The Sales Tax Act, 1990

The

An Act to consolidate and amend the law relating to the levy of a tax on the sale ²[, importation, exportation, production, manufacture or consumption]² of goods

WHEREAS it is expedient to consolidate and amend the law relating to the levy of a tax on the sale ³[, importation, exportation, Production, manufacture or consumption]³ of goods;

It is hereby enacted as follows:-

⁴[CHAPTER I
PRELIMINARY

1. Short title, extent and commencement.
(1) This Act may be called the Sales Tax ⁵[...]⁵ Act, 1990.

(2) It extends to the whole of Pakistan.

⁶[(3) It shall come into force on such date as the Federal Government may, by notification in the official Gazette, appoint.]⁶

⁷[2. Definitions……………………………………………………..7-28.
In this Act, unless there is anything repugnant in the subject or context,--

⁸[“(1) “abettor” means a person who intentionally abets or connives in tax fraud as defined in clause (37) of section 2 or in the commission of any offence warranting prosecution under this Act, and includes a person who,–

(a) prepares, or causes to be prepared with authorization of the registered person, invoices for false claim of input tax adjustment; or

(b) allows use of bank account held or operated by him for abetting tax fraud or other offence warranting prosecution under this Act or unauthorizedly or illegally maintains or operates business bank account in other registered person’s name.”;

⁹(1A) “active taxpayer” means a registered person who does not fall in any of the following categories, namely:-

(a) who is blacklisted or whose registration is suspended ¹⁰[***]¹⁰ in terms of section 21;

(b) fails to file the return under section 26 by the due date for two consecutive tax periods;

(c) who fails to file an Income Tax return under section 114 or statement under section 115, of the Income Tax Ordinance, 2001(XLIX of 2001), by the due date; and-

(d) who fails to file ¹¹[quarterly]¹¹ or an annual withholding tax statement under section 165 of the Income Tax Ordinance, 2001;

¹²[(1AA) “advance receipt invoice” means an invoice in the format as may be notified by the Board from time to time;]¹²

¹³[(1AAA) “algorithmic settlement mechanism” means algorithmic settlement mechanism provided under section 47AA of this Act;]¹³

(1B) “Appellate Tribunal” means the Appellate Tribunal Inland Revenue established under section 130 of the Income Tax Ordinance, 2001 (XLIX of 2001);]⁸

(2) “appropriate officer” means an ¹⁴[officer of Inland Revenue]¹⁴ authorised by the Board by notification in the official Gazette to perform certain functions under this Act;

¹⁵[(2A) “arrears”, in relation to a person, means, on any day, the sales tax due and payable by the person under this Act before that day but which has not yet been paid; ]¹⁵

¹⁶[(3) “associates or associated persons” shall have the same meaning as defined in section 85 of the Income Tax Ordinance, 2001(XLIX of 2001);]¹⁶

¹⁷[(3A) “association of persons” includes a firm, a Hindu undivided family, any artificial juridical person and anybody of persons formed under a foreign law, but does not include a company;]^{17 18}[(3AA) “banking company” means a banking company as defined in the Banking Companies Ordinance, 1962 (LVII of 1962) and includes anybody corporate which transacts the business of banking in Pakistan;]¹⁸

¹⁹[(4) “Board” shall have the same meaning as defined under clause (8) of section 2 of the Income Tax Ordinance, 2001 (XLIX of 2001);]¹⁹

²⁰[“(4A) “Cargo Tracking System” means a digital system notified by the Board for electronic monitoring and tracking of goods transported within or across the territory of Pakistan, for the purpose of tax enforcement, compliance and prevention of tax evasion;”;]²⁰

²¹[(4AA)]²¹ “Chief Commissioner” means a person appointed as the chief Commissioner Inland Revenue under section 30;]⁷

[(4AAA)] “Commissioner (Appeals)” means Commissioner of Inland Revenue (Appeals) appointed under section 30;]

²²[(5) “Commissioner” means the Commissioner of Inland Revenue appointed under section 30;]²²

²³[(5A) “common taxpayer identification number” means the registration number or any other number allocated to a registered person;]²³

²⁴[(5AA) “company” means –

(a) a company as defined in the Companies Ordinance, 1984 (XL VII of 1984);

(b) a body corporate formed by or under any law in force in Pakistan;

(c) a modaraba;

(d) a body incorporated by or under the law of a country outside Pakistan relating to incorporation of companies;

(e) a trust, a co-operative society or a finance society or any other society established or constituted by or under any law for the time being in force; or

(f) a foreign association, whether incorporated or not, which the Board has, by general or special order, declared to be a company for the purposes of the Income Tax Ordinance 2001 (XLIX of 2001);

²⁵[(5AAA)]²⁵ “computerized system” means any comprehensive information technology system to be used by the Board or any other office as may be notified by the Board, for carrying out the purposes of this Act;]²⁴

²⁶[(5AB) “cottage industry” means a manufacturing concern, which fulfils each of following conditions, namely:−

(a) does not have an industrial gas or electricity connection;

(b) is located in a residential area;

(c) does not have a total labour force of more than ten workers; and

(d) annual turnover from all supplies does not exceed ²⁷[eight]²⁷ million rupees;]²⁶

²⁹[(5ABA) “courier” means any entity engaged in the delivery of goods and collection of cash on behalf of a seller including logistic and ride-hailing services;”;]²⁹

²⁹[(5AC)“CREST” means the computerized program for analyzing and cross matching of sales tax returns, also referred to as COMPUTERISED RISK-BASED EVALUATION of SALES TAX;]²⁹

(6) “Customs Act” means the Customs Act, 1969 (IV of 1969), and where appropriate all rules and notifications made under that Act;

³⁰[(6A) “defaulter” means a person and, in the case of company or firm, every director, or partner of the company, or as the case may be, of the firm, of which he is a director or partner or a proprietor and includes guarantors or successors, who fail to pay the arrears;]³⁰

³¹[(6B) “default surcharge” means the default surcharge levied under section 34;]³¹

(7) “distributor” means a person appointed by a manufacturer, importer or any other person for a specified area to purchase goods from him for further supply and includes a person who in addition to being a distributor is also engaged in supply of goods as a wholesaler or a retailer;

(8) “document” includes any electronic data, computer programmes, computer tapes, computer disks, micro-films or any other medium for the storage of such data;

(9) “due date” in relation to the furnishing of a return ³²[under section 26]³², ³³[ ³⁴[...]^{34 35}[....]³⁵ means the ³⁶[15th]³⁶ day of the month following the end of the tax period, or such other date as the ³⁷[Board]³⁷ may, by notification in the official Gazette, specify ³⁸[and different dates may be specified for furnishing of different parts or annexures of the return]³⁸;

³⁹[(9A)]³⁹ “e-intermediary” means a person appointed as e-intermediary under section 52A for filing of electronic returns and such other documents as may be prescribed by the Board from time to time, on behalf of a person registered under section 14;]³³

(9AA) ***]

⁴¹[(9AB) “electronic invoicing system” means such electronic system or mechanism as may be prescribed or approved by the Board for issuance and recording of sales tax invoices in electronic form;]⁴¹

⁴²(9B) “e-bilty” means a digital transport document generated through the Cargo Tracking System as prescribed by the Board, to accompany goods during their movement.”;

⁴³(9C) “e-commerce” means sale or purchase of goods conducted over computer networks by methods specifically designed for the purpose of receiving or placing of orders either through websites, mobile applications or online marketplace having digital ordering features by using mobile phones, automated computer-to-computer ordering system or any similar device;”;

(10) “establishment” means an undertaking, firm or company, whether incorporated or not, an association of persons or an individual;

(11) “exempt supply” means a supply which is exempt from tax under section 13;

⁴⁴[(11A) “FBR Refund Settlement Company ⁴⁵[10a]⁴⁵ Limited” means the company with this name as incorporated under the ⁴⁶[Companies Act, 2017 (XIX of 2017)]⁴⁶, for the purpose of settlement of sales tax and income tax refund claims including payment by way of issuing refund bonds under section 67A’;]⁴⁴

⁴⁷[(11B) “firm” means the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all;]⁴⁷

(12) “goods” include ⁴⁸[***]⁴⁸ every kind of movable property other than actionable claims, money, stocks, shares and securities; ⁴⁹[“(12A) “green industry” in relation to the entry at serial number 150 of the Table-1 of the Sixth Schedule, means-

(a) a new industrial undertaking which is-

(i) setup on land which not previously been utilised for any commercial, industrial or manufacturing activity and is free from constraints imposed by any prior work;

(ii) built without demolishing revamping, renovating, upgrading, remodeling or modifying any existing structure, facility or plant;

(iii) not formed by the splitting up or reconstitution of an undertaking already in existence or by transfer of machinery, plant or building from an undertaking established in Pakistan prior to commencement of the new business and is not part of an expansion project;

(iv) using any process or technology that has not earlier been used in Pakistan and is so approved by the Engineering Development Board; and

(b) is approved by the Commissioner on an application made in the prescribed form and manner, accompanied by the prescribed documents and, such other documents as may be required by the Commissioner:

Provided that this definition shall be applicable from the 1st July, 2019 and onwards.”.]⁴⁹

(13) “importer” means any person who ⁵⁰[... ]⁵⁰ imports any goods into Pakistan;

⁵¹[(14) “input tax”, in relation to a registered person, means –

(a) tax levied under this Act on supply of goods to the person;

(b) tax levied under this Act on the import of goods by the person;

(c) in relation to goods or services acquired by the person, tax levied under the Federal Excise Act, 2005 in sales tax mode as a duty of excise on the manufacture or production of the goods, or the rendering or providing of the services; ⁵²[37 ]⁵²

(d) ⁵⁴[…….]^{54 55}[Provincial Sales Tax levied on services rendered or provided to the person ⁵⁶[excluding those services as specified by the Board through notification in the official Gazette subject to such conditions, restrictions and limitations as mentioned therein]⁵⁶; and]⁵⁵

(e) levied under the Sales Tax Act, 1990 as adapted in the State of Azad Jammu and Kashmir, on the supply of goods received by the person;]⁵¹

⁵⁷[(14A) the expression “KIBOR” means Karachi Inter-Bank Offered Rate prevalent on the first day of each quarter of the financial year;]⁵⁷

⁵⁸[(15) “Local Inland Revenue Office” means the office of Superintendent of Inland Revenue or such other office as the Board may, by notification in the official Gazette, specify;]⁵⁸

⁵⁹[“(15A) “licensed integrator” means any person licensed by the Board to provide electronic invoicing system for integration of registered persons in the prescribed manner;]⁵⁹

(16) “manufacture” or “produce” includes –

(a) any process in which an article singly or in combination with other articles, materials, components, is either converted into another distinct article or product or is so changed, transformed or reshaped that it becomes capable of being put to use differently or distinctly and includes any process incidental or ancillary to the completion of a manufactured product;

(b) process of printing, publishing, lithography and engraving; and

(c) process and operations of assembling, mixing, cutting, diluting, bottling, packaging, repacking or preparation of goods in any other manner;

(17) “manufacturer” or “producer” means a person who engages, whether exclusively or not, in the production or manufacture of goods whether or not the raw material of which the goods are produced or manufactured are owned by him; and shall include –

(a) a person who by any process or operation assembles, mixes, cuts, dilutes, bottles, packages, repackages or prepares goods by any other manner;

(b) an assignee or trustee in bankruptcy, liquidator, executor, or curator or any manufacturer or producer and any person who disposes of his assets in any fiduciary capacity; and

(c) any person, firm or company which owns, holds, claims or uses any patent, proprietary, or other right to goods being manufactured, whether in his or its name, or on his or its behalf, as the case may be, whether or not such person, firm or company sells, distributes, consigns or otherwise disposes of the goods ⁶⁰[:]⁶⁰

⁶¹[Provided that for the purpose of refund under this Act, only such shall be treated as manufacturer-cum-exporter who owns or has his own manufacturing facility to manufacture or produce the goods exported or to be exported;]⁶¹

⁶²[(17A) “National faceless centre” means National faceless centre as defined in section 32C of the Act;]⁶²

⁶³[(18) “Officer of Inland Revenue” means an officer appointed under section 30;]⁶³

⁶⁴[(18A) “online marketplace” online marketplace” means online interfaces that facilitate, for a fee, the direct interaction between multiple buyers and multiple sellers via digital orders for supply of goods, with or without the platform taking economic ownership of the goods that are being sold;”;

(19) “open market price” means the consideration in money which that supply or a similar supply would generally fetch in an open market;

⁶⁵[(20) “output tax”, in relation to a registered person, means –

(a) tax levied under this Act on a supply of goods, made by the person;

(b) tax levied under the Federal Excise Act, 2005 in sales tax mode as a duty of excise on the manufacture or production of the goods, or the rendering or providing of the services, by the person;

⁶⁶[(c) sales tax levied on the services rendered or provided by the person under Islamabad Capital Territory (Tax on Services) Ordinance, 2001 (XLII of 2001);]⁶⁶

⁶⁷(20A) “payment intermediary” means a banking company, any financial institution including a licensed foreign exchange company or payment gateway that facilitate the transfer of funds or payment instructions between two or more parties to enable, process, route, or settle payments with respect to goods in a financial transaction, without being the ultimate source or recipient of the payment;”;

⁶⁸[(21) “person” means,–

(a) an individual;

(b) a company or association of persons incorporated, formed, organized or established in Pakistan or elsewhere;

(c) the Federal Government;

(d) a Provincial Government;

(e) a local authority in Pakistan; or

(f) a foreign government, a political subdivision of a foreign government, or public international organization;]⁶⁸

(22) “prescribed” means prescribed by rules made under this Act;

⁶⁹[(22)(1A) “production monitoring system” means any system or technology, used for the purposes of monitoring production and sale of goods, whether in real-time or otherwise, including such systems or technologies as may be prescribed by the Board from time to time;]⁶⁹

⁷⁰[(22A) “Provincial sales tax” means tax levied under, Provincial laws or laws relating to Islamabad Capital Territory, which are declared by the Federal Government, through notification in the official Gazette to be Provincial Sales Tax for the purpose of input tax;]⁷⁰

(23) “registered office” means the office or other place of business specified by the registered person in the application made by him for registration under this Act or through any subsequent application to the ⁷¹[Commissioner]⁷¹;

(24) “registration number” means the number allocated to the registered person for the purpose of this Act;

⁷²[(25) “registered person” means a person who is registered or is liable to be registered under this Act:

Provided that a person liable to be registered but not registered under this Act ⁷³[...]⁷³ shall not be entitled to any benefit available to a registered person under any of the provisions of this Act or the rules made thereunder;]⁷²

⁷⁴[(26 ) ***]⁷⁴

(27) “retail price”, with reference to the Third Schedule, means the price fixed by the manufacturer ⁷⁵[or importer, in case of imported goods]⁷⁵

⁷⁶[...]⁷⁶, inclusive of all ⁷⁷[duties]⁷⁷, charges and taxes (other than sales tax ⁷⁸[...]⁷⁸) at which any particular brand or variety of any article ⁷⁹[is]⁷⁹ sold to the general body of consumers or, if more than one such price is so fixed for the same brand or variety, the highest of such price ⁸⁰[:]⁸⁰.

⁸¹[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 ⁸²[;]⁸².]⁸¹

Provided further that the reduction in price on account of chilling charges or any other similar charges in case of aerated water, beverages, mineral water, or fruit juices shall not be more than five percent of the price inclusive of sales tax, federal excise duty and all taxes other than income tax on which such goods are actually sold to the general body of consumers:

Provided also that, where the Board deems it necessary it may, by notification in the official gazette, fix the retail price of goods specified in the third schedule:

Provided further also that, in case of imported goods specified in the Third Schedule, the retail price shall not be less than one hundred thirty percent of the value determined under section 25 of the Customs Act, 1969 (IV of 1969), including the amount of customs duties and federal excise duty levied thereon.

(28) “retailer” means a person ⁸³[***]⁸³ supplying goods to general public for the purpose of consumption ⁸⁴[:]⁸⁴.

⁸⁵[Provided that any person, who combines the business of import and retail or manufacture or production with retail, shall notify and advertise wholesale prices and retail prices separately, and declare the address of retail outlets ⁸⁶[***]⁸⁶.]⁸⁵

(28A) ***]⁶⁵

(29) “return” means any return required to be furnished under Chapter-V of this Act;

⁸⁸[(29A) “sales tax” means – –

(a) the tax, additional tax, or default surcharge levied under this Act;

(b) a fine, penalty or fee imposed or charged under this Act ⁸⁹[excluding fee and service charges imposed and collected under section 76]⁸⁹; and

(c) any other sum payable under the provisions of this Act or the rules made thereunder;]⁸⁸

⁹⁰[(29AA) “sales tax account” means an account representing the double entry recording of sales tax transactions in the books of account;]⁹⁰

(30) “Schedule” means a Schedule appended to this Act;

(31) “similar supply”, in relation to the open market price of goods, means any other supply of goods which closely or substantially ⁹¹[resembles]⁹¹ the characteristics, quantity, components and materials of the aforementioned goods;

⁹²[(31A) “special audit” means an audit conducted under section 32A;]⁹²

(32) “Special Judge” means the Special Judge appointed under Section ⁹³[37C of the act until such appointment is made by the Special Judge appointed under section]⁹³ 185 of the Customs Act;

⁹⁴[(33) “supply” means a sale or other transfer of the right to dispose of goods as owner, including such sale or transfer under a hire purchase agreement, and also includes –

(a) putting to private, business or non-business use of goods produced or manufactured in the course of taxable activity for purposes other than those of making a taxable supply;

(b) auction or disposal of goods to satisfy a debt owed by a person; ⁹⁵[***]⁹⁵

(c) possession of taxable goods held immediately before a person ceases to be a registered person ⁹⁶[; ⁹⁷[***]⁹⁷]⁹⁶

⁹⁸[(d) in case of manufacture of goods belonging to another person, the transfer or delivery of such goods to the owner or to a person nominated by him ⁹⁹[; and]⁹⁹

¹⁰⁰[***]¹⁰⁰

Provided that the ¹⁰¹[Board, with the approval of the Federal Minister-in-charge,]¹⁰¹ may, by notification in the official Gazette, specify such other transactions which shall or shall not constitute supply;]⁹⁸

¹⁰²[(33A) “supply chain” means the series of transactions between buyers and sellers from the stage of first purchase or import to the stage of final supply;]¹⁰²

¹⁰³[(34)]¹⁰³ tax”, unless the context requires otherwise, means sales tax;]⁹⁴

¹⁰⁴[(35) “taxable activity”, means any economic activity carried on by a person whether or not for profit, and includes – –

(a) an activity carried on in the form of a business, trade or manufacture;

(b) an activity that involves the supply of goods, the rendering or providing of services, or both to another person;

(c) a one-off adventure or concern in the nature of a trade; and

(d) anything done or undertaken during the commencement or termination of the economic activity, but does not include –

(a) the activities of an employee providing services in that capacity to an employer;

(b) an activity carried on by an individual as a private recreational pursuit or hobby; and

(c) an activity carried on by a person other than an individual which, if carried on by an individual, would fall within sub-clause (b).]¹⁰⁴

(36) “tax fraction” means the amount worked out in accordance with the following formula: – a 100 + a

('a' is the rate of tax specified in section 3);

¹⁰⁵[(37) “tax fraud” means knowingly, intentionally, or dishonestly doing any act or abetting any action to cause loss of tax under this Act, including,-

(a) using or preparing false, forged, and fictitious documents, including returns, statements, annexures, and invoices;

(b) false claim of input tax credit based on fictitious transactions;

(c) issuance of any tax invoice without supply of goods;

(d) tampering with or destroying of any material evidence or documents required to be maintained under this Act or the rules made thereunder;

(e) generating fake input through manipulation of return filing system of the Board and making fake entries in the sales tax returns or in the annexures;

(f) making fictitious compliance of section 73, including routing of payments back to the registered person, or for the benefit of the registered person, through a bank account held by a supplier or a purported supplier;

(g) suppression of supplies that are chargeable to tax under this Act;

(h) making taxable supplies of goods without issuing any tax invoice;

(i) suppression and nonpayment of withholding tax in the prescribed manner beyond a period of three months from due date of payment of tax;

(j) acquisition, possession, transportation, disposal or in any way removing, depositing, keeping, concealing, supplying, or purchasing or in any other manner dealing with, any goods in respect of which there are reasons to believe that these are liable to confiscation under this Act or the rules made thereunder; or

(k) making of taxable supplies without getting registration under this Act.

¹⁰⁶[(38) ***]¹⁰⁶

(39) “taxable goods” means all goods other than those which have been exempted under section 13;

(40) “tax invoice” means a document required to be issued under section 23;

(41) “taxable supply” means a supply of taxable goods made ¹⁰⁷[...]^{107 108}[by an importer, manufacturer, wholesaler (including dealer), distributor or retailer]¹⁰⁸ other than a supply of goods which is exempt under section 13 and includes a supply of goods chargeable to tax at the rate of zero per cent under section 4;

¹⁰⁹[(42) ***]¹⁰⁹

(43) “tax period” means a period of one month or such other period as the ¹¹⁰[Board, with the approval of the Federal Minister-in-charge,]¹¹⁰ may ¹¹¹[, ]¹¹¹ by notification in the official Gazette, specify;

¹¹²[“(43A) ¹¹³[“Tier-1 retailer” means a retailer falling in any one or more of the following categories, namely:-]¹¹³

(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 ¹¹⁴[twelve]¹¹⁴ hundred thousand; ¹¹⁵[ ]¹¹⁵

(d) a wholesaler-cum-retailer ¹¹⁶[having turnover more than two hundred million]¹¹⁶, 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”;]¹¹² [ ] ¹¹⁸[***]¹¹⁸

¹¹⁹[***]¹¹⁹

¹²⁰[***]¹²⁰

¹²¹[***]¹²¹

¹²²[(gb) a retailer having turnover exceeding two hundred million rupees either by way of declaration or from worked back value of turnover from tax deduction under section 236G or 236H of Income Tax Ordinance, 2001 (XLIV of 2001) during the immediately preceding twelve consecutive months; and]¹²²

¹²³[(h) any other person or class of persons as prescribed by the Board ¹²⁴[;]¹²⁴

[

Provided that the Board may also exclude any person or class of persons through a notification in the official gazette;]

¹²⁵[(44) “time of supply”, in relation to,–

(a) a supply of goods, other than under hire purchase agreement, means the time at which the goods are delivered or made available to the recipient of the supply 110 [or the time when any payment is received by the supplier in respect of that supply, whichever is earlier] ¹²⁷[****]¹²⁷;

(b) a supply of goods under a hire purchase agreement, means the time at which the agreement is entered into; and

(c) services, means the time at which the services are rendered or provided;

¹²⁸[Provided that in respect of sub clause ( a),(b) or (c), where any part payment is received, –

(i) for the supply in a tax period, it shall be accounted for in the return for that tax period; and

(ii) in respect of exempt supply, it shall be accounted for in the return for the tax period during which the exemption is withdrawn from such supply;]¹²⁸

(44A) “trust” means an obligation annexed to the ownership of property and arising out of the confidence reposed in and accepted by the owner, or declared and accepted by the owner for the benefit of another, or of another and the owner, and includes a unit trust;

(44AA) “unit trust” means any trust under which beneficial interests are divided into units such that the entitlements of the beneficiaries to income or capital are determined by the number of units held;]¹²⁵

¹²⁹[(45) ***]¹²⁹

(46) “value of supply” means:--

(a) in respect of a taxable supply, the consideration in money including all Federal and Provincial duties ¹³⁰[and taxes, if any, which the supplier receives from the recipient for that supply but excluding the amount of tax:

Provided that –

(i) in case the consideration for a supply is in kind or is partly in kind and partly in money, the value of the supply shall mean the open market price of the supply excluding the amount of tax; ¹³¹[... ]¹³¹

(ii) in case the supplier and recipient are associated persons and the supply is made for no consideration or for a consideration which is lower than the open market price, the value of supply shall mean the open market price of the supply excluding the amount of tax; ¹³²[and]¹³²

¹³³[(iii) in case a taxable supply is made to a consumer from general public on installment basis on a price inclusive of mark up or surcharge rendering it higher than open market price, the value of supply shall mean the open market price of the supply excluding the amount of tax.]¹³³

(b) in case of trade discounts, the discounted price excluding the amount of tax; provided the tax invoice shows the discounted price and the related tax and the discount allowed is in conformity with the normal business practices;

(c) in case where for any special nature of transaction it is difficult to ascertain the value of a supply, the open market price;

(d) in case of imported goods ¹³⁴[excluding those as specified in the Third Schedule]¹³⁴, the value determined under section 25 ¹³⁵[...]¹³⁵ of the Customs Act, including the amount of customs-duties and ¹³⁶[federal]¹³⁶ excise duty levied thereon; ¹³⁷[...]¹³⁷

(e) in case where there is sufficient reason to believe that the value of a supply has not been correctly declared in the invoice, the value determined by the Valuation Committee comprising representatives of trade and the ¹³⁸[Inland Revenue]¹³⁸ constituted by the ¹³⁹[Commissioner]^{139 140}[;]^{140 141}[ ]¹⁴¹

¹⁴²[(f) in case of manufacture of goods belonging to another person, the actual consideration received by the manufacturer for the value addition carried out in relation to such goods;]¹⁴²

¹⁴³[(g)]¹⁴³ in case of a taxable supply, with reference to retail tax, the price of taxable goods excluding the amount of retail tax, which a supplier will charge at the time of making taxable supply by him, or such other price as the Board may, by a notification in the official Gazette, specify.]¹³⁰

¹⁴⁴[(h) in case of supply of electricity by an independent power producer ¹⁴⁵[or WAPDA]¹⁴⁵, the amount received on account of energy purchase price only; and the amount received on account of capacity purchase price, energy purchase price premium, excess bonus, supplemental charges etc. shall not be included in the value of supply; ¹⁴⁶[***]¹⁴⁶

(i) in case of supply of electric power and gas by a distribution company, the total amount billed including price of electricity and natural gas, as the case may be, charges, rents, commissions and all duties and taxes local, provincial and federal but excluding the amount of late payment surcharge and the amount of sales tax; ¹⁴⁷[:]¹⁴⁷

Explanation.- It is clarified that the value of supply does not include the amount of subsidy provided by the federal government or provincial governments to the electricity ¹⁴⁸[or natural gas including re-gasified liquefied natural gas]¹⁴⁸ consumers and has never been chargeable to tax under the Act;]¹⁴⁴

[(j) in case of registered person who is engaged in purchasing used vehicles from general public on which sales tax had already been paid at the time of import or manufacturing, and which are, later on, sold in the open market after making certain value addition, value of supply will be the difference between sale and purchase price of the said vehicle on the basis of the valuation method prescribed by the Board.]

