute as mentioned in sub-section (1) within thirty days of the communication of the order of withdrawal by the aggrieved person to the
Commissioner.
(10) The aggrieved person shall make the payment of sales tax and other duty or taxes and within such time as decided by the committee under sub section
(5) and all decisions and orders made or passed shall stand modified to that extent.
(11) If the committee fails to decide within the period of sixty days under sub-section (5), the Board shall dissolve the committee by an order in writing and the matter shall be decided by the court of law or the appellate authority where the dispute is pending under litigation.
(12) The Board shall communicate the order of dissolution of the committee to the aggrieved person, court of law or the appellate authority and the
Commissioner.
(13) On receipt of the order of dissolution of the committee, the court of law or the appellate authority shall decide the appeal within six months of the communication of said order.
(14) The Board may prescribe the amount to be paid as remuneration for the services of the members of the committee, other than the member appointed under clause (ii) of sub-section (3).
(15) The Board may, by notification in the official Gazette, make rules for carrying out the purposes of this section;
(6) in the Fifth Schedule, in column (1),-
(a) after serial number 8, the following new serial number and entries thereto in column (2) shall be inserted, namely:-
“8A. Imports or supplies made by, for or to a qualified investment as specified at Serial No.1 of the First Schedule to the Foreign Investment (Promotion and Protection) Act, 2022 for the period as specified in the Second Schedule to the said Act.”.
(b) against serial number 12, in column (2),-
(i) in clause (xvii), for the word “five”, the word “six” shall be substituted;
(ii) for clause (xxv), the following shall be substituted, namely:-
“(xxv) other drawing, marking out or mathematical calculating instruments (geometry box) (PCT heading 9017.2000).”; and
(c) against serial number 21, after the words “supplies of”, the expression “commodities,” shall be inserted;
(7) in the Sixth Schedule, –
(I) in Table-1, in column (1),-
(a) against serial numbers 16, in column (2), for the words “in retail packing bearing”, the word “under” shall be substituted;
(b) against serial numbers 17, in column (2), for the words “in retail packing bearing”, the word “under” shall be substituted;
(c) against serial numbers 18, in column (2), for the words “in retail packing bearing”, the word “under” shall be substituted;
(d) in serial number 121, in column (2), the following Explanation shall be added, namely:-
“Explanation.- For removal of doubt, it is clarified that the blood transfusion sets not packed in aluminum foil imported with blood bags CPDA-1, in corresponding quantity in same consignment are also exempt;”
(e) against serial number 151, in column (2), in clause (b), for the expression “30th June, 2023” the expression “30th June, 2024” shall be substituted;
(f) against serial number 152, in column (2), for the expression “30th June, 2023” the expression “30th June, 2024” shall be substituted;
(g) serial numbers 159 and 160 and entries relating thereto in columns
(2) and (3) shall be omitted;
(h) against serial number 168, in column (2), after the word “Fertilizers”, the words “excluding DAP” shall be added; and
(II) in Table-2, in column (1),-
(a) against serial number 27, in column (2), after the words “Wheat Bran”, the expression “*This exemption shall apply from the 1st day of July, 2018+” shall be added;
(b) against serial number 32, in column (2), after the word “sold”, the words “in retail packing” shall be omitted;
(c) against serial number 34, in column (2), after the word “sold”, the words “in retail packing” shall be omitted;
(d) against serial number 35, in column (2), after the word “sold”, the words “in retail packing” shall be omitted;
(e) against serial number 36, in column (2), after the word “sold”, the words “in retail packing” shall be omitted;
(f) against serial number 37, in column (2), after the word “sold”, the words “in retail packing” shall be omitted;
(g) against serial number 39, in column (2), after the word “sold”, the words “in retail packing” shall be omitted;
(h) against serial number 41, in column (2), after the word “sold”, the words “in retail packing” shall be omitted; and
(i) against serial number 42, in column (2), after the word “sold”, the words “in retail packing” shall be omitted;
(8) in the Eighth Schedule, in column (1),-
(a) against serial number 66, in column (4), for the expression “12%”, the expression “15%” shall be substituted; and
(b) serial numbers 81 and 82 and entries relating thereto in columns (2), (3), (4) and (5) shall be substituted, namely:-
| “81. | Substances registered as drugs under the Drugs Act, 1976 (XXXI of 1976) and medicaments as are classifiable under chapter 30 of the First Schedule to the Customs Act, 1969 (IV of 1969) except the following, even if medicated or medicinal in nature, namely:-
(a) filled infusion solution bags imported with or without infusion given sets; (b) scrubs, detergents and washing preparations; (c) soft soap or no soap; (d) adhesive plaster; (e) surgical tapes; (f) liquid paraffin; (g) disinfectants, and (h) cosmetics and toilet preparations. This substitution shall be deemed to have been made from the 1st day of July, 2022. |
Respective
Headings |
1% | Subject to the conditions that:
(i) Tax charged and deposited by the manufacturer or importer, as the case may be, shall be final discharge of tax in the supply chain (ii) No input tax shall be adjusted in the supply chain. |
| 82 | Raw materials for the basic manufacture of pharmaceutical active ingredients and for manufacture of pharmaceutical products, provided that in case of import, only such raw materials shall be entitled to reduced rate as specified in column (4) which are liable to customs duty not exceeding eleven per cent ad valorem, either under the First Schedule | Respective
headings |
1% | Subject to the
conditions that: (i) DRAP shall certify item-wise requirement of manufacturers of drugs and APIs and in case of import shall furnish all relevant information to Pakistan Customs Computerized System; and (ii) No input tax shall be |
| or Fifth Schedule to the
Customs Act, 1969 (IV of 1969) or under a notification issued under section 19 thereof. |
adjusted in the
supply chain”. |
(c) after serial number 82, the following new serial number and entries relating thereto in columns (2), (3), (4) and (5) shall be added, namely:-
| “83. | DAP | Respective
headings |
5% | Subject to the condition that
no refund of excessive input tax, if any, shall be admissible.”. |
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