¹⁴⁹[Provided]¹⁴⁹ that, where the Board deems it necessary it may, by notification in the official Gazette, fix the value of any imported goods ¹⁵⁰[, including those as specified in the Third Schedule,]¹⁵⁰ or taxable supplies or class of supplies and for that purpose fix different values for different classes or description of same type of imported goods or supplies ¹⁵¹[.]¹⁵¹ [For this purpose of valuation, the Board may use the valuation of such goods as notified by Pakistan Bureau of Statistics immediately before the start of the tax period. The Board may also, where it deems fit, outsource the functions of valuation of goods to a third party in the mode and manner as may be prescribed:]

Provided further that where the value at which import or supply is made is higher than the value fixed by the Board, the value of goods shall, unless otherwise directed by the Board, be the value at which the import or supply is made;]¹²³

¹⁵²[(46A) “whistleblower” means whistleblower as defined in section 72D of the Sales Tax Act, 1990;]¹⁵²

(47) “wholesaler” ¹⁵³[includes a dealer and]¹⁵³ means any person who carries on, whether regularly or otherwise, the business of buying and selling goods by wholesale or of supplying or distributing goods, directly or indirectly, by wholesale for cash or deferred payment or for commission or other valuable consideration or stores such goods belonging to others as an agent for the purpose of sale; and includes ¹⁵⁴[a person supplying taxable goods to ¹⁵⁵[a person ¹⁵⁶[who deducts income tax at source under the Income Tax Ordinance, 2001 (XLIX of 2001)]¹⁵⁶]^{155 157}[...]¹⁵⁷; and

(48) “zero-rated supply” means a taxable supply which is charged to tax at the rate of zero per cent under section 4.]¹⁵⁴

CHAPTER II
SCOPE AND PAYMENT OF TAX

3. Scope of tax.
– (1) Subject to the provisions of this Act, there shall be charged, levied and paid a tax known as sales tax at the rate of ¹⁵⁸[eighteen]¹⁵⁸ per cent of the value of–

(a) taxable supplies made ¹⁵⁹[…]¹⁵⁹ by a registered person in the course or furtherance of any ¹⁶⁰[taxable activity]¹⁶⁰ carried on by him; and

(b) goods imported into Pakistan, ¹⁶¹[irrespective of their final destination in territories of Pakistan]¹⁶¹.

¹⁶²[(1A) Subject to the provision of sub section (6) of section 8 or any notification issued thereunder, where taxable supplies are made to a person who has not obtained registration number ¹⁶³[or he is not an active taxpayer]¹⁶³, there shall be charged, levied and paid a further tax at the rate of ¹⁶⁴[four]¹⁶⁴ percent of the value In addition to the rate specified in sub sections

(l), (1B), (2), (5), ¹⁶⁵[(6) and section 4]¹⁶⁵

Provided that the Federal Govt. may, by notification in the official Gazette, specify the taxable supplies in respect of which the further tax shall not be charged, levied and paid.]¹⁶²

¹⁶⁶[(1B) On the goods specified in the Tenth Schedule, in lieu of levying and collecting tax under sub-section (1), the tax shall be levied and collected, in the mode and manner specified therein−

(a) on the production capacity of plants, machinery, undertaking, establishments or installation producing ¹⁶⁷[or]¹⁶⁷ manufacturing such goods; or

(b) on fixed basis, from any person who is in a position to collect such tax due to the nature of the business, and different rates may be so prescribed for different regions or areas.]¹⁶⁶

¹⁶⁸[(2) Notwithstanding the provisions of sub-section (1): –

(a) taxable supplies ¹⁶⁹[and import of goods]¹⁶⁹ specified in the Third Schedule shall be charged to tax at the rate of ¹⁷⁰[eighteen]¹⁷⁰ per cent of the retail price ¹⁷¹[or in case such supplies ¹⁷²[or imports]¹⁷² are also specified in the Eighth Schedule, at the rates specified therein and the retail price thereof,]¹⁷¹ along with the amount of sales tax shall be legibly, prominently and indelibly printed or embossed by the manufacturer ¹⁷³[, or the importer, in case of imported goods,]¹⁷³ on each article, packet, container, package, cover or label, as the case may be; ¹⁷⁴[:]¹⁷⁴¹⁷⁵[ ]¹⁷⁵

¹⁷⁶[Provided that the Federal Government may, subject to such conditions and restrictions as it may impose, by notification in the official Gazette, declare that the tax on goods specified in the Third Schedule shall be collected and paid at such higher rate or rates on the retail price thereof, as may be specified in the said notification: and

¹⁷⁷[Provided ¹⁷⁸[further]¹⁷⁸ that the ¹⁷⁹[Board]¹⁷⁹, may, by notification in the official Gazette, exclude any taxable supply ¹⁸⁰[or import]¹⁸⁰ from the said Schedule or include any taxable supply ¹⁸¹[or import]¹⁸¹ therein; ¹⁸²[…]¹⁸²

(aa) ¹⁸³[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]¹⁸³

¹⁸⁴[(b) the ¹⁸⁵[Federal Government]¹⁸⁵ may, subject to such conditions and restrictions as it may impose, by notification in the official Gazette, declare that in respect of any taxable goods, the tax shall be charged, collected and paid in such manner and at such higher or lower rate or rates as may be specified in the said notification.]¹⁸⁴

(3) The liability to pay the tax shall be,-

(a) in the case of supply of goods ¹⁸⁶[…]¹⁸⁶, of the person making the supply,

(b) in the case of goods imported into Pakistan, of the person importing the goods, 171and

(c) in the case of supply of digitally ordered taxable goods by online market place, website and software application from within Pakistan during the course of e-commerce, the liability to collect and pay tax shall be of payment intermediary including a banking company, a financial institution, licensed exchange company or payment gateway in case the payment is made digitally and of the courier delivering the goods where those are supplied on Cash on Delivery (CoD) basis at the rates provided in the Eleventh Schedule.”;

¹⁸⁸[(3A) Notwithstanding anything contained in clause (a) of sub-section (3), the ¹⁸⁹[Board, with the approval of the Federal Minister-in-charge,]¹⁸⁹ may, by a notification in the official Gazette, specify the goods in respect of which the liability to pay tax shall be of the person receiving the supply.]¹⁸⁸

¹⁹⁰[(3B) Notwithstanding anything contained in sub section (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.]¹⁹⁰

¹⁹¹[(4) ***]¹⁹¹

¹⁹²[(5) The ¹⁹³[Federal Government]¹⁹³ may, in addition to the tax levied under sub-section (1) ¹⁹⁴[…]¹⁹⁴, ¹⁹⁵[…]¹⁹⁵ sub-section (2) and sub-section (4), levy and collect ¹⁹⁶[“tax at such extra rate or amount”]¹⁹⁶ not exceeding ¹⁹⁷[eighteen]¹⁹⁷ per cent of the value of such goods or class of goods and on such persons or class of persons, in such mode, manner and at time, and subject to such conditions and limitations as it may, by rules, prescribe.]¹⁹²

¹⁹⁸[(6) The Federal Government or ¹⁹⁹[the Board]¹⁹⁹ may, in lieu of the tax under sub-section (1), by notification in the official Gazette, levy and collect such amount of tax as it may deem fit on any supplies or class of supplies or on any goods or class of goods and may also specify the mode, manner or time of payment of such amount of tax.

²⁰⁰[(7) The tax shall be withheld 11[***] at the rate as specified in the Eleventh Schedule, by any person or class of persons ²⁰¹[being purchaser of goods or services ²⁰²[, other than the services liable to pay sales tax under a Provincial enactment,]²⁰² as withholding agent for the purpose of depositing the same, in such manner and subject to such conditions or restrictions as the Board may prescribe in this behalf through a notification in the official Gazette ²⁰³[:]^{203 204}[omitted]²⁰⁴

(7A) The tax withheld as provided in the Eleventh Schedule by the payment intermediary or the courier, as the case may be, shall be final discharge of tax liability in respect of taxable supplies of digitally ordered goods by;

(i) cottage industry as defined in clause (5AB) of section 2 of this Act; and

(ii) retailers other than tier-I retailers”

²⁰⁵[(8) Notwithstanding anything contained in any law or notification made thereunder ²⁰⁶[, but subject to the provisions of clause (b) of sub-section (2)]²⁰⁶ 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 ²⁰⁷[eighteen]²⁰⁷ 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.

²⁰⁸[(9) Notwithstanding anything contained in sub-section (1), tax shall be charged from retailers, other than those falling in Tier-1, through their monthly electricity bills, at the rate of five percent where the monthly bill amount does not exceed rupees twenty thousand and at the rate of seven and half percent where the monthly bill amount exceeds the aforesaid amount and the electricity supplier shall deposit the amount so collected directly without adjusting against his input tax:

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):

Provided further that the Commissioner of Inland Revenue having jurisdiction shall issue order to the electricity supplier regarding exclusion of a person who is either a Tier-1 retailer or not a retailer.]²⁰⁸

²⁰⁹[(9A) Notwithstanding anything contained in this Act, Tier-1 retailers shall pay sales tax at the rate as applicable to the goods sold under relevant provisions of this Act or a notification issued there under:

²¹⁰[****]^{210 211}[omitted]²¹¹

²¹²[(9AA) In respect of goods, specified in the Thirteenth Schedule, the minimum production for a month shall be determined on the basis of a single or more inputs as consumed in the production process as per criterion specified in the Thirteenth Schedule and if minimum production so determined exceeds the actual supplies for the month, such minimum production shall be treated as quantity supplied during the month and the liability to pay tax shall be discharged accordingly.]²¹²

²¹³[(10) *** repealed]²¹³

²¹⁴[(11)***]²¹⁴

²¹⁵[(12) Notwithstanding anything contained in this Act, the Federal Government may, in lieu of or in addition to the tax under sub-section (9), by notification in the official Gazette, levy and collect such amount of tax at such rates and from such date as it may deem fit, from retailers, other than those falling in Tier-1, through their monthly electricity bill, and may also specify the mode, manner or time of payment of such tax:

Provided that different rates or amounts of tax may be specified for different persons or class of persons.]²¹⁵

²¹⁶[3A. [Omitted].]²¹⁶

²¹⁷[3AA. [Omitted].]²¹⁷

²¹⁸[3AAA. [Omitted].]²¹⁸

²¹⁹[3B. Collection of excess sales tax etc.
– (1) Any person who has collected or collects any tax or charge, whether under misapprehension of any provision of this Act or otherwise, which was not payable as tax or charge or which is in excess of the tax or charge actually payable and the incidence of which has been passed on to the consumer, shall pay the amount of tax or charge so collected to the Federal Government.

²²⁰[(2) Notwithstanding anything contained in any law or judgement 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.]²²⁰

(3) The burden of proof that the incidence of tax or charge referred to in sub-section (1) has been or has not been passed to the consumer shall be on the person collecting the tax or charge.]²¹⁹

4. Zero rating.
– Notwithstanding the provisions of section 3 ²²¹[except those of sub-section (1A)]²²¹, ²²²[...]²²² the following goods shall be charged to tax at the rate of zero per cent:--

[(a) goods exported, or the goods specified in the Fifth Schedule;]

(b) supply of stores and provisions for consumption aboard a conveyance proceeding to a destination outside Pakistan as specified in section 24 of the Customs Act, 1969 (IV of 1969);

²²³[(c) such other goods, as the Federal Government may specify by notification in the official Gazette, whenever circumstances exist to take immediate action for the purposes of national security, natural disaster, national food security in emergency situations and implementation of bilateral and multilateral agreements:”; and]²²³

²²⁴[(d) omitted.]²²⁴

Provided that nothing in this section shall apply in respect of a supply of goods which –

(i) are exported, but have been or are intended to be re-imported into Pakistan; or

(ii) have been entered for export under Section 131 of the Customs Act, 1969 (IV of 1969), but are not exported ²²⁵[***]^{225 226}[; or]²²⁶

(iii) ²²⁷[have been exported to a country specified by the Federal Government, by Notification in the official Gazette ²²⁸[:]²²⁸

²²⁹[Provided further that the Federal Government may, by a notification in the official Gazette, restrict the amount of credit for input tax actually paid and claimed by a person making a zero-rated supply of goods otherwise chargeable to sales tax.]²²⁹

5. Change in the rate of tax.
– If there is a change in the rate of tax-

(a) a taxable supply made ²³⁰[***]²³⁰ by a registered person shall be charged to tax at such rate as is in force at the time of supply;

(b) imported goods shall be charged to“tax at such rate as” is in force,-

(i) in case the goods are entered for home consumption, on the date on a 9[goods declaration] is presented under section 79 of the Customs Act, 1969 (IV of 1969);

(ii) in case the goods are cleared from warehouse, on the date on which a ²³¹[goods declaration]²³¹ for clearance of such goods is presented under section 104 of the Customs Act, 1969 (IV of 1969);

Provided that where a 9[goods declaration] is presented in advance of the arrival of the conveyance by which the goods are imported, the tax shall be charged as is in force on the date on which the manifest of the conveyance is delivered:

Provided further that if the tax is not paid within seven days of the of the ²³²[goods declaration]^{232 233}[under section 104 of the Customs Act,]²³³ the tax shall be charged at the rate as is in force on the date on which tax is actually paid.

6. Time and manner of payment.
– (1) The tax in respect of goods imported into Pakistan shall be charged and paid in the same manner and at the same time as if it were a duty of customs payable under the Customs Act, 1969 ²³⁴[and the provisions of the said Act ²³⁵[including section 31A thereof]²³⁵, shall, so far as they relate to collection, payment and enforcement ²³⁶[including recovery]²³⁶ of tax under this Act on such goods where no specific provision exists in this Act, apply,]²³⁴.

²³⁷[(1A) Notwithstanding anything contained in any other law for the time being in force, including but not limited to the Protection of Economic Reforms Act, 1992 (XII of 1992), and notwithstanding any decision or judgment of any forum, authority or court whether passed, before or after the promulgation of the Finance Act, 1998 (III of 1998), the provisions of section 31-A of the Customs Act, 1969 (IV of 1969), referred to in sub-section (1) shall be incorporated in and shall be deemed to have always been so incorporated in this Act and no person shall be entitled to any exemption from or adjustment of or refund of tax on account of the absence of such a provision in this Act, or in consequence of any decision or judgment of any forum, authority or court passed on that ground or on the basis of the doctrine of promissory estoppel or on account of any promise or commitment made or understanding given whether in writing or otherwise, by any government department or authority.]²³⁷

(2) The tax in respect of taxable supplies made ²³⁸[***]²³⁸ during a tax period shall be paid by the registered person ²³⁹[by the date as prescribed in this respect]^{239 240}[:]²⁴⁰

²⁴¹[Provided that the Board may, by a notification in the Official Gazette, direct that the tax in respect of all or such classes of supplies (other than zero-rated supplies) of all or such taxable goods, as may be specified in the aforesaid notification, shall be charged, collected and paid in any other way, mode, manner or at time as may be specified therein ²⁴²[;]²⁴²

[Provided further that in the case of steel melters, steel rerollers and composite units, the tax shall be collected on the basis of per unit electricity consumption including use of electricity produced by a captive power plant or through any other alternative source of energy at the rate or rates as prescribed by the Board, through notification in the official Gazette. The tax so collected shall be an adjustable input tax, to be claimed in the return of the month in which such payment is made:

Provided also that the Board may prescribe a lower per unit rate or rates of electricity consumption on the basis of input tax paid on imports or other invoices issued through electronic invoicing system, digitally issued invoices for compliant and digitally integrated steel melters, re-rollers and composite units to minimize creation of refunds:

Provided also that the per unit sales tax shall be determined by the Board on the basis of minimum notified price under clause (46) of section 2 of this Act and the industrial benchmarks of consumption of electricity against per ton production of steel products.]²⁴¹

²⁴³[(3) The tax due on taxable supplies ²⁴⁴[***]²⁴⁴ shall be paid by any of the following modes, namely:-

(i) through deposit in a bank designated by the Board; and

(ii) through such other mode and manner as may be specified by the Board.]²⁴³

²⁴⁵[4. ***]²⁴⁵

²⁴⁶[(5) The Federal Government may, subject to such conditions, limitations and restrictions as it may impose, by notification in the official Gazette, allow payment of sales tax on installments basis by the Federal or Provincial Governments or any public sector organization on import or supply of any goods or class of goods:

Provided that such payment may be allowed from any previous date specified in the notification under this sub-section.]²⁴⁶

7. Determination of tax liability.
– (1) ²⁴⁷[Subject to the provisions of ²⁴⁸[section 8 and]²⁴⁸ 8B, for]²⁴⁷ the purpose of determining his tax liability in respect of taxable supplies made during a tax period, a registered person shall ²⁴⁹[, subject to the provisions of section 73,]²⁴⁹ be entitled to deduct input tax ²⁵⁰[paid ²⁵¹[or payable ²⁵²[during the tax period for the purpose of taxable supplies made, or to be made, by him]²⁵² from the output tax ²⁵³[excluding the amount of further tax under sub-section (1A) of section 3.]^{253 254}[ ]²⁵⁴ that is due from him in respect of that tax period and to make such other adjustments as are specified in Section 9 ²⁵⁵[:]²⁵⁵

²⁵⁶[Provided that where a registered person did not deduct input tax within the relevant period, he may claim such tax in the return for any of the six succeeding tax periods.]²⁵⁶

(2) A registered person shall not be entitled to deduct input tax from output tax unless,-

(i) in case of a claim for input tax in respect of a taxable supply made ²⁵⁷[***]²⁵⁷, he holds a tax invoice ²⁵⁸[in his name and bearing his registration number]²⁵⁸ in respect of such supply ²⁵⁹[, or in case of supply of electricity or gas, a bill bearing his registration number and the address where the connection is installed]^{259 260}[:]²⁶⁰

Provided that from the date to be notified by the Board in this respect, in addition to above, if the supplier has not declared such supply in his return or he has not paid amount of tax due as indicated in his return;

(ii) ²⁶¹[in case of goods imported into Pakistan, he holds bill of entry or goods declaration in his name and showing his sales tax registration number, duly cleared by the customs under section 79 ²⁶²[, section 81]²⁶² or section 104 of the Customs Act, 1969 (IV of 1969);]²⁶¹

(iii) ²⁶³[in case of goods purchased in auction, he holds a treasury challan, ²⁶⁴[in his name and bearing his registration number,]²⁶⁴ showing payment of sales tax;]²⁶³

²⁶⁵[(iv) ***]²⁶⁵

²⁶⁶[(3) Notwithstanding anything in sub-sections (1) and (2), ²⁶⁷[Board, with the approval of the Federal Minister-in-charge,]²⁶⁷ may, by a special order, subject to such conditions, limitations or restrictions as may be specified therein allow a registered person to deduct input tax paid by him from the output tax determined or to be determined as due from him under this Act.]²⁶⁶

²⁶⁸[(4) Notwithstanding anything contained in this Act or rules made there under, the ²⁶⁹[Federal Government]²⁶⁹ may, by notification in the official Gazette, subject to such conditions, limitations or restrictions as may be specified therein, allow a registered person or class of persons to deduct such amount of input tax from the output tax as may be specified in the said notification.]²⁶⁸

²⁷⁰[(5) Notwithstanding anything contained in this Act or the rules made thereunder, the Board, by notification in the official Gazette, may impose restrictions on wastage of material on which input tax has been claimed in respect of the goods or class of goods.]²⁷⁰

²⁷¹[7A. Levy and collection of tax on specified goods on value addition.
– ²⁷²[(1) Notwithstanding anything contained in this Act or the rules made there under, the 10[Federal Government] may specify, by notification in the official Gazette, that sales tax chargeable on the supply of goods of such description or class shall, with such limitations or restrictions as may be prescribed, be levied and collected on the difference between the value of supply for which the goods are acquired and the value of supply for which the goods, either in the same state or on further manufacture, are supplied.]²⁷²

²⁷³[(2) Notwithstanding anything contained in this Act or the rules made thereunder, in respect of the goods or class of goods specified in the Twelfth Schedule, the minimum value addition tax, against the value added by the registered person, shall be payable, at the rate and by the registered persons or class of registered persons, specified therein, subject to the conditions, limitations, restrictions and procedure specified therein:

Provided that the Federal Government may, through a notification published in the official Gazette, amend any provision of the said Twelfth Schedule.]²⁷³

²⁷⁴[8. Tax credit not allowed.
– (1) Notwithstanding anything contained in this Act, a registered person shall not be entitled to reclaim or deduct input tax paid on –

²⁷⁵[(a) the goods ²⁷⁶[or services]²⁷⁶ used or to be used for any purpose other ²⁷⁷[***]²⁷⁷ for taxable supplies made or to be made by him;]²⁷⁵

(b) any other goods or services which the ²⁷⁸[Federal Government]²⁷⁸ may, by a notification in the official Gazette, specify ²⁷⁹[;²⁸⁰[***]²⁸⁰]²⁷⁹

²⁸¹[(c)]^{281 282}[***]²⁸² the goods under ²⁸³[sub-section]²⁸³ (5) of section 3 ²⁸⁴[:]²⁸⁴

²⁸⁵[(ca) the goods ²⁸⁶[or services]²⁸⁶ in respect of which sales tax has not been deposited in the Government treasury by the respective supplier;]²⁸⁵

²⁸⁷[(caa) purchases, in respect of which a discrepancy is indicated by CREST or input tax of which is not verifiable in the supply chain;]²⁸⁷

²⁸⁸[(d) fake invoices; ²⁸⁹[***]²⁸⁹

(e) purchases made by such registered person, in case he fails to furnish the information required by the Board through a notification issued under sub-section (5) of section 26 [;]

²⁹⁰[(f) goods and services not related to the taxable supplies made by the registered person.]²⁹⁰

²⁹¹[(g) goods and services acquired for personal or non-business consumption;]²⁹¹

²⁹²[(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 ²⁹³[pre-fabricated buildings and]²⁹³ such goods acquired for sale or re-sale or for direct use in the production or manufacture of taxable goods; ²⁹⁴[***]²⁹⁴]²⁹²

²⁹⁵[(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]^{295 296}[;]²⁹⁶

²⁹⁷[(j) services in respect of which input tax adjustment is barred under the respective provincial sales tax law;

(k) import or purchase of agricultural machinery or equipment subject to sales tax at the rate of 7% under Eighth Schedule to this Act;

(l) from the date to be notified by the Board, such goods and services which, at the time of filing of return by the buyer, have not been declared by the supplier in his return ²⁹⁸[or he has not paid amount of tax due as indicated in his return; and

²⁹⁹[(m) the input goods ³⁰⁰[or services]³⁰⁰ attributable to supplies made to un-registered ³⁰¹[distributor]³⁰¹, on pro-rata basis, for which sale invoices do not bear the NIC number or NTN as the case may be, of the recipient as stipulated in section 23.]²⁹⁹

(2) If a registered person deals in taxable and non-taxable supplies, he can reclaim only such proportion of the input tax as is attributable to taxable supplies in such manner as may be specified by the Board.

(3) No person other than a registered person shall make any deduction or reclaim input tax in respect of taxable supplies made or to be made by him.

³⁰²[(4) ***]³⁰²

³⁰³[(5) Notwithstanding anything contained in any other law for the time being in force or any decision of any Court, for the purposes of this section, no input tax credit shall be allowed to the persons who paid fixed tax under any provisions of this Act as it existed at any time prior to the first day of December, 1998.]³⁰³

³⁰⁴[(6) Notwithstanding anything contained in any other law for the time being in force or any provision of this Act, ³⁰⁵[Board, with the approval of the Federal Minister-in-charge,]³⁰⁵ may, by notification in the official Gazette, specify any goods or class of goods which a registered person cannot supply to any person who is not registered ³⁰⁶[***]³⁰⁶ under this Act.]³⁰⁴

³⁰⁷[(7) ***]³⁰⁷

³⁰⁸[8A. Joint and several liability of registered persons in supply chain where tax unpaid.………………………………………………….........42.
chain where tax unpaid.– Where a registered person receiving a taxable supply from another registered person is in the knowledge or has reasonable grounds to suspect that some or all of the tax payable in respect of that supply or any previous or subsequent supply of the goods supplied would go unpaid ³⁰⁹[, of which the burden to prove shall be on the department]³⁰⁹ such person as well as the person making the taxable supply shall be jointly and severally liable for payment of such unpaid amount of tax ³¹⁰[:]³¹⁰]³⁰⁸

³¹¹[Provided that the Board may by notification in the official gazette, exempt any transaction or transactions from the provisions of this section.]³¹¹

³¹²[8B. Adjustable input tax.
– (1) Notwithstanding anything contained in this Act, in relation to a tax period, a registered person ³¹³[***]³¹³ shall not be allowed to adjust input tax in excess of ninety per cent of the output tax for that tax period:

³¹⁴[Provided that the restriction on the adjustment of input tax in excess of ninety percent of the output tax, shall not apply in case of fixed assets or Capital goods:]³¹⁴

Provided further that the Board may by notification in the official Gazette, exclude any person or class of persons from the purview of sub-section (1) ³¹⁵[;]³¹⁵

[

Provided also that the Board may by notification in the official Gazette, reduce or enhance the limit provided in this sub-section for any registered person on the basis of compliance or non-compliance with the production monitoring, digital invoicing, e-bility, POS, or any other electronic system prescribed by the Board for digital integration of data.]

(2) A registered person, subject to sub-section (1), may be allowed adjustment ³¹⁶[or refund]³¹⁶ of input tax not allowed under sub-section (1) subject to the following conditions, namely:–

(i) in the case of registered persons, whose accounts are subject to audit under the Companies Ordinance, 1984, upon furnishing a statement along with annual audited accounts, duly certified by the auditors, showing value additions less than the limit prescribed under sub-section (1) above; or

(ii) in case of other registered persons, subject to the conditions and restrictions as may be specified by the Board by notification in the official Gazette.

(3) The adjustment or refund of input tax mentioned in sub-sections (2), if any, shall be made on yearly basis in the second month following the end of the financial year of the registered person.

(4) Notwithstanding anything contained in sub-sections (1) and (2), the Board may, by notification in the official Gazette, prescribe any other limit of input tax adjustment for any person or class of persons. 301In order to limit input tax allowance, the Board may also use data based automated risk management system to defer certain input tax or fix higher or lower limits of input tax adjustment:

Provided that the registered person may contest the action taken under this sub-section by filing application and documents with the Commissioner concerned, who shall decide the case within thirty days of such application.”;

³¹⁸[(4A) Notwithstanding anything contained in sub-sections (1), (2) and (3), input tax allowed in case of locally manufactured electric vehicles subject to reduced rate of tax under the Eighth Schedule shall be limited to the extent of amount of output tax and no refund or carry forward of excess input tax shall be allowed.]³¹⁸

(5) Any auditor found guilty of misconduct in furnishing the certificate mentioned in sub-section (2) shall be referred to the Council for disciplinary action under section 20D of Chartered Accountants, Ordinance, 1961 (X of 1961).]³¹²

³¹⁹[(6) In case a Tier-1 retailer does not integrate his retail outlet in the manner as prescribed under sub-section (9A) of section 3, during a tax period or part thereof, the adjustable input tax for whole of that tax period shall be reduced by ³²⁰[60%.]³²⁰

9. Debit and credit note.
– Where a registered person has issued a tax invoice in respect of a supply made by him and as a result of cancellation of supply or return of goods or a change in the nature of supply or change in the value of the supply or some such event the amount shown in the tax invoice or the return needs to be modified, the registered person may, subject to such conditions and limitations as the Board may impose, issue a debit or credit note and make corresponding adjustment against output tax in the return ³²¹[;]³²¹

[

Provided that the issuance of debit and credit notes shall be governed by the mechanism including electronic adjustments, as may be prescribed by the Board.]

³²²[10. Refund of input tax.
– (1) If the input tax paid by a registered person on taxable purchases made during a tax period exceeds the output tax on account of zero rated local supplies or export made during that tax period, the excess amount of input tax shall be refunded to the registered person not later than forty-five days of filing of refund claim in such manner and subject to such conditions as the Board may, by notification in the official Gazette specify:

³²³[Provided that in case of excess input tax against supplies other than zero-rated or exports, such excess input tax may be carried forward to the next tax period, along with the input tax as is not adjustable in terms of sub-section (1) of section 8B, and shall be treated as input tax for that period and the Board may, subject to such conditions and restrictions as it may impose, by notification in the official Gazette, prescribe the procedure for refund of such excess input tax.]³²³

Provided further that the Board may, from such date and subject to such conditions and restrictions as it may impose, by notification in the official Gazette, direct that refund of input tax against exports shall be paid ³²⁴[at the fixed rates and in the manner as]³²⁴ notified in the such notification.

(2) If a registered person is liable to pay any tax, default surcharge or penalty payable under any law administered by the Board, the refund of input tax shall be made after adjustment of unpaid outstanding amount of tax or, as the case may, default surcharge and penalty.

(3) Where there is reason to believe that a person has claimed input tax credit or refund which was not admissible to him, the proceedings against him shall be completed within sixty days. For the purposes of enquiry or audit or investigation regarding admissibility of the refund claim, the period of sixty days may be extended up to one hundred and twenty days by an officer not below the rank of an Additional ³²⁵[Commissioner Inland Revenue]³²⁵ and the Board may, for reasons to be recorded in writing, extend the aforesaid period which shall in no case exceed nine months.]³²²

³²⁶[11. [Omitted].]³²⁶

³²⁷[11A. Short paid amounts recoverable without notice.
– Notwithstanding any of the provisions of this Act, where a registered person pays the amount of tax less than the tax due as indicated in his return, the short paid amount of tax along with default surcharge shall be recovered from such person by stopping removal of any goods from his business premises and through attachment of his business bank accounts, without giving him a show cause notice and without prejudice to any other action prescribed under section 48 of this Act or the rules made thereunder:

Provided that no penalty under section 33 of this Act shall be imposed unless a show cause notice is given to such person.]³²⁷

³²⁸[11B. Limitation for issuing orders in certain cases.
For the purposes of issuing an assessment order or any other order in consequence of or to give effect to any order made by the Commissioner (Appeals), Appellate Tribunal, High Court, or Supreme Court, the provisions of section 124 of the Income Tax Ordinance, 2001 (XLIX of 2001) shall apply mutatis mutandis;]³²⁸

³²⁹[11C. Power of tax authorities to modify orders, etc.
Where a question of law has been decided by a High Court or the Appellate Tribunal in the case of a registered person, on or after first day of July, 1990, the Commissioner or an officer of Inland Revenue may, notwithstanding that he has preferred an appeal against the decision of the High Court or made an application for reference against the order of the Appellate Tribunal, as the case may be, follow the said decision in the case of the said taxpayer in so far as it applies to said question of law arising in any assessment pending before the Commissioner or an officer of Inland Revenue, until the decision of the High Court or of the Appellate Tribunal is reversed or modified.

(2) In case the decision of High Court or the Appellate Tribunal, referred to in sub-section (1), is reversed or modified, the Commissioner or an officer of Inland Revenue may, notwithstanding the expiry of period of limitation prescribed for making any assessment or order, within a period of one year from the date of receipt of decision, modify the assessment or order in which the said decision was applied so that it conforms to the final decision.]³²⁹

³³⁰[11D. Best judgment Assessment.
(1) Where a person,

(a) fails to furnish a sales tax return in response to notice under sub-section (2A) of section 26; or

(b) fails to produce before the officer of Inland Revenue not below the rank of Assistant Commissioner under sections 25 or 38A, accounts, documents and records required, or any other relevant document or evidence that may be required by him, the officer of Inland Revenue not below the rank of Assistant Commissioner may, after a notice to show cause to such person, based on any available information or material and to the best of his judgment, make an assessment of tax payable or refund due and also charge penalty and default surcharge.

(2) For the purposes of clause (b) of sub-section (1), the officer of Inland Revenue may also disallow or reduce a registered person input tax on goods if the registered person is unable, to provide invoice or other record or evidence of the transaction or circumstances giving rise to such claim.

(3) Where a best judgment assessment has been made due to default of clause (a) of sub-section (1) and the person files the return within sixty days of issuance of order under this section thereafter and pays the amount of tax payable along with default surcharge and penalty, the notice to show cause and the order of assessment shall abate.

(4) Notwithstanding anything in sub-section (1), where the Federal Board of Revenue has specified conditions for the purpose of determination of minimum tax liability in respect of a person who is required to file return but who fails to file such return, the Officer of Inland Revenue shall determine such liability of the registered person in accordance thereof.

³³¹(5) Notwithstanding anything contained in this section, in case of person who is liable to be registered under clause (25) of section 2 based on tax withheld under section 236G of Income Tax Ordinance, 2001 (XLIX of 2001) and does not furnish a return upon notice, an officer of inland revenue may assess sales tax liability on the value addition on reasonable grounds including information obtained from the purchase data under section 236G of Income Tax Ordinance, 2001 (XLIX of 2001).

11E. Assessment of tax and recovery of tax not levied or short levied or erroneously refunded…………………………………………….48.
levied or erroneously refunded.- 316(1) Where due to any reason, any tax or charge has not been levied or short levied or where the officer of Inland Revenue not below the rank of Assistant Commissioner suspects on the basis of audit or otherwise that due to any reason a person has-

(a) not paid or short paid due sales tax;

(b) claimed input tax credit or refund which is not admissible; or

(c) has obtained an amount of refund not due, the officer of Inland Revenue after issuing a show cause notice to the person shall pass an order to determine and recover the amount of tax unpaid or short paid, inadmissible input tax or refund, or unlawful refund obtained and shall also impose penalty and default surcharge in accordance with sections 33 and 34:

Provided that this section shall not be applicable to the extent of proceedings initiated under section 37A of the Act.

(2) For the purposes of sub-section (1), the officer of Inland Revenue may also disallow input tax on goods or services if the taxpayer is unable, without reasonable cause, to provide a receipt, or invoice or other record or evidence of the transaction or circumstances giving rise to such claim.

(3) Where a tax or charge has not been levied under clause (a) of sub-section (1), the amount of tax shall be recovered as tax fraction of the value of supply.

11F. Failure to withhold sales tax.
Where any person, required to withhold sales tax under sub-section (7) of section 3, fails to withhold the tax or having withheld the tax fails to deposit the same in the prescribed manner, the officer of Inland Revenue not below the rank of Assistant Commissioner shall after a notice to such person to show cause pass an order to determine and recover the amount in default and impose penalty and default surcharge under section 33 and 34.

11G. Limitation for assessment.
(1) The show cause notice under sections 11D to 11F shall be issued within five years, from the end of the financial year in which the relevant date falls.

(2) An order under sections 11D, 11E and 11F shall be made within one hundred and ³³³[eighty days]³³³ of issuance of show cause notice or within such extended period as the Commissioner may, for reasons to be recorded, in writing specify,

Provided that such extended period shall in no case exceed from ninety days:

Provided that any period during which the proceedings are adjourned on account of a stay order or Alternative Dispute Resolution proceedings or the time taken through adjournment by the registered person not exceeding sixty days shall be excluded from the computation of the period specified in this sub-section.

(3) For the purpose of sections 11D, 11E and 11F, the words “relevant date” means—

(a) the time of payment of sales tax or charge as provided under section 6;

(b) the time of payment for goods or services on which sales tax was to be withheld under sub-section (7) of section 3; and

(c) in a case where sales tax or charge has been erroneously refunded, the date of its refund.]

³³⁴[11H. Faceless audit and assessment.
– (1) Notwithstanding anything to the contrary contained in any other provision of this Act, any audit under sections 25 and 72B, any order made under section 11E, and rectification under section 57 with respect to the cases referred to in sub-section (2), may be made in a faceless manner as may be prescribed by the Board from time to time.

(2) The faceless assessment under sub-section (1) shall be made in respect of such persons or class of persons, or incomes or class of incomes, or cases or class of cases, as may be specified by the Board.

(3) The provisions of section 25 shall apply to the audit conducted in a faceless manner under this section:

Provided that where opportunity of being heard is to be provided to the taxpayer during the course of this audit or a statement under oath is required to be obtained from a taxpayer or any other person under section 37 of this Act, the same shall be done through E-hearing:

Provided further that the identity of the officer, including facial and voice identity, conducting such E-hearing shall be kept confidential.]³³⁴

³³⁵[12. [Omitted].]³³⁵

³³⁶[13. Exemption.
– (1) Notwithstanding the provisions of section 3, supply of goods or import of goods specified in the Sixth Schedule shall, subject to such conditions as may be specified by the ³³⁷[Federal Government]³³⁷, be exempt from tax under this Act ³³⁸[.]³³⁸

³³⁹[***]³³⁹

(2) Notwithstanding the provisions of sub-section (1) –

³⁴⁰[(a) the Federal Government may, whenever circumstances exist to take immediate action for the purposes of national security, natural disaster, national food security in emergency situations and implementation of bilateral and multilateral agreements, by notification in the official Gazette, exempt any supplies made or imports, of any goods or class of goods from the whole or any part of the tax chargeable under this Act, subject to the conditions and limitations specified therein;]³⁴⁰

³⁴¹[(b) ***]³⁴¹

(3) The exemption from tax chargeable under sub-section (2) may be allowed from any previous date specified in the notification issued under clause (a) ³⁴²[***]³⁴².]³³⁶

³⁴³[(4) ***]³⁴³

³⁴⁴[(5) ***]³⁴⁴

³⁴⁵[(6) The ³⁴⁶[Board]³⁴⁶ shall place before the National Assembly all notifications issued under this section in a financial year.

(7) Any notification issued under sub-section (2), after 1st July, 2015 shall, if not earlier rescinded, stand rescinded on the expiry of the financial year in which it was issued ³⁴⁷[:

Provided that all such notifications, except those earlier rescinded, shall be deemed to have been in force with effect from the 1st July, 2016 and shall continue to be in force till the 30th June, 2018, if not earlier rescinded:

Provided further that all notifications issued on or after the first day of July, 2016 and placed before the National Assembly as required under sub-section (6) shall continue to be in force till thirtieth day of June, 2018, if not earlier rescinded by the Federal Government or the National Assembly.]³⁴⁷

CHAPTER III
REGISTRATION

³⁴⁸[14. Registration.
(1) Every person engaged in making taxable supplies in Pakistan, including zero-rated supplies, in the course or furtherance of any taxable activity carried on by him, falling in any of the following categories, if not already registered, is required to be registered under this Act, namely:-

(a) a manufacturer who is not running a cottage industry;

(b) a retailer who is liable to pay sales tax under the Act or rules made thereunder, excluding such retailer required to pay sales tax through his electricity bill under sub-section (9) of section 3;

(c) an importer;

(d) an exporter who intends to obtain sales tax refund against his zero-rated supplies;

(e) a wholesaler, dealer or distributor; and

(f) a person who is required, under any other Federal law or Provincial law, to be registered for the purpose of any duty or tax collected or paid as if it were a levy of sales tax to be collected under the Act.

³⁴⁹(1A) Every person including a non-resident person except who is running a cottage industry and the retailers who are required to pay sales tax through electricity bills under sub-section (9) of section 3, selling digitally ordered goods from within Pakistan through online marketplace, website or software application as the case may be, shall apply in the prescribed form and in the prescribed manner for registration.

(1B) Every online marketplace or a courier, involved in e-commerce by supplying digitally ordered goods from within Pakistan shall not allow any person to use their services to carry out e-commerce transactions unless it holds NTN and in case sub-section (1A) of this section applies also holds sales tax registration.

(2) Persons not engaged in making of taxable supplies in Pakistan, if required to be registered for making imports or exports, or under any provisions of the Act, or any other Federal law, may apply for registration.

³⁵⁰(2A) If a person, who is required to be registered under the Act, does not apply for registration and the Commissioner Inland Revenue or any other officer, as may be authorized by the Board, after such inquiry as deemed appropriate, having reason to believe that a person is liable to register, he shall compulsorily register such person after providing an opportunity of being heard.

(3) The registration under this Act shall be regulated in such manner as the Board may, by notification in the official Gazette, prescribe.]³⁴⁸

³⁵¹[14A. [Repealed].]³⁵¹
]

³⁵²[14AB. Discontinuance of gas and electricity connections.
– Notwithstanding anything contained in this Act or any other law for the time being in force, the Board shall have power through Sales Tax General Order to direct the gas and electricity distribution companies for discontinuing the gas and electricity connections of any person who fall in the following categories, namely:–

(a) Any person, including tier-1 retailers, who fail to register for sales tax purpose or

(b) Notified tier-1 retailers registered but not integrated with the Board’s Computerized System:

Provided that upon registration or integration, as the case may be, of the above said persons, the Board shall notify the restoration of their gas or electricity connection through Sales Tax General Order.]³⁵²

³⁵³ 14AC. Bar on operations of Bank Accounts.
– (1) This section shall apply–

(a) where the Commissioner has reasons to believe that a person is engaged in supply of taxable goods without having registration under this Act;

(b) the Commissioner has provided three consecutive opportunities of being heard to the person to obtain registration under this Act; and

(c) the person has failed to obtain registration.

(2) Notwithstanding anything contained in this Act or any other law for the time being in force, the Commissioner shall have the powers to direct banking companies, scheduled banks and other financial institutions, through an order in writing, to intermittently suspend operation of the bank account of such a person for three working days.

(3) The Commissioner shall repeat suspension specified in sub-section (2), for two more times with an interval of one week between the suspensions.

(4) The Commissioner shall direct the banking companies, scheduled banks and other financial institutions, through an order in writing to permanently bar operation of the bank accounts of the person.

(5) Upon registration of such person, the Commissioner shall issue and convey order for removal of bar on operation of his bank accounts not later than two working days.

(6) Any person, aggrieved by any decision or order passed under this section, may within thirty days of the date of receipt of such decision or order prefer an appeal before the Chief Commissioner Inland Revenue.

(7) The provisions of this section shall come into force on such date as the Board may notify in the official Gazette.

14AD. Bar on transfer of Immoveable Property.
(1) Where the person fails to obtain registration within fifteen days from issuance of order under sub-section (4) of section 14AC, the Chief Commissioner shall constitute a committee comprising the Chief Commissioner, Commissioner and one member from the Chamber of Commerce or a Trade Associations, as the case may be.

(2) The committee shall issue a notice to such unregistered person which shall also be prominently displayed at the business premises of the person.

(3) The committee after affording a personal hearing to the person shall either recommend for imposition of bar on transfer of immovable property or recommend the Commissioner to remove the bar imposed under section 14AC.

(4) For imposition of bar on transfer of immovable property, the Committee shall recommend the Commissioner for imposition of bar on transfer of immovable property:

Provided that the Committee shall provide an opportunity to obtain registration within fifteen days prior to the recommendation.

(5) The Commissioner shall have the powers to direct the property registering authority, through an order in writing, to bar transfer of immoveable property of any person who fails to obtain registration after lapse of fifteen days.

(6) Upon registration of such person, the Commissioner shall issue and convey order for removal of bar on transfer of immovable property not later than two working days.

(7) Any person, aggrieved by the decision or order passed may, within thirty days of the date of receipt of such decision or order prefer an appeal before the Chief Commissioner Inland Revenue.

(8) The provisions of this section shall come into force on such date as may be notified by the Board.

14AE. Other measures for non-registration.
– (1) Subject to prior action under section 14AC and 14AD, any person who fails to get registered for the purposes of this Act, the Chief Commissioner shall have the powers to--

(a) seal the business premises;

(b) seize moveable property; or

(c) appoint a receiver for the management of the taxable activity of a person.

(2) Action under sub-section (1) shall not be carried out, unless-

(a) a public notice is issued specifying the date from which the premises shall be sealed, or movable property is seized, or a receiver is appointed for the management of the taxable activity;

(b) a committee comprising the Chief Commissioner, the Commissioner concerned and a representative from the Chambers of Commerce or Trade Associations, provides an opportunity of being heard to the person through an open court; and

(c) such decision is made public by placement on the Board’s website and newspaper as well.

(3) Upon registration, of such person the Chief Commissioner shall reverse the order issued under sub-section (1) not later than two working days.

(4) Any person, aggrieved by any decision or order passed under sub-section (1), may within thirty days of the date of receipt of such decision or order, prefer representation before the Board.

(5) All or any of the provisions of this section shall come into force on such date as the Board may notify in the official Gazette.

³⁵⁴[15. [Omitted].]³⁵⁴

³⁵⁵[16. [Omitted].]³⁵⁵

³⁵⁶[17. [Omitted].]³⁵⁶

18. [Omitted].

19. [Omitted].

20. [Omitted].

³⁵⁷[21. De-registration, blacklisting and suspension of registration….. …56.
registration.– (1) The Board or any officer, authorized in this behalf, may subject to the rules, de-register a registered person or such class of registered persons not required to be registered under this Act.

(2) Notwithstanding anything contained in this Act, in cases where the ³⁵⁸[Commissioner]³⁵⁸ is satisfied that a registered person is found to have issued fake invoices ³⁵⁹[, has committed non-compliance of sub-sections (5) and (6) of section 23 or section 40C]^{359 360}[...]³⁶⁰ or has ³⁶¹[otherwise]³⁶¹ committed tax fraud, he may ³⁶²[issue an order of suspension and blacklisting]³⁶² such person or suspend his registration in accordance with such procedure as the Board may by notification in the official Gazette, prescribe.]³⁵⁷

³⁶³(2A) The Commissioner shall, within ten days of issuance of order of suspension, issue a show cause notice to the registered person. Upon receipt of the reply to the notice and after giving an opportunity of hearing to the registered person, if the Commissioner is satisfied, he may order for revoking of suspension of the registered person or issue an appealable speaking order for blacklisting of the registered person within thirty days of receipt of the reply to the notice.

³⁶⁴[(3) During the period of suspension of registration, the invoices issued by such person shall not be entertained for the purposes of sales Tax refund or input tax credit, and once such person is black listed, the refund or input tax credit claimed against the invoices issued by him, whether prior or after such black listing, shall ³⁶⁵[...]³⁶⁵ be rejected through a self-speaking appealable order and after affording an opportunity of being heard to such person.]³⁶⁴

³⁶⁶[(4) Notwithstanding anything contained in this Act, where the Board, the concerned Commissioner or any officer authorized by the Board in this behalf has reasons to believe that a registered person is engaged in issuing fake or flying invoices, claiming fraudulent input tax or refunds, does not physically exist or conduct actual business, or is committing any other fraudulent activity, the Board, concerned Commissioner or such Officer may after recording reasons in writing, block the refunds or input tax adjustments of such person and direct the concerned Commissioner having jurisdiction for further investigation and appropriate legal action.]³⁶⁶

(5) 351 [….] omitted

³⁶⁸[21A. Active taxpayers list.
The Board shall have the power to maintain active taxpayers list in the manner as may be prescribed by rules and such rules may provide for the restrictions and limitations to be imposed on a person who ceases to be an active taxpayer.]³⁶⁸

CHAPTER IV
BOOK KEEPING AND INVOICING
REQUIREMENTS

³⁶⁹[22. Records.
– (1) A registered person making taxable supplies shall maintain and keep at his business premises or registered office in English or Urdu language the following records of goods purchased ³⁷⁰[, imported]³⁷⁰ and supplied (including zero-rated and exempt supplies) made by him or by his agent acting on his behalf in such form and manner as would permit ready ascertainment of his tax liability during a tax period –

(a) records of supplies made shall indicate the description, quantity and value of goods, name and address of the person to whom supplies were made and the amount of the tax charged;

(b) records of goods purchased shall show the description, quantity and value of goods, name, address and registration number of the supplier and the amount of the tax on purchases;

³⁷¹[(c) records of goods imported shall show the description, quantity and value of goods and the amount of tax paid on imports;]³⁷¹

³⁷²[(d)]³⁷² records of zero-rated and exempt supplies;

³⁷³[(da) double entry sales tax accounts;]³⁷³

³⁷⁴[(e)]³⁷⁴ invoices, credit notes, debit notes, bank statements, ³⁷⁵[banking instruments in terms of section 73,]³⁷⁵ inventory records, ³⁷⁶[utility bills, salary and labour bills, ³⁷⁷[cash book,]³⁷⁷ rental agreements, sale purchase agreements and lease agreements]³⁷⁶; ³⁷⁸[...]³⁷⁸

³⁷⁹[(ea) Record relating to Gate passes, inward or outward and transport receipts.]^{379 380}[(eb) Electronic version of records mentioned in clauses (a) to (ea) of this sub-section.]³⁸⁰

³⁸¹[(f)]³⁸¹ such other records as may be specified by the Board:

³⁸²[Provided that the persons paying ³⁸³[...]³⁸³ retail tax shall keep such record as may be specified by the Board.]³⁸²

³⁸⁴[(1A) Notwithstanding anything in any other law for the time being in force, the Board may require, by notification in the official Gazette, a registered person or class of registered persons to declare and use only as many number of business bank accounts as may be specified by the Board in such notification to make or receive payments on account of purchase and sale transactions for the purpose of this Act or rules made thereunder and to make payment of due tax from such accounts only.]³⁸⁴

(2) The Board may, by notification in the official Gazette, specify for any class of taxable persons or any other person registered under this Act to keep such other records for the purposes of this Act.

³⁸⁵[(2A) The Board may, by notification in the Official Gazette, specify for any class of taxable persons registered under this Act to use such electronic fiscal cash registers as are approved by the Board in the manner as may be prescribed.]³⁸⁵

³⁸⁶[(3) The Board may, by notification in the official gazette, prescribe the procedure or software for electronically maintenance of records, filing of sales tax returns or refunds and for any other matter or approve any software for electronic maintenance of records and filing of returns or refunds by a person or class of such persons.]³⁸⁶]³⁶⁹

³⁸⁷[(4) The registered persons, whose accounts are subject to audit under the Companies Ordinance, 1984 (XLVII of 1984), shall be required to submit a copy of the annual audited accounts, along with a certificate by the auditors certifying the payment of due tax by the registered person.]³⁸⁷

23. Tax Invoices.– (1) A registered person making a taxable ³⁸⁸[as.
– (1) A registered person making a taxable ³⁸⁸[as well as exempt supply shall issue a tax invoice including an advance receipt invoice, bearing a verifiable and unique FBR invoice number]³⁸⁸ supply shall issue a serially numbered tax invoice at the time of supply of goods containing the following particulars ³⁸⁹[, in Urdu or English language,]³⁸⁹ namely: –

(a) name, address and registration number of the supplier;

[374(b) name, address and registration number of the recipient and in case of supplies by manufacturer or importer to unregistered distributor, the NIC or NTN of such unregistered distributors, as the case may.]

Explanation. – For the purpose of this clause, ordinary consumer means a person who is buying the goods for his own consumption and not for the purpose of re-sale or processing:

³⁹¹[Provided that the Board may notify any person or class of persons who may be allowed to issue an advance receipt invoice within the notified system:

Provided further that the condition of a verifiable and unique FBR invoice number shall be applicable from the time as notified by the Board.]³⁹¹

(c) date of issue of invoice;

(d) description ³⁹²[including count, denier and construction in case of textile yarn and fabric,]³⁹² and quantity of goods;

(e) value exclusive of tax;

(f) amount of sales tax; and

³⁹³[(ff) ***]³⁹³

(g) value inclusive of tax:

Provided that the Board may, by notification in the official Gazette, specify such modified invoices ³⁹⁴[...]³⁹⁴ for different persons or classes of persons;

Provided further that not more than one tax invoice shall be issued for a taxable supply ³⁹⁵[.]³⁹⁵

³⁹⁶

Provided also that where any goods are transported or supplied, the registered person shall ensure the generation and linkage of the tax invoice with the e-Bilty generated under section 40C of this Act and section 83C of the Customs Act, 1969.

³⁹⁷[***]³⁹⁷

³⁹⁸[(2) No person other than a registered person or a person paying ³⁹⁹[*** ⁴⁰⁰[***]⁴⁰⁰]³⁹⁹⁴⁰¹[retail tax]⁴⁰¹ shall issue an invoice under this section.

⁴⁰²[(3) A registered person making a taxable supply shall, subject to such conditions, restrictions and limitations as the Board may, by notification in the official Gazette, specify to issue electronic invoices.]⁴⁰²

⁴⁰³[(4) The Board may, by notification in the Official Gazette, prescribe the manner and procedure for regulating the issuance and authentication of tax invoices.]⁴⁰³

⁴⁰⁴(5) The Board through notification in the official Gazette, may require any person or class of persons to integrate their electronic invoicing system with the Board’s Computerized System for real time reporting of sales in such mode and manner and from such date as may be specified therein.

(6) Licensed integrator shall integrate electronic invoicing system of registered persons referred to in sub-section (5) in such mode and manner as may be prescribed:

Provided that from such date, and in such mode and manner, as prescribed by the Board, all Tier-1 retailers shall integrate their retail outlets with Board’s computerized system for real-time reporting of sales.

⁴⁰⁵[24. Retention of record and documents for ⁴⁰⁶[Six]⁴⁰⁶ years.– A.
person, who is required to maintain any record or documents under this Act, shall retain the record and documents for a period of 352[Six] years after the end of the tax period to which such record or documents relate ⁴⁰⁷[or till such further period the final decision in any proceedings including proceedings for assessment, appeal, revision, reference, petition and any proceedings before an alternative Dispute Resolution Committee is finalized]⁴⁰⁷.]⁴⁰⁵

⁴⁰⁸[25. Audit of sales tax affairs.
– (1) The Commissioner on the basis of reasons to be recorded in writing, may direct the officer of Inland Revenue not below the rank of Assistant Commissioner to conduct audit of sales tax affairs of any registered person and issue a notice to such registered person intimating him regarding audit of sales tax affairs.

Explanation.- For the removal of doubt, it is declared that the powers of the Commissioner to direct conduct of audit and to issue a notice under this sub-section are independent of the powers of the Board under section 72B and nothing contained in section 72B restricts the powers of the Commissioner to direct conduct of audit and to issue notice under this sub-section.

(2) The Commissioner shall communicate the reasons referred to in sub-section (1) to the registered person whose audit is to be conducted through the notice under sub-section (1).

Explanation.- For the removal of doubt, it is declared that the Commissioner may not provide an opportunity of hearing before issuance of notice under sub-section (1).

(3) The reasons referred to in sub-section (1) shall be based on scrutiny of the available records including sales tax and federal excise returns, income tax returns and withholding statements, financial statements or third party information:

Provided that the reasons shall not include the mere verification of input tax, output tax, refund claim and compliance of legal provisions without identifying risk factors that require such verification.

(4) Subsequent to the issuance of notice under sub-section (1), the officer of Inland Revenue, may call for any record or documents including record maintained under this Act, the rules made thereunder or any other law for the time being in force for conducting audit of the sales tax affairs of the person. Where such record or documents have been kept on electronic data, the registered person shall allow authorize officer of Inland Revenue access to the use of machine and software on which such data is kept and the officer of Inland Revenue may obtain duly attested hard copies of such information or data from the registered person:

Provided that the officer of Inland Revenue shall not call for record or documents of the registered person after expiry of six years from the end of the financial year to which they relate.

(5) The officer of Inland Revenue may require the registered person to attend his office in person or through an authorized representative. The registered person shall produce such accounts, documents or any evidence as the officer of Inland Revenue may consider necessary.

(6) The officer of Inland Revenue not below the rank of Assistant Commissioner may conduct or cause to be conducted such enquiry and obtain such information from any third party as he considers appropriate.

(7) The officer of Inland Revenue not below the rank of Assistant Commissioner shall conduct audit of the sales tax affairs to verify the correctness or otherwise of the declared tax liability, output tax, input tax claimed, tax paid, refund claimed, stocks consumed or available for ascertaining compliance or otherwise with the provisions of this Act and the rules made thereunder on the basis of the record and evidence obtained under sub-sections (5) or (6).

(8) The officer of Inland Revenue may conduct audit proceedings electronically through video links, or any other facility as may be prescribed by the Board.

⁴⁰⁹[(8A) If, at any stage of the proceedings before him, the Commissioner having regard to,-

(a) the nature and complexity of the accounts; or

(b) volume of the accounts; or

(c) doubts about the correctness of the accounts; or

(d) multiplicity of transactions in the accounts; or

(e) specialized nature of business activity of the registered person, and in the interest of the revenue, is of the opinion that it is necessary so to do, he may, after giving the registered person a reasonable opportunity of being heard, and with the previous approval of the Chief Commissioner, direct the registered person to get either any or all of the following:-

(i) accounts re-audited by an accountant, and to furnish a report of such audit duly signed and verified by such accountant including answers to the specific queries as the Commissioner may require; or

(ii) inventory re-valued by a cost accountant, and to furnish a report of such inventory valuation duly signed and verified by such cost accountant including answers to the specific queries as the Officer of Inland Revenue may require;

Explanation:- The accountant or the cost accountant, as referred to in this sub-section, shall be nominated by the Commissioner for the purposes of the said sub-section from amongst the panel of such accountants or cost accountants nominated by the Board; and]⁴⁰⁹

⁴¹⁰[(8B) After completion of the audit, the officer of Inland Revenue shall, after obtaining the registered person’s explanation on all the issues raised in the audit, issue an audit report containing audit observations and findings.]⁴¹⁰

(9) After ⁴¹¹[issuing the audit report]⁴¹¹, the officer of Inland Revenue may, if required pass an order under section 11E, after providing an opportunity of being heard to the registered person under sub-section (1) of section 11E.

(10) Notwithstanding anything contained in sub-sections (7) and (9) where a registered person fails to produce before the officer of Inland 75 Revenue, any accounts, documents or records required to be maintained under this Act or the rules made thereunder or any other relevant document electronically kept record, electronic machine or any other evidence that may be required by the officer of Inland Revenue for the purpose of audit. The officer of Inland Revenue may proceed to make best judgment assessment under section 11D of this Act.

(11) Notwithstanding the penalties prescribed in section 33, if a registered person ⁴¹²[deposits]⁴¹² the amount of tax short paid or amount of tax evaded along with default surcharge voluntarily, whenever it comes to his notice, before receipt of notice of audit, no penalty shall be recovered from him:

Provided that if a registered person [deposits] the amount of tax short paid or amount of tax evaded along with default surcharge during the audit, or at any time before issuance of show cause notice under section 11E, he may deposit the evaded amount of tax, default surcharge under section 34, and twenty five percent of the penalty payable under section 33:

Provided further that if a registered [deposits] the amount of tax short paid or amount of tax evaded along with default surcharge after issuance of show cause notice under section 11E, he shall deposit the evaded amount of tax, default surcharge under section 34, and ⁴¹³[fifty percent]⁴¹³ of the penalty payable under section 33 and thereafter, the show cause notice, shall stand abated.]⁴⁰⁸

⁴¹⁴[25A. Drawing of samples.
– Where an authorized officer of ⁴¹⁵[Inland Revenue]⁴¹⁵ considers it necessary to take a sample of any goods or raw materials, for the purpose of determining their liability to sales tax or for the purpose of establishing their value or for any other reason, he may remove a minimum quantity of goods or raw materials sufficient to enable a proper examination or analysis to be made. At the time of taking the sample the person in possession of the goods shall be informed and given the opportunity to sign the representative samples, so drawn, and take a corresponding sample for his record. Any sample taken under this section shall be taken against a proper receipt a copy each of which shall be kept in the record by the registered person and the ⁴¹⁶[Large Taxpayers Unit or Regional Tax Office, as the case may be]⁴¹⁶.]⁴¹⁴

⁴¹⁷[25AA. Transactions between Associates.– 6[(1)] The Commissioner.
or an office of Inland Revenue may, in respect of any transaction between persons who are associates, determine the transfer price of taxable supplies between the persons as is necessary to reflect the fair market value of supplies in an arm’s length transaction.]⁴¹⁷

⁴¹⁸[(2) The Board may, by notification in official gazette, prescribe rules for carrying out the purpose of sub-section (1).]⁴¹⁸

CHAPTER V
RETURNS

⁴¹⁹[26. ⁴²⁰[***]⁴²⁰ Return.– (1) Every registered person ⁴²¹[...]⁴²¹ shall.
furnish not later than the due date a true ⁴²²[, complete]⁴²² and correct return in the prescribed form to a designated bank ⁴²³[or any other office]⁴²³ specified by the Board, indicating the purchases and the supplies made during a tax period, the tax due and paid and such other information, as may be prescribed ⁴²⁴[;]⁴²⁴

⁴²⁵[Provided that the Board may, by notification in the official Gazette, require any person or class of persons to submit return on quarterly basis:

Provided further that the Board may, by notification in the official Gazette, require any person or class of persons to submit such return as may be prescribed annually in addition to the monthly return or quarterly return:

Provided also that the return filed electronically on the web or any magnetic media or any other computer readable media as may be specified by the Board shall also be deemed to be a return for the purpose of sub-section (1) and the Board may, by notification in the official Gazette, make rules for determining eligibility of the data of such returns and e-intermediaries who will digitize the data of such returns and transmit the same electronically under their digital signatures ⁴²⁶[;]⁴²⁶

Provided also that every online marketplace shall furnish not later than the due date a true, complete and correct monthly statement in the prescribed form, indicating the supplier-wise amount paid and tax due and such other information of the taxable supplies of digitally ordered goods irrespective of the economic ownership of the supplies from within Pakistan:

Provided further also that every payment intermediary and courier shall furnish not later than the due date a true, complete and correct monthly statement in the prescribed form, indicating the supplier-wise amount paid and tax due and such other information for taxable supplies of digitally ordered goods from within Pakistan through an online market place, website and software application and delivering goods using its payment platform or courier service as the case may be.

⁴²⁷[...]⁴²⁷

(2) ⁴²⁸[....]⁴²⁸ omitted

⁴²⁹[(2A) The officer of Inland Revenue may, by notice in writing, require any person who, in his opinion, is required to file a return under this section for a tax period or tax periods but who has failed to do so, to furnish the return or returns within fifteen days from the date of service of such notice or such longer or shorter period as may be specified in such notice or as the officer of Inland Revenue may allow:

Provided that the notice under this sub-section shall only be issued within fifteen years from the end of the financial year in which the return was to be filed, in cases of tax fraud and five years in all other cases.]⁴²⁹

⁴³⁰[(3) A registered person may, subject to approval of the ⁴³¹[Commissioner Inland Revenue]⁴³¹ having jurisdiction, file a revised return within ⁴³²[one hundred and twenty]⁴³² days of the filing of return under sub-section (1) or, as the case may be, sub-section (2), ⁴³³[ or under clause (a) or clause (b) of section 27]⁴³³, to correct any omission or wrong declaration made therein ⁴³⁴[.]⁴³⁴ [omitted]

⁴³⁵(3A) Unless restricted by the compliance risk management system of the Board, the approval under sub-section (3), shall not be required if revised return is filed within sixty days of filing of return and the tax payable therein is more than the amount paid or the refund claimed therein is less than the amount as claimed, under the return sought to be revised.

⁴³⁶[(4) Notwithstanding the penalties prescribed in section 33, if a registered person wishes to file revised return voluntarily along with deposit of the amount of tax short paid or amount of tax evaded along with ⁴³⁷[default surcharge]⁴³⁷, whenever it comes to his notice, before receipt of notice of audit, no penalty shall be recovered from him:

Provided that in case the registered person wishes to deposit the amount of tax as pointed out by the officer of ⁴³⁸[Inland Revenue]⁴³⁸ during the audit, or at any time before issuance of the show cause notice ⁴³⁹[...]⁴³⁹, he may deposit the evaded amount of tax, [default surcharge] under section

(34), and twenty five percent of the penalty payable under section 33 along with the levied return:

Provided further that in case the registered person wishes to deposit the amount after issuance of show cause notice, he shall deposit the evaded amount of sales tax ⁴⁴⁰[...]⁴⁴⁰,⁴⁴¹[default surcharge]⁴⁴¹ under section 34, and full amount of leviable penalty under section 33 along with the revised return and thereafter, the show cause notice, shall stands abated.]⁴³⁶

⁴⁴²[(5) The Board may, by notification in the official Gazette, require any person or class of persons, for any goods of such description or class, to furnish such summary or details or particulars pertaining to the imports, purchases and supplies during any tax period or periods, in such format as may be specified.]⁴⁴²

⁴⁴³[26A. [Omitted].]⁴⁴³

⁴⁴⁴[26AA. [Omitted].]⁴⁴⁴

⁴⁴⁵[26AB. Extension of time for furnishing returns.
(1) A registered person required to furnish a return under section 26 may apply, in writing, to the Commissioner for an extension of time to furnish the return.

(2) An application under sub-section (1) shall be made by the due date for furnishing the return in terms of section 2(9) for the period to which the application relates.

(3) Where an application has been made under sub-section (1) and the Commissioner is satisfied that the applicant is unable to furnish the return to which the application relates by the due date because of–

(a) absence from Pakistan;

(b) sickness or other misadventure; or

(c) any other reasonable cause, the Commissioner may, by order in writing, grant the applicant an extension of time for furnishing the return.

(4) An extension of time under sub-section (3) shall not exceed fifteen days from the due date for furnishing the return, unless there are exceptional circumstances justifying a longer extension of time:

Provided that where the Commissioner has not granted extension for furnishing the return under sub-sections (3) or (4), the Chief Commissioner may on an application made by the registered person 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.

(5) An extension or further extension of time granted under sub-sections (3) or (4), as the case may be, shall not, for the purpose of charge of default surcharge under section 34, change the due date for payment of sales tax under section 6.]⁴⁴⁵

⁴⁴⁶[27. Special Returns.
– In addition to the return specified under section 26 –

(a) a person registered ⁴⁴⁷[ ⁴⁴⁸[ ]⁴⁴⁸ under this Act]⁴⁴⁷ shall furnish special return within such date and in such form indicating information such as quantity manufactured or produced, purchases made, goods supplied or payment of arrears made, etc, for such period as the Board may, by a notification in official gazette, specify; and

(b) the ⁴⁴⁹[commissioner]⁴⁴⁹ may require any person whether, registered or not, to furnish a return (whether on his own behalf or as an agent or trustee) in a prescribed form and such person shall furnish the return not later than the date specified in this regard.]⁴⁴⁶

⁴⁵⁰[28. Final Return.
– If a person applies for de-registration in terms of section 21, he shall before such de-registration, furnish a final return to the ⁴⁵¹[commissioner]⁴⁵¹ in the specified form in such manner and at such time as directed by the ⁴⁵²[commissioner]⁴⁵²]⁴⁵⁰.

29. Return deemed to have been made.
– A return purporting to be made on behalf of a person ⁴⁵³[by his duly appointed representative]⁴⁵³ shall, for all purposes, be deemed to have been made by such person or under his authority unless proved to the contrary.

CHAPTER VI
APPOINTMENT OF ⁴⁵⁴[OFFICERS OF SALES TAX]⁴⁵⁴ &
THEIR POWERS

⁴⁵⁵[30. Appointment of Authorities.
– (1) For the purposes of this Act, the Board may, appoint in relation to any area, person or class of persons, any person to be –

(a) a chief commissioner of Inland Revenue;

(b) a commissioner of Inland Revenue;

(c) a commissioner of Inland Revenue (Appeals);

(d) an Additional commissioner of Inland Revenue;

(e) a Deputy commissioner of Inland Revenue;

⁴⁵⁶[(ea) District Taxation Officer Inland Revenue;]⁴⁵⁶

(f) an Assistant commissioner of Inland Revenue;

⁴⁵⁷[(fa) Assistant Director Audit Inland Revenue;]⁴⁵⁷

(g) an Inland Revenue Officer;

(h) a Superintendent Inland Revenue;

(i) an Inland Revenue Auditor Officer ⁴⁵⁸[...]⁴⁵⁸;

⁴⁵⁹[(ia) an inspector Inland Revenue; and]⁴⁵⁹

(j)an officer of Inland Revenue with any other designation.

(2) The Chief Commissioner Inland Revenue and Commissioner Inland Revenue (Appeals) shall be sub-ordinate to the Board and Commissioner Inland Revenue shall be sub-ordinate to the Chief Commissioner Inland Revenue.

⁴⁶⁰[(2A) The Chief Commissioners Inland Revenue shall perform their functions in respect of such persons or classes of persons or such areas as the Board may direct.

5(2B) The Commissioners Inland Revenue shall perform their functions in respect of such persons or classes of persons or such areas as the Chief Commissioner, to whom they are sub-ordinate, may direct.]⁴⁶⁰

(3) Additional Commissioner Inland Revenue, Deputy Commissioners Inland Revenue ⁴⁶¹[, District Taxation Officer Inland Revenue]⁴⁶¹, Assistant Commissioner Inland Revenue 6[, Assistant Director Audit Inland Revenue], Superintendent Inland Revenue, Inland Revenue Audit Officer, Inland Revenue Officer ⁴⁶²[, Inspector Inland Revenue]⁴⁶², and officer of Inland Revenue with any other designation shall be sub-ordinate to the Commissioner Inland Revenue and shall perform their functions in respect of such persons or classes of persons or such areas as the Commissioners, to whom they are sub ordinate, may direct.

(4) Deputy Commissioner Inland Revenue ⁴⁶³[, District Taxation Officer Inland Revenue]⁴⁶³, Assistant Commissioner Inland Revenue 1[, Assistant Director Audit Inland Revenue], Superintendent Inland Revenue, Inland Revenue Audit Officer, Inland revenue Officer, ⁴⁶⁴[Inspector Inland Revenue Officer]⁴⁶⁴ an officer of Inland Revenue with any other designation shall be sub-ordinate to the Additional Commissioner Inland Revenue.]⁴⁵⁵

⁴⁶⁵[30A. Directorate General, (Intelligence and Investigation) Inland.
Inland Revenue.–(1) The Directorate General (Intelligence and Investigation) Inland Revenue 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, ⁴⁶⁶[appoint]⁴⁶⁶.

(2) The Board may, by notification in the official Gazette,–

(a) specify the functions and jurisdiction of the Directorate General and its officers; and

(b) confer the powers of authorities specified in section 30 upon the Directorate General and its officers.]⁴⁶⁵

⁴⁶⁷[30AA. Faceless jurisdiction.
– (1) Notwithstanding anything contained in this Act, the Inland Revenue tax authorities appointed in the National faceless center shall perform all or such functions, and exercise all or such powers under this Act as may be assigned to them in respect of such persons, or classes of persons, for such tax periods of a person through algorithms developed by the Board.

(2) The jurisdiction so assigned may be exclusive or concurrent.

(3) The Board may transfer jurisdictions in respect of persons or classes of persons, for a specific tax period, for which the jurisdiction has already been assigned under this section, from the National faceless center to the officer of Inland Revenue having jurisdiction under section 30 of this Act, on the recommendation of the Chief Commissioner or on its own accord.

(4) The Chief Commissioner appointed in the National faceless center may request the Board to direct the officer of Inland Revenue having jurisdiction under section 30 or any other Authority under this Act, as it may deem fit, to conduct physical verification including nature and size of the business, assets, investments, expenditures, and any other information or verification required by the Chief Commissioner for conducting any proceedings assigned to the National faceless centre:

Provided that the Board may exercise its power of allocation of verification through an algorithm-based system.

(5) Notwithstanding anything contained in any law for the time being in force, the identity of the authority exercising jurisdiction in the National faceless centre shall be kept confidential from the registered person, the authorized representative of the registered person, and any unauthorized person.

(6) No notice, order, or other communication by an authority appointed at the National faceless centre shall be called in question or set aside merely on the ground that such authority did not have jurisdiction over the taxpayer under section 30 of this Act, or lack of notified delegation of power under section 32 of this Act, or because of the fact that identity of the authority has been kept confidential from the taxpayer as per sub-section (5).]⁴⁶⁷

⁴⁶⁸[30AB. Tax Fraud Investigation Wing Inland Revenue.
– (1) There shall be established a wing to be known as Tax Fraud Investigation Wing-Inland Revenue.

(2) The functions of the tax fraud Investigation Wing Inland Revenue shall be to detect, analyze, investigate, combat and prevent tax fraud.

(3) The tax fraud Investigation Wing Inland Revenue shall comprise Fraud Intelligence and Analysis Unit, Fraud Investigation Unit, Legal Unit, Accountants Unit, Digital Forensic and Scene of Crime Unit, Administrative Unit or any other Unit as may be notified by the Board through notification in the official Gazette.

(4) The tax fraud Investigation Wing Inland Revenue shall consist of a Chief Investigator and as many following officers, as may be notified by the Board-

(a) Senior investigators, investigators, Junior investigators or any other officer of Inland Revenue with any other designation;

(b) a Senior Forensic Analyst and as many Forensic Analysts and Junior Forensic Analysts; and

(c) a Senior Data Analyst and as many Data Analysts and Junior Data Analysts.

(5) The Board may, by notification in the official Gazette, --

(a) specify the functions and jurisdiction of the Tax Fraud Investigation Wing Inland Revenue and its Units and its officers; and

(b) confer the powers of authorities specified in section 30 upon the tax fraud Investigation Wing Inland Revenue and its officers at clause (a) of sub-section 4.

(6) Nothing contained in this section shall prevent the authorities appointed under section 30 or any other authority or officer conferred with the power and functions of authorities appointed under section 30 from conducting investigation and prosecution proceedings under Chapter-VII of the Act.]⁴⁶⁸

⁴⁶⁹[30B. Directorate General ⁴⁷⁰[...]⁴⁷⁰ Internal Audit.– The Directorate.
General 2[...] Internal Audit 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.

⁴⁷¹[30C. ⁴⁷²[Inland Revenue Services Academy]⁴⁷².
The ⁴⁷³[Inland Revenue Services Academy]⁴⁷³ 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.

⁴⁷⁴[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.]⁴⁷⁴

⁴⁷⁵[30D. Directorate General of Valuation ⁴⁷⁶[...]⁴⁷⁶.
⁴⁷⁶[...]⁴⁷⁶.--The Directorate General of Valuation 5[...] 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.

⁴⁷⁷[30DD. Directorate of Post Clearance Audit.
– The Directorate of Post clearance Audit shall consist of a Director and as many Additional Directors, Deputy Directors, Assistant Directors and such other officers as the Board may, by notification in the official Gazette, appoint.]⁴⁷⁷

⁴⁷⁸[30DDD. Directorate General of Input Output Co-efficient Organization.75.
Organization.- The Directorate General of Input Output Coefficient Organization (IOCO)-Inland Revenue 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.]⁴⁷⁸

⁴⁷⁹[30DDDA. Directorate-General of law.
(1) The Directorate-General of law shall consist of a Director General and as many Directors, Additional Directors, Deputy Directors, Assistant Directors, Law Officers 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 law.]⁴⁷⁹

⁴⁸⁰[30DDDB. Directorate General (Field Compliance) Inland Revenue ……76.
Revenue.- (1) The Directorate General (Field Compliance) Inland Revenue 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,-

(a) specify the functions and jurisdiction of the Directorate General and its officers; and

(b) confer the powers of authorities specified in section 30 upon the Directorate General and its officers.]⁴⁸⁰

⁴⁸¹[30E. Powers and Functions of Directorate etc.
by notification in the official Gazette, specify the functions, jurisdiction and powers of the Directorates General as specified in the preceding sections and their officers by notification in the official Gazette.]⁴⁸¹

31. Powers.– An officer of ⁴⁸²[Inland Revenue]⁴⁸² appointed under.
– An officer of ⁴⁸²[Inland Revenue]⁴⁸² appointed under section 30 shall exercise such powers and discharge such duties as are conferred or imposed on him under this Act; and he shall also be competent to exercise all powers and discharge all duties conferred or imposed upon any officer subordinate to him:

Provided that, notwithstanding anything contained in this Act or the rules, the Board may, by general or special order, impose such limitations or conditions on the exercise of such powers and discharge of such duties as it deems fit.

⁴⁸³[32. Delegation of powers.– ⁴⁸⁴[(1) The Board or the Chief.
– ⁴⁸⁴[(1) The Board or the Chief Commissioner, with the approval of the Board, may, by an order and subject to such limitations or conditions as may be specified therein, empower by name or designation –

[(a) any Additional Commissioner Inland Revenue or Deputy Commissioner Inland Revenue to exercise any of the powers of a Commissioner Inland Revenue under this Act; and

(b) any Deputy Commissioner Inland Revenue or Assistant Commissioner Inland Revenue to exercise any of the powers of an Additional Commissioner Inland Revenue under this Act;

(c) any Assistant Commissioner Inland Revenue to exercise any of the powers of a Deputy Commissioner Inland Revenue under this Act; and

(d) any other officer of Inland Revenue to exercise any of the powers of an Assistant Commissioner Inland Revenue under this Act.]

⁴⁸⁵[(2) ***]⁴⁸⁵

(3) The officer to whom any powers are delegated under this section shall not further delegate such powers.]⁴⁸⁴

⁴⁸⁶[32A. ⁴⁸⁷[Audit by Special Audit Panels]⁴⁸⁷.
⁴⁸⁸[(1) The Board may appoint as many special audit panels as may be necessary, comprising two or more members from the following, –

(a) an officer or officers of Inland Revenue;

(b) a firm of chartered accountants as defined under the Chartered Accountants Ordinance, 1961 (X of 1961);

(c) a firm of cost and management accountants as defined under the Cost and Management Accountants Act, 1966 (XIV of 1966); or

(d) any other person as directed by the Board, to conduct audit of a registered person or persons, including audit of refund claims and forensic audit and the scope of such audit shall be determined by the Board or the Commissioner Inland Revenue on a case-to-case basis. In addition, the Board may, where it considers appropriate, also get such audit conducted jointly with similar audits being conducted by provincial administrations of sales tax on services.]⁴⁸⁸

(2) Notwithstanding that records of a registered person have been audited by an officer appointed under section 30, the Board or a ⁴⁸⁹[Commissioner]⁴⁸⁹ may direct ⁴⁹⁰[special audit panel]⁴⁹⁰ appointed under sub-section (1) to audit the records of any registered person.

(3) ⁴⁹¹[Every member of special audit panel]⁴⁹¹ appointed under sub-section (1), shall have the powers of an officer of ⁴⁹²[Inland Revenue]⁴⁹² under sections 25, 37 and 38.

⁴⁹³[(4) Each special audit panel shall be headed by a chairman who shall be an officer of Inland Revenue.

(5) If any one member of the special audit panel, other than the chairman, is absent from conducting an audit, the proceedings of the audit may continue and the audit conducted by the special audit panel shall not be invalid or be called in question merely on the ground of such absence.

(6) The Board may prescribe rules in respect of constitution, procedure and working of special audit panel.]⁴⁹³

⁴⁹⁴[32AA. [Omitted].]⁴⁹⁴

⁴⁹⁵ 32B. Appointment of experts and auditors ………………….
(1) The Board or the Commissioner may appoint as many experts as it or the Commissioner considers necessary for the purposes of this Act, including for the purposes of assistance in audit, investigation, litigation or valuation.

(2) The Board may appoint as many auditors as it may deem fit, through direct engagement or through a third party including a pay roll firm for the purposes of this Act, and confer such powers as may be deemed necessary to assist the authorities mentioned in clauses (a) to (f) of sub-section (1) of section 30 of this Act and clauses (a) to (f) of sub-section (1) of section 29 of the Federal Excise Act, 2005, as per the terms, conditions, limitations and restrictions as may be prescribed.

⁴⁹⁶[32C. National faceless centre.
anything to the contrary contained in any of the provisions of this Act, the Board may, for the purposes of proceedings under this Act in a faceless manner, establish a National faceless center (hereinafter referred to as “the Centre”) and specify its jurisdiction, powers, and functions.

(2) The centre shall comprise a Director General and as many officers of the Inland Revenue along with support staff, as the Board may deem fit for the purposes of this section.

(3) The Board may design algorithms for assigning any function or jurisdiction under this section to any of the authorities mentioned in sub-section (2).

(4) The centre shall comprise as many wings and units as may be prescribed by the Board.

(5) The functions of audit, assessment, and quality control in a specific case for a specific tax period shall be performed by separate officers.

(6) All communications, among the units, or with the registered person, or an authorized representative of the registered persons, or with any other person with respect to the information or documents or evidence or any other details, as may be necessary, shall be through electronic means.]⁴⁹⁶

CHAPTER VII
⁴⁹⁷[OFFENCES, PENALTIES AND PUNISHMENT]⁴⁹⁷

[33. Offences, Penalties and Punishment.– ⁴⁹⁸[...]⁴⁹⁸ Whoever.
commits any offence described in column (1) of the Table below shall, in addition to and not in derogation of any punishment to which he may be liable under any other law, be liable to the penalty mentioned against that offence in column (2) thereof: –

TABLE

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⁵⁵⁷[33A. [Omitted].]⁵⁵⁷
]

⁵⁵⁸[34. Default Surcharge.
– (1) Notwithstanding the provisions of section 11, if a registered person does not pay the tax due or any part thereof, whether wilfully or otherwise, in time or in the manner specified under this Act, rules or notifications issued thereunder or claims a tax credit, refund or makes an adjustment which is not admissible to him, or incorrectly applies the rate of zero per cent to supplies made by him, he shall, in addition to the tax due, pay default surcharge at the rate mentioned below:—

(a) ⁵⁵⁹[...]⁵⁵⁹ the person liable to pay any amount of tax or charge or the amount of refund erroneously made, shall pay default surcharge at the rate of ⁵⁶⁰[twelve percent per annum or KIBOR plus three percent per annum, whichever is higher]⁵⁶⁰, of the amount of tax due or the amount of refund erroneously made; ⁵⁶¹[and]⁵⁶¹

⁵⁶²[(b) ***]⁵⁶²

(c) in case, the default is on account of tax fraud, the person who has committed tax fraud shall pay default surcharge at the rate of two per cent per month, of the amount of tax evaded or the amount of refund fraudulently claimed, till such time the entire liability including the amount of default surcharge is paid.

(2) For the purpose of calculation of default surcharge, –

(a) in the case of inadmissible input tax credit or refund, the period of default shall be reckoned from the date of adjustment of such credit or, as the case may be, refund is received; and

(b) in the case of non-payment of tax or part thereof, the period of default shall be reckoned from the 16th day of a month (following the due date of the tax period to which the default relates) to the day preceding the date on which the tax due is actually paid.

Explanation.– For the purpose of this section tax due does not include the amount of penalty.

⁵⁶³[34A. Exemption from penalty and ⁵⁶⁴[default surcharge]⁵⁶⁴.

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⁵⁶⁷[35. [Omitted].]⁵⁶⁷

⁵⁶⁸[35A. [Omitted].]⁵⁶⁸

⁵⁶⁹[36. [Omitted].]⁵⁶⁹

37. Power to summon persons to give evidence and produce documents in inquiries under the Act.................................................. ………93.
documents in inquiries under the Act.– (1) Any officer of ⁵⁷⁰[Inland Revenue]⁵⁷⁰ shall have powers to summon any person whose attendance he considers necessary either to tender evidence or to produce documents or any other thing in any inquiry which such officer is making for any of the purposes of this Act.

(2) Any person summoned under sub-section (1) shall be bound to attend either in person or by an authorised agent, as the officer of 4[Inland Revenue] may direct;

Provided that a person who is exempted from personal appearance in a court under section 132 and 133 of the Code of Civil Procedure (Act V of 1908), shall not be required to appear in person.

(3) Any inquiry before an officer of ⁵⁷¹[Inland Revenue]⁵⁷¹ shall be deemed to be a judicial proceeding within the meaning of section 193 and ⁵⁷²[228]⁵⁷² of the Pakistan Penal Code (Act XLV of 1860).

⁵⁷³(4) For the purpose of an inquiry under this Act, the officer of Inland Revenue shall have the powers of a civil court trying a suit under the Code of Civil Procedure, 1908 (Act No. V of 1908), in respect of the following matters, namely:—

(a) summoning and enforcing the attendance of any person and examining him on oath; and

(b) requiring the discovery and production of documents and receiving evidence on affidavits.

⁵⁷⁴ 37A. Power to inquire, investigate offences warranting prosecution under this Act and Arrest of a person …………………………………..94.
prosecution under this Act and Arrest of a person.- (1) Notwithstanding anything contained in Section 11E of this Act, an officer of Inland Revenue not below the rank of assistant commissioner or any other officer authorized by the Board in this behalf on the basis of material evidence pointing to the commission of tax fraud or an offence warranting prosecution under this act may initiate an inquiry upon approval by the Commissioner.

(2) For the purpose of an inquiry under this Act, the officer of Inland revenue shall have the powers of a civil court trying a suit under the Code of Civil Procedure,1908(Act No. V of 1908), in respect of the following matters, namely: —

(a) summoning and enforcing the attendance of any person and examining on oath; and

(b) requiring the discovery and production of documents and receiving evidence on affidavits.

(3) The officer of inland revenue shall complete the inquiry while exercising the powers under the provisions of section 37, 38, 38A, 38B, 40 or any other section of the Act, wherever required within six months.

(4) During inquiry proceedings, the officer of inland revenue shall give an opportunity of being heard to the person whose actions alleged to have caused tax fraud warranting prosecution under this Act, confronting the person the details of tax fraud committed or caused to be committed by such person for explanation.

(5) The officer of inland revenue shall submit inquiry report along with reasons to be recorded in writing indicating the amount involved in tax fraud worked out as a result of such inquiry to the Commissioner to obtain prior approval for investigation or the closure of inquiry without any further investigation.

(6) The Commissioner, on the basis of inquiry report under sub-section (5) and after recording reasons in writing, shall either —

(i) approve initiation of investigation, or

(ii) require the officer of Inland Revenue to submit such further information or documents as he may direct for his decision; or

(iii) close the inquiry by rejecting the report or accepting the report, as the case may be.

(7) After approval of investigation under sub-section (6), the officer of inland revenue shall complete investigation within three months and prepare investigation report for submission before the competent court.

(8) The three-member committee notified by the Chairman, may authorize the Commissioner to issue warrant of arrest of a person, if it is satisfied on the basis of facts brought before it, that

(a) the tax fraud falls within the ambit of sub-clauses (a),

(b), (c), (d), (e) and (f) of clause (37) of section 2;

(b) the amount involved in tax fraud exceeds fifty million rupees; and

(c) it has been established during the course of investigation by the Inquiry Officer that —

(i) the accused is intentionally or willfully not joining the investigation after three duly served notices;

(ii) the accused is attempting to abscond; or

(iii) there are sufficient grounds that the accused would temper with the evidence.

(9) Notwithstanding anything contained in sub-section (8), the officer of inland revenue may arrest a person alleged to have committed a tax fraud after obtaining an arrest warrant from the Special Judge in a case of a fraud falling within the ambit of the subclauses of clause (37) of section 2 during the course of investigation if:-

(i) the accused is intentionally or willfully not joining the investigation after three duly served notices;

(ii) the accused attempting to abscond; or

(iii) there are sufficient grounds that the accused would temper with the evidence.

(10) Where the person suspected of tax fraud or any offence warranting prosecution under this Act is a company, every director or officer of that company whom the officer of inland revenue has reason to believe is personally responsible for actions of the company contributing the tax fraud or any offence warranting prosecution under this Act shall be liable to arrest;

Provided that any arrest under this sub-section shall not absolve the company from the liabilities of payment of tax, default surcharge and penalty imposed under this Act.

(11) Notwithstanding anything contained in this Act, where any person has committed a tax fraud or any offence warranting prosecution under this Act, the Commissioner may, either before or after the inquiry or investigation, compound the offence if such person pays the amount of tax evaded or sought to be evaded as determined in the inquiry or the investigation along with default surcharge and penalty as provided under this Act.

(12) Any person accused of an offence who is arrested under this Act shall at the time of arrest be informed of the grounds of arrest in writing on the basis of which he has been arrested.

(13) All arrests made under this Act shall be carried out in accordance with the relevant provisions of the Code of Criminal Procedure, 1898 (Act V of 1898):

Provided that no arrest under this section shall be made before the completion of inquiry under sub-section (1) of this section.

(14) The accused arrested may approach the competent court for his release on bail under the provisions contained in sections 497 and 498 of the Code of Criminal Procedure, 1898 (Act V of 1898).

(15) The purpose of prosecution under the provisions of sections 37A and 37B of this Act shall remain to —

(a) create sufficient deterrence against tax fraud; and

(b) provide for retribution for commission of tax fraud.;

37B. Procedure to be followed on arrest of a person.
(1) Where an officer of Inland Revenue arrests a person under Section 37A, he shall immediately intimate the fact of the arrest of that person to the Special Judge who may direct such Officer to produce that person at such time and place and on such date as the Special Judge considers expedient and such Officer shall act accordingly.

(2) Notwithstanding anything contained in the sub-section (1), any person arrested under this Act shall be produced before the Special Judge or, if there is no Special Judge within a reasonable distance, to the nearest Judicial Magistrate, within twenty-four hours of such arrest, excluding the time necessary for the journey from the place of arrest to the Court of the Special Judge or, as the case may be, of such Magistrate.

(3) Where a person is produced under sub-section (2) before the Special Judge, he may, on the request of such person, after perusing the record, if any and after giving the prosecution an opportunity of being heard, admit him to bail on his executing a bond, with or without sureties, or refuse to admit him to bail and direct his detention at such place as he deems fit:

Provided that nothing herein contained shall preclude the Special Judge from cancelling the bail of any such person at a subsequent stage if, for any reason, he considers such cancellation necessary, but before passing such order he shall afford such person an opportunity of being heard, unless for reasons to be recorded he considered that the affording of such opportunity shall defeat the purposes of this Act.

(4) When such person is produced under sub-section (2) before a Judicial Magistrate, such Magistrate may, after authorising his detention in such custody at such place and for such period as he considers necessary or proper for facilitating his earliest production before the Special Judge, direct his production before the Special Judge on a date and time to be fixed by him or direct such person to be forthwith taken to, and produced before, the Special Judge and he shall be so taken.

(5) Nothing in sub-section (3) or sub-section (4) shall preclude the Special Judge or the Judicial Magistrate from remanding any such person to the custody of an officer of Inland Revenue] holding investigation against that person if such officer makes a request in writing to that effect, and the Special Judge or the Judicial Magistrate, after perusing the record, if any, and hearing such person, is of the opinion that for the completion of inquiry or investigation it is necessary to make such order:

Provided that in no case the period of such custody shall exceed fourteen days.

(6) When any person is arrested under this Act, an officer of Inland Revenue shall record the fact of arrest and other relevant particulars in the register specified in sub-section (10) and shall immediately proceed to investigate into the charge against such person and if he completes the investigation within twenty-four hours of his arrest, excluding the time necessary for journey as aforesaid, he may, after producing such person before the Special Judge or the nearest Judicial Magistrate, make a request for his further detention in his custody.

(7) While holding an investigation under sub-section (6), an officer of Inland Revenue shall exercise the same powers as are exercisable by an officer in charge of a police station under the Code of Criminal Procedure, 1898 (Act V of 1898), but such officer shall exercise such powers subject to the foregoing provisions of this section while holding an investigation under this Act.

(8) If an officer of Inland Revenue, after holding an investigation as aforesaid, is of the opinion that there is no sufficient evidence or reasonable ground for suspicion against such person, he shall release him on his executing a bond, with or without sureties, and shall direct such person to appear, as and when required, before the Special Judge, and make a report to the Special Judge for the discharge of such person and shall make a full report of the case to his immediate superior.

(9) The Special Judge to whom a report has been made under sub-section, (8) may, after the perusal of record of the investigation, and hearing the prosecution, agree with such report and discharge the accused or, if he is of the opinion that there is sufficient ground for proceedings against such person, proceed with his trial and direct the prosecution to produce evidence.

(10) An officer of Inland Revenue empowered to hold investigation under this section shall maintain a register to be called "Register of Arrests and Detentions" in the prescribed form in which he shall enter the name and other particulars of every person arrested under this Act, together with the time and date of arrest, the details of the information received, the details of things, goods or documents, recovered from his custody, the name of the witnesses and the explanation, if any, given by him and the manner in which the investigation has been conducted from day to day; and, such register or authenticated copies of its aforesaid entries shall be produced before the Special Judge, whenever such Officer is so directed by him.

(11) After completing the investigation, an officer of Inland Revenue shall, as early as possible, submit to Special Judge a report in the same form and manner in which the officer in charge of a police station submits a report, before a court.

(12) Magistrate of the first class may record any statement or confession during investigation under this Act, in accordance with the provisions of Section 164 of the Code of Criminal Procedure, 1898 (Act V of 1898).

(13) Without prejudice to the foregoing provisions of this section, Board, with the approval of the Federal Minister-in-charge, may, by notification in the official Gazette, authorize any other officer working under the Board to exercise the powers and perform the functions of an officer of Inland Revenue under this section, subject to such conditions, if any, that it may deem fit to impose.

⁵⁷⁵[37C. Special Judges.
– (1) The Federal Government may by notification in the official Gazette, appoint as many Special Judges as it considers necessary and, where it appoints more than one Special Judge, it shall specify in the notification the headquarter of each Special Judge and the territorial limits within which he shall exercise jurisdiction under this Act.

(2) No person shall be appointed as a Special Judge unless he is or has been a Sessions Judge.]⁵⁷⁵

⁵⁷⁶[37D. Cognizance of Offences by Special Judges.
– (1) Notwithstanding anything contained in this Act or any other law for the time being in force, a Special Judge may, within the limits of his jurisdiction, take cognizance of any offence punishable under this Act:

(a) Upon a report in writing made by an officer of Inland Revenue or by any other officer especially authorized in this behalf by the Federal Government; or

(b) Upon receiving a complaint or information of facts constituting such offence made or communicated by any person; or

(c) Upon his own knowledge acquired during any proceeding before him under this act or under any other law for the time being in force.

(2) Upon the receipt of report under clause (a) of sub-section (1), the Special Judge shall proceed with trial of the accused.

(3) Upon the receipt of a complaint or information under clause

(b), or acquired in the manner referred to in clause (c) of sub-section (1), the Special Judge may, before issuing a summon or warrant for appearance of the person complained against, hold a preliminary inquiry for the purpose of ascertaining the truth or falsehood of the complaint, or direct any magistrate or any officer of Inland Revenue or any police officer to hold such inquiry and submit a report, and such Magistrate or officer shall conduct such inquiry and make report accordingly.

(4) If, after conducting such inquiry or after considering the report of such Magistrate or officer, the Special Judge is of the opinion that– –

(a) there is no sufficient ground for proceeding, he may dismiss the complaint, or

(b) there is sufficient ground for proceeding, he may proceed against the person complained against in accordance with law.

(5) A special Judge or a Magistrate or an officer holding inquiry under sub-section (3) may hold such inquiry, as early as possible, in accordance with the provision of section 202 of the Code of Criminal Procedure, 1898 (Act V of 1898).

37E. Special Judge, etc. to have exclusive Jurisdiction............ ……100.
to have exclusive jurisdiction.– Notwithstanding anything contained in this Act or in any other law for the time being in force,–

(a) no court other than the Special Judge having jurisdiction, shall try an offence punishable under this Act;

(b) no other court or officer, except in the manner and to the extent specifically provided for in this Act, shall exercise any power, or perform any function under this Act;

(c) no court, other than the High Court, shall entertain, hear or decide any application, petition or appeal under chapters XXXI and XXXII of the Code of Criminal Procedure, 1898 (Act V of 1898), against or in respect of any order or direction made under this Act; and

(d) no court, other than the Special Judge or the High Court, shall entertain any application or petition or pass any order or give any direction under chapters XXXVII, XXXIX, XLIV or XLV of the aforesaid Code.]

37F. Provisions of Code of Criminal Procedure, 1898, to apply.
–

(1) The provision of the Code of Criminal procedure, 1898 (Act V of 1898), so far as they are not inconsistent with the provisions of this Act, shall apply to the proceedings of the court of a Special Judge and such court shall be deemed to be a court of Sessions for the purpose of the said Code and the provisions of Chapter XXIIA of the foresaid Code, so far as applicable and with the necessary modifications, shall apply to the trial of cases by the Special Judge under this Act.

(2) For the purposes of sub-section (1), the Code of Criminal Procedure, 1898 (Act V of 1898), shall have effect as if an offence punishable under this Act were one of the offences referred to in sub-section (1) of section 337 of the said Code.

37G. Transfer of cases.
– (1) Where more than one Special Judge are appointed within the territorial jurisdiction of a High Court, the High Court, and where not more than one Special Judge is so appointed, the Federal Government, may by order in writing direct the transfer, at any stage of the trial, of any case from the court of one Special Judge to the Court of another Special Judge for disposal, whenever it appears to the High Court or, as the case may be, the Federal Government, that such transfer may promote the ends of justice or tend to the general convenience of the parties or witnesses.

(2) In respect of a case transferred to a Special Judge under sub-section (1), such Special Judge shall not by reason of the said transfer, be bound to recall and rehear any witness whose evidence has been recorded in the case before the transfer and may act upon the evidence already recorded or produced before the court which tried the case before the transfer.]

37H. Place of Sittings................................................................ … …102.
sittings at his headquarters but, keeping in view the general convenience of the parties or the witnesses, he may hold sittings at any other place.

37I. Appeal to the High Court.................................................. … …102.
Federal Government, the Board, the Commissioner or Director of Intelligence and Investigation or any other officer authorized in this behalf by the Board, aggrieved by any order passed or decision made by a Special Judge under this Act or under the Code of Criminal Procedure, 1898 (Act V of 1898), may, subject to the provisions of Chapters XXXI and XXXII of the said Code, within Sixty days from the date of the order or decision, prefer an appeal to the High Court.

(2) Except as otherwise provided in sub-section (1), the provisions of the Limitation Act, 1908 (IX of 1908), shall apply to an appeal preferred under sub-section (1).]

⁵⁷⁷[38. Authorised officers to have access to premises, stocks, accounts and records..................................................................................…102.
accounts and records – (1) Any officer authorised in this behalf by the Board ⁵⁷⁸[or the Commissioner ⁵⁷⁹[***]⁵⁷⁹]⁵⁷⁸ shall have free access ⁵⁸⁰[including real-time electronic access]⁵⁸⁰ to business or manufacturing premises, registered office or any other place where any stocks, business records or documents required under this Act are kept or maintained belonging to any registered person or a person liable for registration or whose business activities are covered under this Act or who may be required for any inquiry or investigation in any tax fraud committed by him or his agent or any other person; and such officer may, at any time, inspect the goods, stocks, records, data, documents, correspondence, accounts and statements, utility bills, bank statements, information regarding nature and sources of funds or assets with which his business is financed, and any other records or documents, including those which are required under any of the Federal, Provincial or local laws maintained in any form or mode and may take into his custody such records, statements, diskettes, documents or any part thereof, in original or copies thereof in such form as the authorised officer may deem fit against a signed receipt.

(2) The registered person, his agent or any other person specified in sub-section (1) shall be bound to answer any question or furnish such information or explanation as may be asked by the authorised officer.

(3) The department of' direct and indirect taxes or any other Government department, local bodies, autonomous bodies, corporations or such other institutions shall supply requisite information and render necessary assistance to the authorised officer in the course of inquiry or investigation under this section.]⁵⁷⁷

⁵⁸¹[(4) For the purpose of sub-section (1), the Board may make rules relating to electronic real-time access for audit or a survey of persons liable to tax.]⁵⁸¹

⁵⁸²[38A. Power to call for information............................................ … …103.
The ⁵⁸³[Commissioner]⁵⁸³ may, by notice in writing, require any person, including a banking company, to furnish such information or such statement in connection with any investigation or inquiry in cases of tax fraud, as may be specified in such notice ⁵⁸⁴[:]⁵⁸⁴]⁵⁸²

⁵⁸⁵[Provided that the ⁵⁸⁶[Commissioner]⁵⁸⁶ may require any regulatory authority to provide information concerning the licenses and authorizations issued by it.]⁵⁸⁵

⁵⁸⁷[38B. Obligation to produce documents and provide information.
– (1) Notwithstanding anything contained in this Act or any other law for the time being in force, any person required to maintain the record under the Act, on demand by an officer, not below the rank of ⁵⁸⁸[an Assistant]^{588 589}[Commissioner Inland Revenue]⁵⁸⁹, by notice in writing, as and when specified in the notice, shall,–

(a) produce for examination, such documents or records which the officer of ⁵⁹⁰[Inland Revenue]⁵⁹⁰ considers necessary or relevant to the audit, inquiry or investigation under the Act;

(b) allow the officer of ⁵⁹¹[Inland Revenue]⁵⁹¹ to take extracts from or copies of such documents or records; and

(c) appear before the officer of ⁵⁹²[Inland Revenue]⁵⁹² and answer any question put to him concerning the documents and records relating to the audit or inquiry or investigation referred to in clause (a) above.

(2) An officer of ⁵⁹³[Inland Revenue]⁵⁹³ conducting an audit, inquiry or, as the case may be, an investigation under the Act, may require in writing any person, department, company or organization to furnish such information as is held by that person, department, company or organization, which, in the opinion of the officer of ⁵⁹⁴[Inland Revenue]⁵⁹⁴, is relevant to such audit, inquiry or investigation.

(3) The Board may require, in writing, any person, department, company or organization, as the case may be, to provide any information or data held by that person, department, company or organization, which, in the opinion of the Board, is required for purposes of formulation of policy or administering the Customs, Sales Tax, Federal Excise or Income Tax.

(4) Every person, department, company or organization shall furnish the information requisitioned by the Board or the officer of Sales Tax under sub-section (2) or (3), within the time specified in the notice issued by the Board or, as the case may be, the officer of ⁵⁹⁵[Inland Revenue]⁵⁹⁵.]⁵⁸⁷

⁵⁹⁶(5) Notwithstanding anything contained in any other law for the time being in force, the Commissioner may, by notice in writing, require any Internet Service Providers, Telecommunication Companies and Pakistan Telecommunication Authority, to furnish subscriber's information pertaining to the Internet Protocols in connection with any inquiry or investigation in cases of tax fraud, as may be specified in such notice.

⁵⁹⁷[39. [Omitted].]⁵⁹⁷

⁵⁹⁸[40. Searches under warrant.– (1) Where any officer of ⁵⁹⁹[Inland.
Revenue]⁵⁹⁹ has reason to believe that any documents or things which in his opinion, may be useful for, or relevant to, any proceedings under this Act are kept in any place, he may after obtaining a warrant from the magistrate, enter that place and cause a search to be made at any time.

(2) The search made ⁶⁰⁰[in his presence]⁶⁰⁰ under sub-section (1) shall be carried out in accordance with the relevant provisions of the Code of Criminal Procedure, 1898 (V of 1898).]⁵⁹⁸

⁶⁰¹[40A. [Omitted].]⁶⁰¹

⁶⁰²[40B. Posting of 6[Inland Revenue] Officer.– Subject to such.
conditions and restrictions, as deemed fit to impose, the ⁶⁰³[Board]⁶⁰³, ⁶⁰⁴[omitted.]⁶⁰⁴ may post Officer of 6[Inland Revenue] to the premises of registered person or class of such persons to monitor production, sale of taxable goods and the stock position ⁶⁰⁵[.]^{605 606}[omitted.]⁶⁰⁶

⁶⁰⁷[40C. Monitoring of Tracking by Electronic or other means.
Subject to such conditions, restrictions, and procedures, as it may being fit to impose or specified, the Board may, by notification in the official Gazette, specify any registered person or class of registered persons or any good or class of goods in respect of which monitoring or tracking of production, sales, clearances, stocks or any other related activity may be implemented through electronic or other means as may be prescribed

⁶⁰⁸[(2) From such date as may be prescribed by the Board, no taxable goods shall be removed or sold by the manufacturer or any other person unless such goods are affixed with tax stamps, band role stickers or labels are monitored through a Production Monitoring System, video analytics or any other prescribed monitoring mechanism, etc. in any such form, style and manner as may be prescribed by the Board in this behalf;

(3) Such tax stamps, banderols, stickers, labels, barcodes, production monitoring equipment etc., shall be acquired by the registered person referred to in sub-section (2) from a licensee appointed by the Board.”; and ]⁶⁰⁸

⁶⁰⁹[(4) Notwithstanding anything contained in this Act or any other law for the time being in force, the provisions of section 83C of the Customs Act, 1969 (IV of 1969) shall mutatis mutandis apply.; and

(5) ⁶¹⁰[Omitted]⁶¹⁰

⁶¹¹[(6) Any taxable goods in respect of which monitoring, tracking or identification has been prescribed under this Act or rules made thereunder, which are manufactured, produced, removed, transported, supplied or otherwise dealt with or without affixing the prescribed tax stamps, banderoles, stickers, labels, barcodes or without compliance with the prescribed monitoring system, shall be liable to seizure and confiscation in the prescribed manner, along with the conveyance used for the movement, carriage or transportation of such goods.]⁶¹¹

⁶¹²[40D. Provisions relating to goods supplied from tax-exempt areas.
(1) The conveyance carrying goods supplied from the tax exempt areas, shall be accompanied by such documents in respect of the goods carried as may be prescribed under rules.

(2) The Regional Tax Office having jurisdiction may establish check-posts on the routes originating from tax-exempt areas for the purpose of examining the goods carried and the documents related thereto, An officer not below the rank of Inspector, Inland Revenue, as authorized by the Commissioner, Inland Revenue, and assigned to such check-posts, may stop vehicle on such routes as coming from tax-exempt areas and examine documents for ascertaining their validity and conformity to the goods carried.

(3) In the absence of the prescribed documents or any discrepancy in such documents, the goods so carried shall be seized along with the vehicle carrying the goods by the officer as aforesaid under proper acknowledgment.

(4) The notices to the owner of the goods and the vehicle to show cause against imposition of penalty shall be issued within fifteen days of the seizure as aforesaid.

(5) For the purposes of this section, the expression “tax-exempt areas” means Azad Jammu and Kashmir, Gilgit-Baltistan, ⁶¹³[Border Sustenance Markets and]⁶¹³ Tribal Areas as defined in Article 246 of the Constitution of the Islamic Republic of Pakistan and such other areas as may be prescribed.”;]⁶¹²

⁶¹⁴[40E. Licensing of brand name.-.
(1) Manufacturers of the specified goods shall be required to obtain brand licence for each brand or stock keeping unit (SKU) in such manner as may be prescribed by the Board.

(2) Any specified brand and SKU found to be sold without obtaining a licence from the Board shall be deemed counterfeit goods and liable to outright confiscation and destruction in the prescribed manner and such destruction and confiscation shall be without prejudice to any other penal action which may be taken under this Act.]⁶¹⁴

⁶¹⁵[40F. Sale of confiscated goods by auction.
– (1) Where any goods liable to confiscation under any provision of this Act have been confiscated, these goods, without prejudice to other action specified against such goods, shall be sold by public auction.

(2) The goods may be sold under sub-section (1) through electronic means, as prescribed by the Board.

(3) For the purpose of sub-sections (1) and (2) of this section, the Board shall be bound by Public Procurement Regulatory Authority Rules, 2004.

(4) The sale proceeds shall be applied to the following purposes in their respective order, namely:-

(a) first to pay the expenses of the sale;

(b) then to pay the sales tax, other taxes and dues including penalty and surcharge payable to the Federal Government in respect of such goods; and

(c) the balance in respect of confiscated goods excluding those liable for outright confiscation, if any, shall be paid to the owner of the goods, provided he applies for it within six months of the sale of the goods, failing which the balance amount shall be deposited into the government treasury:

Provided that, in case wherein goods declaration has been filed, the share of importer in sale proceeds shall not exceed the declared value of the goods.]⁶¹⁵

⁶¹⁶[41. [Omitted].]⁶¹⁶

42. [Omitted].

CHAPTER VIII
⁶¹⁷[APPEALS]⁶¹⁷

⁶¹⁸[43. [Omitted].]⁶¹⁸

⁶¹⁹[43A. [Omitted].]⁶¹⁹

44. [Omitted].

⁶²⁰[45. [Omitted].]⁶²⁰

⁶²¹[45A. Power of the Board ⁶²²[and ⁶²³[Commissioner]⁶²³]⁶²² to call for.
records.-- (1) The Board may, of its own motion ⁶²⁴[, or otherwise]⁶²⁴ call for and examine the record of any departmental proceedings under this Act or the rules made there under for the purpose of satisfying itself as to the legality or propriety of any decision or order passed therein by an Officer of ⁶²⁵[Inland Revenue]⁶²⁵, it may pass such order as it may think fit:

Provided that no order imposing or enhancing any penalty or fine requiring payment of a greater amount of [Sales Tax] than the originally levied shall be passed unless the person affected by such order has been given an opportunity of showing cause and of being heard.

(2) No proceeding under ⁶²⁶[this section]⁶²⁶ shall be initiated in a case where an appeal under Section ⁶²⁷[45B]⁶²⁷ or Section 46 is pending.

(3) No order shall be made under this Section after the expiry of ⁶²⁸[five]⁶²⁸ years from the date of original decision or order of the sub-ordinate officer referred to in sub-section (1).

⁶²⁹[(4) The ⁶³⁰[Commissioner]⁶³⁰ may, suo moto, call for and examine the record of any proceeding under this Act or the rules made thereunder for the purpose of satisfying himself as to the legality or propriety of any decision or order passed by an officer of ⁶³¹[Inland Revenue]⁶³¹ subordinate to him, and pass such order as he may deem fit.]⁶²⁹]⁶²¹

⁶³²[45B. Appeals.– ⁶³³[(1) Any person, other than an State.
– ⁶³³[(1) Any person, other than an State Owned Enterprises (SOE), aggrieved by any decision or order passed under sections 10,11A,11D, 11E, 11F,21,33, 34 and 66 of this Act, by an officer of Inland Revenue may, within thirty days of the date of receipt of such decision or order prefer appeal to the Commissioner Inland Revenue (Appeals):

Provided that an appeal preferred after the expiry of thirty days may be admitted by the Commissioner Inland Revenue (Appeals) if he is satisfied that the appellant has sufficient cause for not preferring the appeal within the specified period:

Provided further that registered person shall have an option to directly file an appeal before Appellate Tribunal Inland Revenue without availing right of Appeal under this section.

9[****]

⁶³⁴[(1A) An appeal under sub-section (1) shall–

(a) be in the prescribed form;

(b) be verified in the prescribed manner;

(c) state precisely the grounds upon which the appeal is made;

(d) be accompanied by the prescribed fee specified in sub-section (1B); and

(e) be lodged with the Commissioner (Appeals) within the time set out in sub-section (1).

[(1B) The prescribed fee shall be–

(a) in the case of an appeal against an assessment–

(i) where the appellant is a company, five thousand rupees; or

(ii) where the appellant is not a company, two thousand and five hundred rupees; and

(b) in any other case–

(i) where appellant is a company, five thousand rupees; or

(ii) where the appellant is not a company, one thousand rupees.]

⁶³⁵[⁶³⁶[(1C) Where in a particular case, the Commissioner (Appeals) is of the opinion recovery of tax levied under this act, shall cause undue hardship to the taxpayer, he, after affording opportunity of being heard to the commissioner or officer of Inland revenue against whose orders appeal has been made, may stay the recovery of such tax for a period not exceeding thirty days in aggregate.]⁶³⁶

(2) The ⁶³⁷[Commissioner Inland Revenue]⁶³⁷ (Appeals) may, after giving both parties to the appeal an opportunity of being heard, pass such order as he thinks fit, confirming, varying, altering, setting aside or annulling the decision or order appealed against ⁶³⁹[:]⁶³⁹

⁶⁴⁰[Provided that such order shall be passed not later than ⁶⁴¹[one hundred and twenty]⁶⁴¹ days from the date of filing of appeal or within such extended period as the ⁶⁴²[Commissioner]⁶⁴² (Appeals) may, for reasons to be recorded in writing fix:

Provided further that such extended period shall, in no case, exceed ⁶⁴³[sixty]⁶⁴³ days ⁶⁴⁴[:]⁶⁴⁴]⁶⁴⁰

⁶⁴⁵[Provided further that any period during which the proceedings are adjourned on account of a stay order or Alternative Dispute Resolution proceedings or the time taken through adjournment by the petitioner not exceeding thirty days shall be excluded from the computation of aforesaid periods.]⁶⁴⁵

(3) In deciding an appeal, the 1[Commissioner of Inland Revenue] (Appeals) may make such further inquiry as may be necessary

Provided that he shall not remand the case for de novo consideration.

⁶⁴⁶[(4) ***]⁶⁴⁶

⁶⁴⁷[(5) The Commissioner (Appeals) shall not admit any documentary material or evidence which was not produced before the Officer Inland Revenue unless the Commissioner (Appeals) is satisfied that the appellant was prevented by sufficient cause from producing such material or evidence before the Officer Inland Revenue.]⁶⁴⁷

⁶⁴⁸[45C. Faceless Appeals………… ……………….
– (1) Notwithstanding anything contained in this Act, any appeal filed under section 45B of this Act may be processed through the National faceless center as may be prescribed by the Board.

(2) The provisions of section 45B of this Act shall apply to faceless appeals accordingly.]⁶⁴⁸

46. Appeals to Appellate Tribunal.
– 629(1) Any person including an officer of inland revenue not below the rank of Additional Commissioner aggrieved by an order of the Commissioner (Appeals) under this Act or the rules made thereunder; or any person other than SOE aggrieved by an order passed by officer of inland revenue when second proviso to section 45B applies, may within thirty days of the receipt of such order, prefer an appeal to the Appellate Tribunal:

Provided that where sub-section (11) of section 134A of Income Tax Ordinance, 2001 (XLIX of 2001) shall apply, an SOE may prefer an appeal under this sub-section.

⁶⁵⁰[(2) The Appellate Tribunal may admit, hear and dispose of the appeal as per procedure laid down in sections ⁶⁵¹[131 and 132 of the Income tax Ordinance, 2001(XLIX of 2001, and rules made thereunder.]⁶⁵¹

⁶⁵²[633(2A)***]⁶⁵²

⁶⁵⁴[(3) ***

(4) ***

(5) ***

(6) ***

(7) ***

(8) ***

(9) ***]⁶⁵⁴

⁶⁵⁵[47. Reference to the High Court.
636(1) Within sixty days of communication of the order of the Appellate Tribunal, the aggrieved person or the Commissioner may submit a reference in the prescribed form along with a statement of the case and complete record of the Appellate Tribunal to the High Court, stating any question of law arising out of such order.

(2) Provisions of section 133 of the Income Tax Ordinance, 2001 (XLIX of 2001) and rules made thereunder relating to a reference to the High Court shall, mutatis mutandis, apply to references to the High Court under this Act.]⁶⁵⁵

⁶⁵⁷[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 fifty 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, except where criminal proceedings have been initiated, to the Board for the appointment of a committee for the resolution of any hardship or dispute mentioned in detail in the application:

Provided that where the aggrieved person is a state-owned enterprise (SOE), the limit of tax liability of fifty million rupees or above mentioned in clause (a) shall not apply and it shall be mandatory for such aggrieved SOE to apply to the Board for the appointment of a committee for the resolution of any dispute under this section:

Provided further that no suit, prosecution, or other legal proceedings shall lie against the SOE in relation to the dispute resolved under this section.

Explanation.- State-owned enterprise shall have the same, meaning as assigned thereto in the State-Owned Enterprises (Governance and Operations) Act, 2023 (VII of 2023).

(2) Provisions of section 134A of the Income Tax Ordinance, 2001 (XLIX of 2001) and rules made thereunder relating to alternative dispute resolution shall, mutatis mutandis, apply to applications for alternative dispute resolution under this Act.]⁶⁵⁷

⁶⁵⁸[47AA. Algorithmic Settlement Mechanism.
(1) Notwithstanding anything contained in this Act, the Board may establish a digitally operated algorithmic settlement mechanism (hereinafter referred to as "the mechanism") for settlement of tax proceedings at any stage before any order under sections 11D or 11E of the Act.

(2) In case the mechanism calculates and presents to the registered person a settlement offer as per the criteria provided under sub-section (3), the registered person may avail the offer as provided in sub-section (4).

(3) The system generated settlement offer shall be calculated on the basis including but not limited to:

(a) the stage of proceedings at which settlement is offered;

(b) the registered person’s compliance history, as maintained in FBR's data;

(c) the nature and character of the discrepancy; and

(d) any other basis the Board may consider relevant.

(4) A registered person who opts to avail this mechanism shall, within ten days from the date of the settlement offer to accept the settlement offer on IRIS and deposit the settlement offer amount.

(5) The issues confronted to the registered person, if any, through a notice or an audit report under this Act shall stand abated if the registered person deposits the settlement amount as provided in sub-section (4).

(6) Payment of tax consequent upon acceptance of offer under sub-section (4) of this section shall not preclude proceedings in respect of any other issue or discrepancy not covered by the settlement offer, nor shall it affect proceedings for any other tax period.]⁶⁵⁸

⁶⁵⁹[47AAA. Independent Case Scrutiny Committee………....….
(1) A reference under section 47 before the High Court, or an appeal or review before the Federal Constitutional Court or the Supreme Court of Pakistan, as the case may be, shall only be filed by the Commissioner Inland Revenue after the same has been approved by an independent case scrutiny committee as constituted by the Board.

(2) The Board may constitute one or more such committees and assigned them cases or classes of cases decided by the Appellate Tribunal Inland Revenue or the High Court as the case may be.

(3) The Committee shall comprise of the following Members as nominated by the Board –

(a) a retired judge of the Supreme Court of Pakistan, the Federal Constitutional Court, or any of the High Courts of Pakistan who shall also act as Chairman of the Committee;

(b) an Advocate having not less than fifteen years of experience in tax and commercial litigation before the High Court or Supreme Court of Pakistan, to be nominated from a panel notified by the Board from time to time; and

(c) a senior serving or retired officer of the FBR (BS 20 or above).

Provided that the committee may co-opt a chartered accountant as a non-voting member whenever required.

(4) The powers, functions, scope and procedure of the Committee along with remuneration of its Members shall be governed as prescribed.

(5) Recommendations of the committee shall be binding upon the Commissioner Inland Revenue having jurisdiction over the case.

(6) Notwithstanding anything contained in any other law for the time being in force, no suit, prosecution, or other legal proceedings shall lie against the Members of the Committee and the Commissioner Inland Revenue having jurisdiction over the case, in relation to the decisions made under this section.;

(7) The Committee constituted under this sub-section shall exercise its powers and functions with effect from the date of its constitution as notified by the Board.”;

(8) Notwithstanding anything contained in this Act or The Limitation Act, 1908, for purposes of determining whether a matter referred to in sub-section (1) has been filed within time, the period from the date from which time begins to run to the date on which the committee gives it approval, which period shall in each case be certified by the chairman, shall stand excluded:

Provided that in cases where time has already begun to run when this section comes into force the period as aforesaid shall commence from the date on which the Finance Act 2026 comes into force.]⁶⁵⁹

⁶⁶⁰[47AB. Saving.
–The period of limitation provided in clause (c) of sub-section (1) of section 46 and sub-section (1) of section 47 shall continue to apply where any decision of the commissioner (Appeals) or the Appellate Tribunal is received prior to the date of commencement of the Tax Laws (Amendment) Act, 2024 (V of 2024).]⁶⁶⁰

CHAPTER IX
RECOVERY OF ARREARS

48. Recovery of arrears of tax.-.
(1) ⁶⁶¹[Subject to sub-section (1A), where]⁶⁶¹ any amount of tax ⁶⁶²[...]⁶⁶² is due from any person, the officer of ⁶⁶³[Inland Revenue]⁶⁶³ may:-

(a) deduct the amount from any money owing to person from whom such amount is recoverable and which may be at the disposal or in the control of such officer or any officer of Income Tax, Customs or Central Excise Department;

(b) require by a notice in writing any person who holds or may subsequently hold any money for or on account of the person from whom tax may be recoverable to pay to such officer the amount specified in the notice;

(c) stop removal of any goods from the business premises of such person till such time the amount of tax is paid or recovered in full;

⁶⁶⁴[(ca) require by a notice in writing any person to stop clearance of imported goods or manufactured goods or attach bank accounts;]⁶⁶⁴

(d) seal the business premises till such time the amount of tax is paid or- recovered in full;

(e) attach and sell or sell without attachment any movable or immovable property of the registered person from whom tax is due ⁶⁶⁵[; and]⁶⁶⁵

(f) ⁶⁶⁶[...]⁶⁶⁶ recover such amount by attachment and sale of any moveable or- immovable property of the guarantor, person, company, bank or financial institution, where a guarantor or any other person, company, bank or financial institution fails to make payment under such guarantee, bond or instrument ⁶⁶⁷[:]⁶⁶⁷

Provided that the Commissioner Inland Revenue or any officer of Inland Revenue 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 ⁶⁶⁸[or, as the case may be, section 46]⁶⁶⁸ 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 ⁶⁶⁹[ten]⁶⁶⁹ per cent of the amount of tax due has been paid by the taxpayer.]

⁶⁷⁰[(1A) If any arrears of tax, default surcharge, penalty or any other amount which is adjudged or payable by any person and which cannot be recovered in the manner prescribed above, the Board or any officer authorized by the Board, may, write off the arrears in the manner as may be prescribed by the Board.]⁶⁷⁰

(2) For the purpose of recovery of tax, penalty or any other demand raised under this Act, the officer of ⁶⁷¹[Inland Revenue]⁶⁷¹ shall have the same powers which under the Code of Civil Procedure 1908 (V of 1908), a Civil Court has for the purpose of recovery of an amount due under a decree.

⁶⁷²[(3) The provision of sub-sections (1) and (2) shall mutatis mutandis apply regarding assistance in collection and recovery of taxes in pursuance of a request from a foreign jurisdiction under a tax treaty, bilateral or a multilateral convention, and inter-governmental agreement or similar agreement or mechanism.]⁶⁷²

CHAPTER X
MISCELLANEOUS

⁶⁷³[49. Sales of taxable activity or transfer of ownership.--.
(1) In case of termination of taxable activity or part thereof or its sale or transfer of ownership to a non-registered person, the possession of taxable goods or part thereof by the registered person shall be deemed to be a taxable supply and the registered person shall be required to account for and pay the tax on the taxable goods held by him:

Provided that if the tax payable by such registered person remains unpaid, the amount of unpaid tax shall be the first charge on the assets of the business and shall be payable by the transferee of business.

⁶⁷⁴[(2) In the case of sale or transfer of ownership of a taxable activity or part thereof to another registered person as an ongoing concern, the taxable goods or part thereof shall be transferred to the new owner through a zero-rated invoice and the sales tax chargeable thereon shall be accounted for and paid by the registered person to whom such taxable activity or part thereof is transferred.]⁶⁷⁴

⁶⁷⁵[49A. Liquidators.
– (1) Every person (hereinafter referred to as a “liquidator”) who is –

(a) a liquidator of a company;

(b) a receiver appointed by a Court or appointed out of Court;

(c) a trustee for a bankrupt; or

(d) a mortgagee in possession; shall, within fourteen days of being appointed or taking possession of an asset in Pakistan, whichever occurs first, give written notice thereof to the ⁶⁷⁶[Commissioner]⁶⁷⁶. (2) The 4[commissioner] shall, within three months of being notified under sub-section (1), notify the liquidator, in writing, of the amount which appears to the 1[Commissioner] to be sufficient to provide for any sales tax which is or will become payable by the person whose assets are in the possession of the liquidator.

(3) A liquidator shall not, without leave of the 1[Commissioner]. Part with any asset held as liquidator until the liquidator has been notified under sub-section (2).

(4) A liquidator: –

(a) shall set aside, out of the proceeds of sale of any asset by the liquidator, the amount notified by the 1[Commissioner] under sub-section (2), or such amount as is subsequently agreed to by the 1[Commissioner]: and

(b) shall be liable to the extent of the amount set aside for the Sales tax liability of the person who owned the asset.

(5) A liquidator shall be personally liable to the extent of any amount required to be set-aside under sub-section (4) for the tax referred to in sub-section (2) if, and to the extent that, the liquidator fails to comply with the requirements of this section.

(6) Where the proceeds of sale of any asset are less than the amount notified by the ⁶⁷⁷[Commissioner]⁶⁷⁷ under sub-section (2), the application of sub-sections (4) and (5) shall be limited to the proceeds of sale.

(7) This section shall have effect notwithstanding anything contained in any other law for the time being in force.]⁶⁷⁵

50. Power to make rules.– ⁶⁷⁸[(1)]⁶⁷⁸ The Board may, by notification.
– ⁶⁷⁸[(1)]⁶⁷⁸ The Board may, by notification in the official Gazette, make rules for carrying out the purposes of this Act ⁶⁷⁹[, including rules for charging fee for processing of return, claims and other documents and for preparation of copies thereof.]⁶⁷⁹

⁶⁸⁰[(2) All rules made under sub-section (1) or any other provisions of this Act, shall be collected, arranged and published along with general orders and departmental instructions and rulings, if any, at appropriate intervals and sold to the public at reasonable price ⁶⁸¹[or may be placed regularly on the official website maintained by the Board.]⁶⁸¹

⁶⁸²[50A. Computerized system.
– (1) The Board may prescribe the use of computerized system for carrying out the purposes of this Act, including the receipt of applications for registration, returns and such other declarations or information required to be provided under this Act and the rules made thereunder, from such date and for such registered persons or class of persons as the Board may, by notification in the official Gazette, specify.

(2) The Board may make rules for regulating the conduct and transaction of business in relation to the submission of returns or other information to the Board by the persons required to transmit or receive any information through the computerized system, including ⁶⁸³[matters such as grant of]⁶⁸³ authorization, suspension and cancellation of authorization and for security of the information transmitted or received through the computerized system.]⁶⁸²

⁶⁸⁴[(3) Unless otherwise proved, the information received in the computerized system from or on behalf of any registered person shall, for all official and legal purposes, be deemed to have been furnished by and received from such registered person.

(4) The business information gathered through computerized system shall be confidential to be used only for official and legal purposes and no unauthorized person shall claim for any access to such information.]⁶⁸⁴

⁶⁸⁵[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 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 under sub-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 be so implemented so as to keep record of the issues detected, intimations sent, responses received and actions taken, and to 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 computerised system.]⁶⁸⁵

51. Bar of suits, prosecution and other legal proceedings.
– (1) No suit shall be brought in any Civil Court to set aside or modify any order passed, any assessment made, any tax levied, any penalty imposed or collection of any tax made under this Act.

(2) No suit, prosecution or other legal proceeding shall lie against the Federal Government or against any public servant in respect of any order passed in good faith under this Act.

⁶⁸⁶[(3) Notwithstanding anything in any other law for the time being in force, no investigation or inquiry shall be undertaken or initiated by any governmental agency against any officer or official for anything done in his official capacity under this Act, rules, instructions or direction made or issued thereunder without the prior approval of the Board.]⁶⁸⁶

52. Appearance by authorised representative.
– A registered person required to appear before the Appellate Tribunal or an officer of ⁶⁸⁷[Inland Revenue]⁶⁸⁷ in connection with any proceedings under this Act may, in writing, authorise any person ⁶⁸⁸[having such qualification as may be prescribed]⁶⁸⁸ to represent him or appear on his behalf.

⁶⁸⁹[52A. e-intermediaries to be appointed.
– (1) Subject to such conditions, limitations and restrictions, the Board may, by a notification in the official Gazette, appoint a person to electronically file return under Chapter V and such other documents electronically, as may be prescribed from time to time, on behalf of a person registered under section 14.

(2) A person registered under section 14 may authorize an e-intermediary to electronically file return or any other documents, as specified in sub-section (1).

(3) The return or such other documents filed by an e-intermediary on behalf of a registered person shall be deemed to have been filed by that registered person.

(4) Where this Act requires anything to be done by the registered person and if such thing is done by an e-intermediary authorized by the registered person under sub-section (2), unless the contrary is proved, shall be deemed to have been done with the knowledge and consent of such registered person so that in any proceedings under this Act, the registered person shall be liable as if the thing has been done by him.

(5) Where an e-intermediary, authorized by a registered person under sub-section (2) to act on his behalf, knowingly or wilfully submits a false or incorrect information or document or declaration with an intent to avoid payment of tax due or any part thereof or claiming a tax credit or a refund that is not due to the registered person, such e-intermediary shall be jointly and severally responsible for recovery of the amount of tax short paid or the amount refunded in excess as a result of such incorrect or false information or document or declaration, without prejudice to any other action that may be taken against him under the relevant provisions of the law.

(6) The Board may, by notification in the official Gazette, prescribe rules for the conduct and transaction of business of e-intermediaries, including their appointment, suspension and cancellation of appointment, subject to such conditions as specified therein.]⁶⁸⁹

53. Estate of deceased person.
– The tax liability of a deceased registered person under the Act shall be the first charge on his estate in the hands of his successors.

54. Estate in bankruptcy.
– (1) If a registered person is declared bankrupt, the tax liability under this Act shall pass on to the estate in bankruptcy if it continues to operate the business.

(2) If tax liability is incurred by an estate in bankruptcy, the tax is deemed to be a current expenditure in the operations of the estate in bankruptcy and shall be paid before the claims preferred by other creditors are settled.

⁶⁹⁰[55. Removal of difficulties.
– If any difficulty arises in giving effect to the provisions of this Act or the rules made or notifications issued there under, the Board may through a general order or otherwise, issue instructions or directions, not inconsistent with the provisions of this Act, for such actions to be taken by an officer of Inland Revenue or any other person as it considers necessary or expedient for the purpose of removing the difficulty.]⁶⁹⁰

⁶⁹¹[56. Service of order, decisions, etc.
– (1) subject to this Act, any notice, order or requisition required to be served on a resident individual, other than in a representative capacity for the purposes of this Act shall be treated as properly served on the individual if –

(a) personally served on the individual or, in the case of an individual under a legal disability or a non-residents individual the representative of the individual;

(b) sent by register post or courier service specified in clause (b) of sub-section (2) or to the individual’s usual or last known address in Pakistan; ⁶⁹²[..]⁶⁹²

(c) served on the individual in the manner prescribed for service of a summons under the code of civil procedure, 1908(Act V of 1908) ⁶⁹³[; or

(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 ⁶⁹⁴[registered person]⁶⁹⁴.]⁶⁹³

(2) Subject to this Act, any notice order or requisition required to be served on any person, other than a resident individual to whom sub-section (1)applies, for the purposes of this Act, shall be treated as properly served on person if –

(a) personally served on the representative of the person;

(b) sent by registered post or courier service to the person’s registered office or address for service of notices under this Act, in Pakistan or where the person does not have such office or address, the notice is sent by registered [Post to any office or place of business of the person in Pakistan; ⁶⁹⁵[..]

(c) served on the Person in the manner prescribed for service of a summons under the code of civil procedure, 1908(Act V of 1908) ⁶⁹⁶[; or

(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 3[registered person].]⁶⁹⁶

(3) Where an association of persons is dissolved, any notice, order or requisition required to be served under this Act, on the association or a member of the association may be served on any person who was the principal officer or a member of the association immediately before such dissolution.

(4) Where, business stands discontinued, any notice, order or requisition required to be served under this Act, on the person discontinuing the business may be served on the person personally or on any individual who was the person’s representative at the time of discontinuance.

(5) The validity of service of a notice under this Act shall not be called into question after the notice has been complied with in any manner.]⁶⁹⁵

⁶⁹⁷[56A. Agreement for the exchange of information ⁶⁹⁸[or assistance.
⁶⁹⁸[or assistance in recovery of taxes]⁶⁹⁸.– (1) The Federal Government may enter into bilateral or multilateral agreements with provincial governments or with governments of foreign countries for the exchange of information, including electronic exchange of information, with respect to sales tax imposed under this Act or any other law of Pakistan and under the corresponding laws of such countries and may, by notification in the official Gazette, make such provisions as may be necessary for implementing such agreements.

⁶⁹⁹[(1A) Notwithstanding anything contained in this Act, the Board shall have power to share data or information including real time data videos, images received under the provisions of this Act with any other Ministry or Division of the Federal Government or Provincial Government, subject to such limitations and conditions an may be specified by the Board.]⁶⁹⁹

(2) The provisions of section 107 of the Income Tax Ordinance, 2001 (XLIX of 2001) shall, mutatis mutandis, apply to the provisions of this section.

⁷⁰⁰[(3) The Federal Government may enter into bilateral or multilateral convention, and inter-governmental agreement or similar agreement or mechanism for assistance in the recovery of taxes.]⁷⁰⁰

⁷⁰¹[56AB. Real time access to information and databases.
(1) Notwithstanding anything contained in any law for the time being in force, including but not limited to the National Database and Registration Authority Ordinance, 2000 (Ordinance VIII of 2000), and the Emigration Ordinance, 1979 (Ordinance XVIII of 1979), arrangements shall be made to provide real-time access of information and database to the Board in the prescribed form and manner by–

(a) the National Database and Registration Authority with respect to information pertaining to National Identity Card (NIC), Pakistan Origin Card, Overseas Identity Card, Alien Registration Card, and other particulars contained in the Citizen Database;

(b) the Federal Investigation Agency and the Bureau of Emigration and Overseas Employment with respect to details of international travel;

(c) the Islamabad Capital Territory and Provincial and local land record and development authorities with respect to record-of-rights including digitized edition of record-of-rights, periodic record, record of mutations and report of acquisition of rights;

(d) the Islamabad Capital Territory and Provincial Excise and Taxation Departments with respect to information regarding registration of vehicles, transfer of ownership and other associated record;

(e) all electricity suppliers and gas transmission and distribution companies with respect to particulars of a consumer, the units consumed and the amount of bill charged or paid:

Provided that where the connection is shared or is used by a person other than the owner, the name and NIC of the owner and the user shall also be furnished:

Provided further that all electricity suppliers and gas transmission and distribution companies shall make arrangements by the 1st day of January, 2021 for allowing consumers to update the ratio of sharing of a connection or the particulars of users, as the case may be; and

(f) any other agency, authority, institution or organization, notified by the Board.

(2) The Board shall make arrangements for laying the infrastructure for real-time access to information and database under sub-section (1) and aligning it with its own database in the manner as may be prescribed.

(3) Until real-time access to information and database is made available under sub-section (1), such information and data shall be provided periodically in such form and manner as may be prescribed.

(4) Subject to section 56B, all information received under this section shall be used only for tax purposes and kept confidential.]⁷⁰¹

⁷⁰²[56B. Disclosure of information by a public servant.............. ……. ….126.
information acquired under any provision of this Act shall be confidential and no public servant ⁷⁰³[, expert or auditors appointed under section 32B]⁷⁰³ shall disclose any such information, except as provided under section 216 of the Income Tax Ordinance, 2001 (XLIX of 2001).

(2) Notwithstanding anything contained in sub-section (1) and the Freedom of Information Ordinance, 2002 (XCVI of 2002), any information received or supplied in pursuance of bilateral or multilateral agreements with government of foreign countries for exchange of information under section 56A shall be confidential.]⁷⁰²

56C. Prize schemes to promote tax culture.
1[(1)] The Board may prescribe prize schemes to encourage the general public to make purchases only from registered persons issuing tax invoices.]

⁷⁰⁴[(2) The Board may prescribe procedure for “mystery shopping” in respect of invoices issued by tier-1 retailers integrated with FBR online system randomly and in case of any discrepancy, all the relevant provisions of this Act shall apply accordingly.]⁷⁰⁴

⁷⁰⁵[57. Rectification of Mistake.
– (1) The officer of Inland Revenue, Commissioner, the Commissioner (Appeals) or the Appellate Tribunal may, by an order in writing, amend any order passed by him to rectify any mistake apparent from the record on his or its own motion or any mistake brought to his or its notice by a taxpayer or, in the case of the Commissioner (Appeals) or the Appellate Tribunal, the Commissioner.

(2) No order under sub section (1) which has the effect of increasing an assessment, reducing a refund or otherwise applying adversely to the taxpayer shall be made unless the taxpayer has been given a reasonable opportunity of being heard.

(3) Where a mistake apparent on the record is brought to the notice of the officer of Inland Revenue, Commissioner or Commissioner (Appeals), as the case may be, and no order has been made under sub section (1), before the expiration of the Financial year next following the date on which the mistake was brought to their notice, the mistake shall be treated as rectified and all the provisions of this Act shall have effect accordingly.

(4) No order under sub-section (1) shall be made after five years from the date of the order sought to be rectified.]⁷⁰⁵

⁷⁰⁶[58. Liability for payment of tax in the case of private companies or business enterprises........................................................... ……..127.
business enterprises.–(1) Notwithstanding anything contained in the Companies Act, 2017 (XIX of 2017), where any private company or business enterprise is wound up and any tax chargeable on the company or business enterprise, whether before, or in the course, or after its liquidation, in respect of any tax period cannot be recovered from the company or business enterprise, every person who was an owner of, or partner in, or director of, or a shareholder, owning not less than ten per cent of the paid-up capital, in the company or business enterprise, as the case may be, during the relevant period shall jointly and severally with such persons, be liable for the payment of such tax.

(2) Any director or partner who pays tax under sub-section (1) shall be entitled to recover the tax paid from the company or a share of the tax from any other director or partner, as the case may be.

(3) A shareholder who pays tax under sub-section (1) shall be entitled to recover the tax paid from the company or from any other shareholder, owning not less than ten percent of the paid up capital, in proportion to the shares owned by that other shareholder.”; and

(4) The provisions of this Act shall apply to any amount due under this section as if it were tax due under an order for assessment made under this Act.]⁷⁰⁶

⁷⁰⁷[58A. Representatives.
– (1) For the purpose of this Act and subject to sub-sections (2) and (3), the expression “representative” in respect of a registered person, means: –

(a) where the person is an individual under a legal disability, the guardian or manager who receives or is entitled to receive income on behalf, or for the benefit of the individual;

(b) where the person is a company (other than a trust, a Provincial Government, or local authority in Pakistan), a director or a manager or secretary or agent or accountant or any similar officer of the company;

(c) where the person is a trust declared by a duly executed instrument in writing whether testamentary or otherwise, any trustee of the trust;

(d) where the person is a Provincial Government, or local authority in Pakistan, any individual responsible for accounting for the receipt and payment of money or funds on behalf of the Provincial Government or local authority;

(e) where the person is an association of persons, a director or a manager or secretary or agent or accountant or any similar officer of the association or, in the case of a firm, any partner in the firm;

(f) where the person is the Federal Government, any individual responsible for accounting for the receipt and payment of moneys or funds on behalf of the Federal Government; or

(g) where the person is a public international organization, or a foreign government or political sub-division of a foreign government, any individual responsible for accounting for the receipt and payment of moneys or funds in Pakistan on behalf of the organization, government, or political subdivision of the government.

(2) Where the Court of Wards, the Administrator General, the Official Trustee, or any receiver or manager appointed by, or under, any order of a Court receives or is entitled to receive income on behalf, or for the benefit of any person, such Court of Wards, Administrator General, Official Trustee, receiver, or manager shall be the representative of the person for the purposes of this Act.

(3) ⁷⁰⁸[subject to sub-section (4), where a person is a non-resident person, the representative of the said person for the purpose of this Act, for a financial year in which the relevant tax period falls, shall be any person in Pakistan]⁷⁰⁸: – –

(a) who is employed by, or on behalf of, the non-resident person;

(b) who has any business connection with the non-resident person;

(c) from or through whom the non-resident person is in receipt of any income, whether directly or indirectly;

(d) who holds, or controls the receipt or disposal of any money belonging to the non-resident person;

(e) who is the trustee of the non-resident person; or

(f) who is declared by the ⁷⁰⁹[Commissioner]⁷⁰⁹ by an order in writing to be the representative of the non-resident person.

1[Explanation.– For the purposes of this sub-section, non-resident person shall have the same meaning assigned thereto under the Income Tax Ordinance, 2001 (XLIX of 2001).]

(4) No person shall be declared as the representative of a non-resident person unless the person has been given an opportunity by the 1[Commissioner] of being heard.]⁷⁰⁷

58B. Liability and obligations of representatives.
– (1) Every representative of a person shall be responsible for performing any duties or obligations imposed by or under this Act on the person, including the payment of tax.

(2) Subject to section 58 and sub-section (5) of this section, any tax that, by virtue of sub-section (1), is payable by a representative of a registered person shall be recoverable from the representative only to the extent of any assets of the registered person that are in the possession or under the control of the representative.

(3) Every representative of a registered person who pays any tax owing by the registered person shall be entitled to recover the amount so paid from the registered person or to retain the amount so paid out of any moneys of the registered person that are in the representative’s possession or under the representative’s control.

(4) Any representative, or any person who apprehends that he may be assessed as a representative, may retain out of any money payable by him to the person on whose behalf he is liable to pay tax (hereinafter in this section referred to as the “principal”), a sum equal to his estimated liability under this Act, and in the event of disagreement between the principal and such a representative or a person as to the amount to be so retained, such representative or person may obtain from the ⁷¹⁰[Commissioner]⁷¹⁰ a certificate stating the amount to be so retained pending final determination of the tax liability, and the certificate so obtained shall be his authority for retaining that amount.

(5) Every representative shall be personally liable for the payment of any tax due by the representative in a representative capacity if, while the amount remains unpaid, the representative: –

(a) alienates, charges or disposes of any moneys received or accrued in respect of which the tax is payable; or

(b) disposes of or parts with any moneys or funds belonging to the person that is in the possession of the representative or which comes to the representative after the tax is payable, if such tax could legally have been paid from or out of such moneys or funds.

(6) Nothing in this section shall relieve any person from performing any duties imposed by or under this Act on the person which the representative of the person has failed to perform.]

⁷¹¹[58C. Inspection of audit firm ………………….
person, whose accounts are subject to audit under the Companies Act, 2017 (XIX of 2017), Chief Commissioner Inland Revenue has reason to believe that the audited accounts do not reflect the true and fair view of sales and purchases and related sales tax liability, he or she may with the approval of the Board, refer the audit firm, who has issued audit certificate to that registered person, for inspection to Audit Oversight Board.]⁷¹¹

⁷¹²[59. Tax paid on stocks acquired before registration.
– The tax ⁷¹³[...]⁷¹³ paid on goods purchased by a person who is subsequently required to be registered under section 14 due to new liabilities or levies or gets voluntary registration under ⁷¹⁴[this Act or the rules made thereunder]⁷¹⁴, shall be treated as input tax,

Provided that such goods were purchased by him from a registered person against an invoice issued under section 23 during a period of thirty days before making an application for registration and constitute his verifiable unsold stock on the date of compulsory registration or on the date of application for registration or for voluntary registration:

Provided that where a person imports goods, the tax paid by him thereon during a period of ninety days before making an application for registration shall be treated as an input tax subject to the condition that he holds the bill of entry relating to such goods and also that these are verifiable unsold or un-consumed stocks on the date of compulsory registration or on the date of application for registration or for voluntary registration.]⁷¹²

⁷¹⁵[60. Powers to deliver certain goods without payment of tax.
– Subject to such conditions, limitations or restrictions as it thinks fit to impose, ⁷¹⁶[Federal Government]⁷¹⁶ may authorise the ⁷¹⁷[import]⁷¹⁷ of goods or class of goods, without payment of the whole or any part of the tax payable thereon to the following persons, namely: –

(i) registered importers importing such goods temporarily with a view to subsequent exportation;

⁷¹⁸[(ii) registered manufacturer-cum-exporters who import raw materials and intermediary products for further manufacture of goods meant for export;]⁷¹⁸

⁷¹⁹[(iii) ***]⁷¹⁹

61. Repayment of tax in certain cases.
– Subject to such conditions, limitations or restrictions as it thinks fit to impose, the Board may authorise the repayment in whole or in part of the tax paid on ⁷²⁰[...]⁷²⁰ any goods of such class or description as it may determine, which have been used in the production, manufacture, processing, repair or refitting in Pakistan of goods of such class or description as it may determine.

⁷²¹[61A. Repayment of tax to persons registered in Azad Jammu and.
Kashmir.– Subject to such conditions, limitations or restrictions as it may deem fit to impose, the Board may authorize the repayment in whole or in part of the input tax paid on any goods acquired in or imported into Pakistan by the persons registered in Azad Jammu and Kashmir as are engaged in making of zero-rated supplies.]⁷²¹

62. Drawback allowable on re-export.--.
– When any goods which have been imported into Pakistan and on which tax has been paid on importation are re-exported outside Pakistan and such goods as are capable of being identified, seven-eighth of such tax shall, except as otherwise hereinafter provided, be repaid as drawback, and the provisions of Customs Act, 1969 (IV of 1969), relating to drawback of customs duties shall, so far as may be apply to such tax, as they apply for the purposes of that Act:

Provided that no such drawback shall be repaid unless the re-export is made within a period of two years from the date of importation as shown in the records of the Custom House:

Provided further that the Board may, on sufficient cause being shown, in any case extend the said period by a further period of one year.

63. Drawback on goods taken into use between importation and re-exportation........................................................................ ……..132.
and re-exportation.– Notwithstanding anything contained in section 62, the repayment of sales tax as drawback in respect of goods which have been taken into use between importation and re-exportation shall be subject to such orders, conditions or limitations as may be passed or imposed by the Board in each case,-

(a) modifying the amount of tax which shall be repaid as drawback on any such goods or class of goods; or

(b) prohibiting the repayment of tax as drawback on any such goods or class of such goods; or

(c) varying the condition for the grant of drawback on any such goods or class of such goods by restricting the period after importation within which the goods must be re-exported.

64. Power to declare what goods are identifiable and to prohibit drawback in case of specified foreign territory................. ……..133.
prohibit drawback in case of specified foreign territory.– The Federal Government may, from time to time, by notification in the official Gazette, prohibit the payment of drawback upon the exportation of goods or any specified goods or class of goods to any specified foreign port or territory.

65. Exemption of tax not levied or short levied as a result of general practice.............................................................................. ……..133.
general practice.– Notwithstanding anything contained in this Act, if in respect of any supply the ⁷²²[Federal Government]⁷²² is satisfied that inadvertently and as a general practice: –

(a) tax has not been charged in any area on any supply which was otherwise taxable, or according to the said practice the amount charged was less than the amount that should have actually been charged;

(b) the registered person did not recover any tax prior to the date it was discovered that the supply was liable to tax; and

(c) the registered person started paying the tax from the date when it was found that the supply was chargeable to tax;

It may, by a notification in the official Gazette, direct that the tax not levied or short levied as a result of that inadvertent practice, shall not be required to be paid for the period prior to the discovery of such inadvertent practice.

66. Refund to be claimed within one year.
– No refund of tax claimed to have been paid or over paid through inadvertence, error or misconstruction ⁷²³[or refund on account of input adjustment not claimed within the relevant tax period, ]⁷²³ shall be allowed, unless the claim is made within one year of the date of payment ⁷²⁴[:]⁷²⁴

⁷²⁵[Provided that in a case where a registered person did not deduct input tax within the relevant tax period, the ⁷²⁶[Commissioner]⁷²⁶ may, after satisfying himself that input tax adjustment is due and admissible, allow the registered person to take such adjustment in the tax period as specified by the 4[Commissioner]:]⁷²⁵

⁷²⁷[ Provided ⁷²⁸[further]⁷²⁸ that in a case where the refund has become due on account of any decision or judgement of any officer of ⁷²⁹[Inland Revenue]⁷²⁹ or court or the Tribunal, the period of one year shall be reckoned from the date of judgement or decision of such officer, court or Tribunal ⁷³⁰[:]⁷³⁰]⁷²⁷

Provided further that the application or claim filed under this section shall be disposed of within a period not exceeding ninety days from the date of filing of such application or claim.]

⁷³¹[Provided also that no refund shall be admissible under this section if incidence of tax has been passed directly or indirectly to the consumer.]⁷³¹

⁷³²[67. Delayed Refund.
– Where a refund due under section 10 is not made within ⁷³³[the time specified in section 10 from the date]⁷³³ of filling of ⁷³⁴[refund claim]⁷³⁴, there shall be paid to the claimant in addition to the amount of refund due to him, a further sum equal to ⁷³⁵[KIBOR]⁷³⁵ per annum of the amount of refund due, from the date following the expiry of [the time specified ⁷³⁶[as aforesaid], to the day preceding the day of payment of refund:

Provided that where there is reason to believe that a person has claimed the refund which is not admissible to him, the provision regarding the payment of such additional amount shall not apply till the investigation of the claim is completed and the claim is either accepted or rejected 7[:]

⁷³⁷[Provided further that where a refund due in the consequence of any order passed under section 66 is not made within forty five days of date of such order, there shall be paid to the claimant in addition to the amount of the refund due to him, a further sum equal to KIBOR per annum of the amount of refund, due from the date of the refund order.]⁷³⁷

⁷³⁸[67A. Payment of refund through sales tax refund bonds.
(1) Notwithstanding anything contained in section 67, the sales tax refunds payable under this Act may also be paid through sales tax refund bonds to be issued by FBR Refund Settlement Company ⁷³⁹[ ]⁷³⁹ Limited, in book-entry form through an establishment licensed by the Securities and Exchange Commission of Pakistan as a central depository under the Securities Act, 2015, (111 of 2015), in lieu of payment to be made through issuance of cheques or bank debit advice.

(2) The Board shall issue a promissory note to FBR Refund Settlement Company ⁷⁴⁰[ ]⁷⁴⁰ Limited, hereinafter referred to as the company, incorporating the details of refund claimants and the amount of refund determined as payable to each for issuance of sales tax refund bonds, hereinafter referred to as the bonds, of the same amount.

(3) The bonds shall be issued in values in multiples of one hundred thousand rupees.

(4) The bonds so issued shall have a maturity period of three years and shall bear annual simple profit at ten per cent.

(5) The bonds shall be traded freely in the country’s secondary markets.

(6) The bonds shall be approved security for calculating the statutory liquidity reserve.

(7) The bonds shall be accepted by the banks as collateral.

(8) There shall be no compulsory deduction of Zakat against the bonds and Sahib-e-Nisab may pay Zakat voluntarily according to Shariah.

(9) After period of maturity, the company shall return the promissory note to the Board and the Board shall make the payment of amount due under the bonds, along with profit due, to the bond holders.

(10) The bonds shall be redeemable in the manner as in the preceding sub-section before maturity only at the option of the Board along with simple profit payable at the time of redemption in the light of general or specific policy to be formulated by the Board.

(11) The refund under sub-section (1) shall be paid in the aforesaid manner to the claimants who opt for payment in such manner.

(12) The ⁷⁴¹[Board, with the approval of the Federal Minister-in-charge,]⁷⁴¹ may notify procedure to regulate the issuance, redemption and other matters relating to the bonds, as may be required.]⁷³⁸

68. Liability of the registered person for the acts of his agent.
– When any person is expressly or impliedly authorised by a registered person to be his agent for all or any of the purposes of this Act, the registered person shall be responsible for the act done by his agent.

⁷⁴²[69. Issuance of duplicate of sales tax documents.
– An officer of ⁷⁴³[Inland Revenue not below the rank of Assistant Commissioner]⁷⁴³ may, on payment of one hundred rupees, issue an attested duplicate of any sales tax document as is available with the department or has been filed under this Act or rules made thereunder to a relevant registered person applying for the same.]⁷⁴²

70. Computation of limitation period.
– In computing the period of limitation prescribed for any appeal or application under this Act, the day on which the order complained of was served and, if the concerned person was not furnished with a copy of the order, the time requisite for obtaining a copy of such order shall be excluded.

⁷⁴⁴[71. Special procedure.– ⁷⁴⁵[(1)]^{745 746}[The Board]⁷⁴⁶ may, by.
– ⁷⁴⁵[(1)]^{745 746}[The Board]⁷⁴⁶ may, by notification in the official Gazette, prescribe special procedure for scope and payment of tax, registration, book keeping and invoicing requirements and returns, etc. in respect of such supplies as may be specified therein.]⁷⁴⁴

⁷⁴⁷[(2) ***]⁷⁴⁷

⁷⁴⁸[(3) Notwithstanding anything contained in this Act or any other law for the time being in force or any decision of any court, the trade enrolment Certificate Schemes immediately in force before the commencement of the Finance Act, 1999, shall be deemed to be validly made under this Act.]⁷⁴⁸

⁷⁴⁹[72. Officers of ⁷⁵⁰[Sales Tax]⁷⁵⁰ to follow Board's orders, etc.– All.
officers of ⁷⁵¹[Inland Revenue]⁷⁵¹ and other persons employed in the execution of this Act shall observe and follow the orders, instructions and directions of the Board:

Provided that no such orders, instructions or directions shall be given so as to interfere with the discretion of [officers of 6[Inland Revenue] in the exercise of their quasi-judicial functions.]

⁷⁵²[72A. Reference to the authorities.
– Any reference to the Collector, Additional Collector, Deputy Collector, Assistant Collector, Superintendent, Senior Auditor and an officer of Sales Tax wherever occur in this Act and rules, notifications, clarifications general orders or order made or issued there under, shall be construed as reference to the Commissioner Inland Revenue, Additional Commissioner Inland Revenue,” Deputy Commissioner Inland Revenue, Assistant Commissioner Inland Revenue, Superintendent Inland Revenue, Inland Revenue Audit Officer and an officer of Inland Revenue, respectively.]⁷⁵²

⁷⁵³[72B. Selection of audit by the Board.
– (1) The Board may select persons or classes of persons for audit of tax affairs through computer ballot which may be random or parametric as the Board may deem fit.

⁷⁵⁴[(1A) Notwithstanding anything contained in this Act or any other law, for the time being in force, the Board shall keep the selection parameters confidential.]⁷⁵⁴

(2) Audit of tax affairs of persons selected under sub-section (1) shall be conducted as per procedure given in section 25 and all the provisions of this Act shall apply accordingly.

(3) For the removal of doubt, it is hereby declared that the Board shall be deemed always to have had, the power to select any persons or classes of persons for audit of tax affairs under this section.]⁷⁵³

⁷⁵⁵[72C. Reward to Inland Revenue Officers and Officials.
– (1) In cases involving concealment or evasion of sales tax and other taxes, cash reward shall be sanctioned to the officers and officials of Inland Revenue for their meritorious conduct in such cases and to the informer providing credible information leading to such detection, as may be prescribed by the Board, only after realization of part or whole of a taxes involve in such cases.

(2) The Board may, by notification in the official Gazette, prescribed the procedure in this behalf and specify the apportionment of reward sanctioned under this section for individual performance or to collective welfare of the officers and officials of Inland Revenue.]⁷⁵⁵

⁷⁵⁶[72D. Reward to whistleblowers.
(1) The Board may sanction reward to whistleblowers in cases of concealment or evasion of tax, tax fraud, corruption or misconduct providing credible information leading to such detection of evasion of tax fraud.

(2) The Board may, by notification in the official Gazette, prescribe the procedure in this behalf and also specify the apportionment of reward sanctioned under this section for whistleblowers.

(3) The claim for reward by the whistleblower shall be rejected, if-

(a) the information provided is of no value;

(b) the Board already had the information;

(c) the information was available in public records; or

(d) no collection of taxes is made from the information provided from which the Board can pay the reward.

(4) For the purpose of this section, “whistleblower” means a person who reports concealment or evasion of sales tax and tax fraud leading to detection or collection of taxes, fraud, corruption or misconduct, to the competent authority having power to take action against the person or a sales tax authority committing fraud, corruption, misconduct, or involved in concealment or evasion of taxes.]⁷⁵⁶

⁷⁵⁷[73. Certain transactions not admissible.
– (1) Notwithstanding anything contained in this Act or any other law for the time being in force, payment of the amount for a transaction exceeding value of fifty thousand rupees ⁷⁵⁸[in aggregate to a single supplier in a tax period]⁷⁵⁸, excluding payment against a utility bill, shall be made by a crossed cheque drawn on a bank or by crossed bank draft or crossed pay order or any other crossed banking instrument showing transfer of the amount of the sales tax invoice in favour of the supplier from the business bank account of the buyer ⁷⁵⁹[:]⁷⁵⁹

⁷⁶⁰[Provided that online transfer of payment from the business account of buyer to the business account of supplier as well as payments through credit card shall be treated as transactions through the banking channel, subject to the condition that such transactions are verifiable from the bank statements of the respective buyer and the supplier.]⁷⁶⁰

⁷⁶¹[Provided further that adjustments made by a registered person in respect of amounts payable and receivable to and from the same party shall be treated as payments satisfying the provisions of this sub-section subject to following conditions, namely:–

(a) sales tax has been charged and paid by both parties under the relevant provisions of this Act and rules prescribed thereunder, wherever applicable; and

(b) the registered person has sought prior approval of the Commissioner before making such adjustments.]⁷⁶¹

(2) The buyer shall not be entitled to claim input tax credit, adjustment or deduction, or refund, repayment or draw-back or zero-rating of tax under this Act if payment for the amount is made otherwise than in the manner prescribed in sub-section (1),

Provided that payment in case of a transaction on credit is so transferred within one hundred and eighty days of issuance of the tax invoice.

(3) The amount transferred in terms of this section shall be deposited in the business bank account of the supplier, otherwise the supplier shall not be entitled to claim input tax credit, adjustment or deduction, or refund, repayment or draw-back or zero-rating of tax under this Act.

Explanation— For the purpose of this section, the term “business bank account” shall mean a bank account utilized by the registered person for business transactions, declared to the ⁷⁶²[Commissioner]⁷⁶² in whose jurisdiction he is registered ⁷⁶³[through Form STR-1 or change of particulars in registration database.]⁷⁶³]⁷⁵⁷

⁷⁶⁴[“(4) A registered ⁷⁶⁵[person]⁷⁶⁵ shall not be entitled to deduct input tax (credit adjustment or deduction of input tax) which is attributable to such taxable supplies exceeding, in aggregate, ⁷⁶⁶[the amount in a financial year or in a tax period, as may be prescribed by the Board, with the approval of Federal Government]⁷⁶⁶ as are made to certain person who is not a registered person under this Act:

Provided that the aforesaid shall not apply to supplies made to.-

(a) Federal / provincial / local Government departments, authorities, etc. not engaged in making of taxable supplies;

(b) Foreign Missions, diplomats and privileged persons; ⁷⁶⁷[***]⁷⁶⁷

(c) all other persons not engaged in supply of taxable goods; 4[and] ⁷⁶⁸(d) persons or classes of person, specified by the Board through notification in the official Gazette subject to such conditions and restrictions as may be specified therein.]⁷⁶⁴

⁷⁶⁹[74. Condonation of time-limit.
– Where any time or period has been specified under any of the provisions of the Act or rules made there under within which any application is to be made or any act or thing is to be done, the ⁷⁷⁰[Board]⁷⁷⁰ may, ⁷⁷¹[at any time before or after the expiry of such time or period,]⁷⁷¹ in any case or class of cases, permit such application to be made or such act or thing to be done within such time or period as it may consider appropriate [:]

Provided that the Board may, by notification in the official Gazette, and subject to such limitations or conditions as may be specified therein, empower any [Commissioner] to exercise the powers under this section in any case or class of cases ⁷⁷²[:

Provided further that regardless of anything stipulated in this section, or any provision of this Act, or any other applicable law currently in force, and notwithstanding any decision, order or judgement issued by any forum, authority or court, the maximum period of extension under this section by the Board or the Commissioner, as the case may be, shall not exceed two years in aggregate:

Provided also that where there are reasons to believe that significant loss to exchequer or taxpayer has been caused by an act of omission or commission by the registered person or by any authority mentioned in section 30, a committee of members as notified by the Board may further condone the limitation specified for a period as it may deem fit, after providing a reasonable opportunity of being heard to the registered person concerned.

Explanation.– For the purpose of this section, the expression “any act or thing is to be done” includes any act or thing to be done by the registered person or by the authorities specified in section 30 of this Act.]⁷⁷²

⁷⁷³[74A. Validation.– ⁷⁷⁴[(1) All notifications and orders issued and.
– ⁷⁷⁴[(1) All notifications and orders issued and notified in exercise of the powers conferred upon the Federal Government, before the commencement of Finance Act, ⁷⁷⁵[2018]⁷⁷⁵ shall be deemed to have been validly issued and notified in exercise of those powers.]⁷⁷⁴

⁷⁷⁶[(2) Notwithstanding any omission, irregularity or deficiency in the establishment of or conferment of powers and functions on the Directorate General (Intelligence and Investigation), Inland Revenue and authorities specified in section 30A, all orders passed, notices issued and actions taken, before commencement of the Finance Act, 2018, in exercise or purported exercise of the powers and functions of the officers of Inland Revenue under this Act by the Director General (Intelligence and Investigation), Inland Revenue or the authorities specified in section 30A shall be deemed to have been validly passed, issued and taken under this Act.]⁷⁷⁶

75. Application of the provisions of Act IV of 1969 to Sales Tax….142.
Tax.– The Federal Government may, by notification in the official Gazette, declare that any of the provision of the Customs Act, 1969 (IV of 1969), relating to the levy of, and exemption from, customs duties, draw-back of duty, warehousing, confiscation, and procedure relating to offences and appeals shall, with such modifications and alterations as it may consider necessary or desirable to adapt them to the circumstances, be applicable in regard to like matters in respect of the tax imposed by section 3.]

⁷⁷⁷[76. Fee and service charges.– 3[(1)] The ⁷⁷⁸[“Board with approval.
– 3[(1)] The ⁷⁷⁸[“Board with approval of the Federal Minister-in-charge”]⁷⁷⁸ may, by notification in the official Gazette, subject to such conditions, limitations or restrictions as it may deem fit to impose, levy fee and service charges for valuation, in respect of any other service or control mechanism provided by any formation under the control of the Board, including ventures of public-private partnership, at such rates as may be specified in the notification.]⁷⁷⁸

⁷⁷⁹[(2) The Board may authorize and prescribe the manner in which fee and service charges collected under sub-section (1) shall be expended.]⁷⁷⁹

⁷⁸⁶[77. Uniform…………….
Gazette, prescribe rules for wearing of uniform by officers and staff of Inland Revenue Services.]⁷⁸⁶

***************

SCHEDULES

The

FIRST SCHEDULE

⁷⁸⁷[***]⁷⁸⁷

The

SECOND SCHEDULE

⁷⁸⁸[***]⁷⁸⁸

⁷⁸⁹[The

THIRD SCHEDULE

See ⁷⁹⁰[clause (a)]⁷⁹⁰ of sub-section (2) of section 3]

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Note: Where the Federal Government has notified that the sales tax shall be charged, levied and paid at a rate higher than eighteen percent, the same rate shall continue to be charged, levied and paid after their inclusion under the Third Schedule.]

The

FOURTH SCHEDULE

⁸¹⁶[***]⁸¹⁶

⁸¹⁹[The

FIFTH SCHEDULE

[See section 4]

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⁸⁵¹[The

SIXTH SCHEDULE

[See section 13(1)]

Table-1 (Imports or Supplies)

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Narcotics Control, subject to the approval by the Federal Government.

¹⁰⁰⁸[Annex-I [See serial No. 100A & 100B]

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NOTE 1.– Before certifying, the authorized officer of the Ministry of Ports and Shipping shall ensure that the goods are genuine and bona fide requirement for construction and operation of Gwadar Port and development of Free Zone for Gwadar Port. Signature— Designation —

NOTE 2.– In case of clearance through Pakistan Customs Computerized System, the above information shall be furnished online against a specific user I.D. and password obtained under section 155D of the Customs Act, 1969 (IV of 1969).

¹⁰⁰⁹[Annex-A [See condition 145(iii)]

INDEMNITY BOND

(On appropriately stamped non-judicial paper) THIS DEED OF INDEMNITY is made on the — date of —BETWEEN Messrs— having registered office at —(hereinafter called "the importers" which means and includes their successors, administrators, executors and assignees) of the one part, AND the President of Pakistan through the Collector of Customs — (hereinafter called the "Collector of Customs"), of the other part.

WHEREAS the Federal Government, by its decision contained in serial number 145 or serial number 148 of this table, as the case may be, and subject to the conditions given in the said serial number 145 or serial number 148 of this table, as the case may be, has been pleased to direct that such equipment and construction machinery, as are not manufactured locally, shall be exempt from the whole of sales tax leviable thereon, in accordance with the said serial number 145 or serial number 148 of this table, as the case may be, if imported for:-

(i) construction of Sukkur – Multan Section (392.0 km) of Karachi – Peshawar Motorway or

(ii) for the construction of Karakorum Highway (KKH) Phase-II - Thakot to Havellian Section (118.057 km).

AND WHEREAS M/S.— having registered office at — (hereinafter called the importers) have imported the equipment and/or construction machinery mentioned in the said serial number 145 or serial number 148 for purposes of construction of above mentioned project(s) in accordance with the conditions given in the said serial number 145 or serial number 148 of this table, as the case may be; NOW, THEREFORE, in consideration of the release of the equipment and/or construction machinery without recovery of leviable sales tax, the importers bind themselves to pay on demand to the Government of Pakistan the sum of Rs. — being the sales tax and charges leviable on the machinery, if the importers fail to fulfill the condition (vi) or (vii) or (viii) of the said serial number 145 or serial number 148 of this table, as the case may be.

The importers further agree and bind themselves that the amount covered by this Bond shall be recovered as arrears of sales tax under section 202 of the Customs Act, 1969. This Bond shall become void when the Collector of Customs is satisfied that the importers have fulfilled all the conditions of the said serial number 145 or serial number 148 of this table, as the case may be. Signed by importers on this — day of —201_.

Managing Director (Name and permanent address) Collector of Customs (On behalf of President) Witness— (signature, name, designation and full address) Witness— (signature, name, designation and full address)

Note: The bond shall be written on appropriate non-judicial stamp paper and shall be witnessed by a Government servant in BPS 17 or above, an Oath Commissioner, a Notary Public or an officer of a Schedule Bank.

Annex-B [See condition 145 (iv) and (v)]

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CERTIFICATE BY THE AUTHORIZED OFFICER OF REGULATORY AUTHORITY:

It is hereby certified that the description, quantity and other details mentioned above are true and correct. Goods imported are in commensuration with the project requirement and are bona fide requirement of the project. It is further certified that the above items shall not be used for any other purpose except for the project.

Signature: — Name & Designation: — Official Stamp: — Date: —

Note: -For the purposes of this serial number 145, the expression "not manufactured locally" shall mean the goods which are not listed in the locally manufactured items in the Customs General Order issued by the Federal Board of Revenue from time to time.

Annex-C [See condition 146(b)]

INDEMNITY BOND

(On appropriately stamp non-judicial paper attested by a Government servant in BPS 17 or above, an Oath Commissioner, a Notary Public or an officer of a Scheduled Bank)

THIS DEED OF INDEMNITY is made on the — date of —BETWEEN Messrs— having registered office at — (hereinafter called "the importers" which means and includes their successors, administrators, executors and assignees) of the one part, AND the President of the Islamic Republic of Pakistan through the Collector of Customs — (hereinafter called the "Collector of Customs"), of the other part.

WHEREAS the Federal Government, by its decision contained in serial number 146 and subject to the conditions given in the said serial number 146, has been pleased to direct that such equipment shall be exempt from the whole of sales tax leviable thereon, in accordance with the said serial number 146, if imported for Lahore Orange Line Metro Train Project.

AND WHEREAS M/S.—, the importers have imported the equipment mentioned in the said serial number 146 for the above mentioned project in accordance with the conditions given in the said serial number 146;

NOW, THEREFORE, in consideration of the release of the equipment without recovery of leviable sales tax, the importers bind themselves to pay on demand to the Government of Pakistan the sum of Rs. — being the sales tax and charges leviable on the equipment, if the importers fail to fulfill the condition (f) or (g) or (h) of the said serial number 146, as the case may be.

The importers further agree and bind themselves that the amount covered by this Indemnity Bond shall be recovered as arrears of sales tax under section 202 of the Customs Act, 1969. This Bond shall stand revoked automatically when the Collector of Customs is satisfied that the importers have fulfilled all the conditions of the said serial number 146.

Signed by importers on this — day of —201_.

Managing Director or person next in hierarchy duly authorized by MD

(Name and permanent address) Collector of Customs (On behalf of President)

Witness(1)— (signature, name, designation and full address) Witness(2)— (signature, name, designation and full address)

Annex-D [See conditions 146 (c) and (e)]

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CERTIFICATE BY THE AUTHORIZED OFFICER OF REGULATORY

AUTHORITY:

It is hereby certified that the description, quantity and other details mentioned above are true and correct. Goods imported are in commensuration with the project requirements and are bona fide requirement of the Project under the Contract. It is further certified that the above items shall not be used for any other purpose except for the Project.

Signature: — Name and Designation: — Official Stamp: — Date: —”]¹⁰⁰⁹

Table-2 (Local Supplies only)

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Notes:--

1. For the purpose of this Schedule, for entries against which classification of headings or sub-headings has been specified, exemption shall be admissible on the basis of description of goods as mentioned in column 2 of the Schedule Pakistan Customs Tariff classification of headings is provided for ease of reference and commodity classification purposes only.

2. For the purposes of determining classification of any goods, the general rules for interpretation of the First Schedule to the Customs Act, 1969 (IV of 1969) and Explanatory Notes to the Harmonized Commodity Description and Coding System (relevant version) as amended from time to time shall be considered authentic source of interpretation.

3. For the purposes of exemption of sales tax under serial numbers 46, 47, 49, 50, 51, 52, 53, 56, 57, 59, 60 and 62 of this Schedule, the definitions, restrictions, limitations, conditions and procedures and all the provisions of Chapter 99 of the First Schedule to the Customs Act, 1969 (IV of 1969), for the purposes of applying zero-rate of customs duty shall, mutatis mutandis, apply and shall be deemed and construed to be part of this Schedule.

TABLE-3

The plant, machinery, equipment and apparatus, including capital goods, specified in column (2) of the Annexure below, falling under the HS Codes specified in column (3) of that Annexure, shall be exempt from the whole of Sales tax, subject to the following conditions, besides the conditions specified in column (4) of the Annexure, namely:-

(i) The imported goods as are not listed in the locally manufactured items, notified through a Customs General Order issued by the Board from time to time or, as the case may be, certified as such by the Engineering Development Board.

(ii) except for S. No. 9, 14, ¹⁰⁴⁸[14A and 15]¹⁰⁴⁸ of the Annexure, the Chief Executive, or the person next in hierarchy duly authorized by the Chief Executive or Head of the importing company shall certify in the prescribed manner and format as per Annex-A that the imported items are the company’s bona fide requirement. He shall furnish all relevant information online to Pakistan Customs Computerized System against a specific user ID and password obtained under section 155D of the Customs Act, 1969. In already computerized Collectorates or Customs stations where the Pakistan Customs Computerized System is not operational, the Project Director or any other person authorized by the Collector in this behalf shall enter the requisite information in the Pakistan Customs Computerized System on daily basis, whereas entry of the data obtained from the customs stations which have not yet been computerized shall be made on weekly basis; and

(iii) in case of partial shipments of machinery and equipment for setting up a plant, the importer shall, at the time of arrival of first partial shipment, furnish complete details of the machinery, equipment and components required for the complete plant, duly supported by the contract, layout plan and drawings:

Explanation.- For the purpose of Table-3, capital goods mean any plant, machinery, equipment, spares and accessories, classified in Chapters 84, 85 or any other chapter of the Pakistan Customs Tariff, required for-

(a) the manufacture or production of any goods and includes refractory bricks and materials required for setting up a furnace, catalysts, machine tools, packaging machinery and equipment, refrigeration equipment, power generating sets and equipment, instruments for testing, research and development, quality control, pollution control and the like; or

(b) used in mining, agriculture, fisheries, animal husbandry, floriculture, horticulture, livestock, dairy and poultry industry.

ANNEXURE

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obtained under section 155D of the Customs Act, 1969.]¹⁰⁶⁰

¹⁰⁶¹[“Annex-A

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CERTIFICATE. It is certified that the description and quantity mentioned above are commensurate with the project requirement and that the same are not manufactured locally. It is further certified that the above items shall not be used for any other purpose.

Signature of Chief Executive, or the person next in hierarchy duly authorized by the Chief Executive Name — N.I.C. No. —

NOTE:- In case of clearance through Pakistan Customs Computerized System, the above information shall be furnished online against a specific user I.D. and password obtained under section 155D of the Customs Act, 1969.

Explanation.–

Chief Executive means.– 1. owner of the firm, in case of sole proprietorship; or 2. partner of firm having major share, in case of partnership firm; or 3. Director, in case of private limited company; or 4. Chief Executive Officer or the Managing Director in case of limited company or multinational organization; or 5. Principal Officer in case of a foreign company.]¹⁰⁶¹

¹⁰⁶²[Annex-B

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CERTIFICATE Before certifying the above-authorized officer of the Regulatory Authority shall ensure that the goods are genuine and bona fide requirement of the project and that the same are not manufactured locally.

Signature — Designation —

NOTE:- In case of clearance through Pakistan Customs Computerized System, the above information shall be furnished online against a specific user I.D. and password obtained under section 155D of the Customs Act, 1969.

¹⁰⁶³[Table-4

The goods specified in column (2) of the Annexure below falling under the PCT codes specified in column (3) of the said Annexure, when supplied within the limits of the Border Sustenance Markets, established in cooperation with Iran and Afghanistan, shall be exempted from the whole of the sales tax, subject to the following conditions, namely:–

(i) Such goods shall be supplied only within the limits of Border Sustenance Markets established in cooperation with Iran and Afghanistan;

(ii) If the goods, on which exemption under this Table has been availed, are brought outside the limits of such markets, sales tax shall be charged on the value assessed on the goods declaration import or the fair market value, whichever is higher;

(iii) Such items in case of import, shall be allowed clearance by the Customs Authorities subject to furnishing of bank guarantee equal to the amount of sales tax involved and the same shall be released after presentation of consumption certificate issued by the Commissioner Inland Revenue having jurisdiction;

(iv) The said exemption shall only be available to a person upon furnishing proof of having a functional business premises located within limits of the Border Sustenance Markets; and

(v) Breach of any of the conditions specified herein shall attract relevant legal provisions of this Act, besides recovery of the amount of sales tax alongwith default surcharge and penalties involved.

Annexure

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the First Schedule 7 Cucumbers and gherkins fresh or chilled 0707.0000

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38 Crushed or ground (Seeds of Cumins) 0909.3200

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67 Other (spice) 0910.9990

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96 Of Wheat (Flour) 1101.0010

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The

SEVENTH SCHEDULE

¹⁰⁶⁶[***]¹⁰⁶⁶

¹⁰⁶⁷[The

EIGHTH SCHEDULE

[See clause (aa) of sub-section (2) of section 3]

Table-1

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assembled in modules or made up into panels

1030[Table-2 ***]

Annex-A

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CERTIFICATE. It is certified that the description and quantity mentioned above are commensurate with the project requirement and that the same are not manufactured locally. It is further certified that the above items shall not be used for any other purpose.

Signature of Chief Executive, or the person next in hierarchy duly authorized by the Chief Executive Name — N.I.C. No. —

NOTE:-- In case of clearance through Pakistan Customs Computerized System, the above information shall be furnished online against a specific user I.D. and password obtained under section 155D of the Customs Act, 1969.

Explanation.—

Chief Executive means.—

1. owner of the firm, in case of sole proprietorship; or 2. partner of firm having major share, in case of partnership firm; or 3. Chief Executive Officer or the Managing Director in case of limited company or multinational organization; or 4. Principal Officer in case of a foreign company.

Annex-B

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CERTIFICATE. Before certifying the above-authorized officer of the Regulatory Authority shall ensure that the goods are genuine and bona fide requirement of the project and that the same are not manufactured locally. Signature — Designation —

NOTE:-- In case of clearance through Pakistan Customs Computerized System, the above information shall be furnished online against a specific user I.D. and password obtained under section 155D of the Customs Act, 1969.

[The 1031

NINTH SCHEDULE

[See sub-section (3B) of section 3]

1032[Table-I

Sales Tax on supply (payable at the time of supply by CMOs):

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1033[Provided that the provisions of Table-I shall not be applicable from 1st July, 2020 onwards.

Explanation.– For removal of doubt, it is clarified that the above amendment in law shall not prejudicially affect, the Board’s stance or position in pending cases on the issue of chargeability of sales tax on SIM cards before any court of law.]

1034[Table-II

Cellular mobile phones in CKD/CBU form:

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LIABILITY, PROCEDURE AND CONDITIONS

[(i) The liability to pay the tax on the goods specified in this Schedule shall be–

(a) in case of the goods specified in Table-I, of the Cellular Mobile Operator (CMO);

(b) in case of goods specified in columns (3) and (4) of Table-II, of the importer; and

(c) in case of goods specified in column (5) of Table-II, of the local manufacturers of the goods.

(ii) The time of payment of tax due under this Schedule shall be the same as specified in section 6;

1035[(iii), (iv) and (v).]

1036[(vi) An individual liable to pay tax on imported mobile phone device through Device Identification, Registration and Blocking System of Pakistan Telecommunication Authority, may be allowed to pay tax in instalments as may be prescribed, subject to the condition that all the instalments shall be paid before the end of the financial year in which the import is made.]

1037[The

TENTH SCHEDULE

[See sub-section (1B) of section 3]

1038[(1)]The tax on bricks, falling in PCT heading 1039[6901.0000], shall be paid on fixed basis, 1040[ ] at the rates specified in Table below:–

TABLE

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1041[(2) Tax on cement or concrete blocks falling in PCT heading 6810.1100, shall be charged on fixed basis as per the following Table, namely:-

TABLE

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Note: No input tax adjustment shall be allowed against the tax paid under this Schedule.]

1042[The

ELEVENTH SCHEDULE

[See sub-section (7) 1043and (7A) of section 3]

TABLE

The rates for withholding or deduction by the withholding agents 1044[are specified as below

Provided that withholding of tax under this Schedule shall not be applicable to the goods and supplies specified vide clauses 1045[***] after the Table]

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(i) Electrical energy;

(ii) Natural Gas;

(iii) Petroleum Products as supplied by petroleum production and exploration companies, oil refineries, oil marketing companies and dealers of motor spirit and high speed diesel;

(iv) Vegetable ghee and cooking oil;

(v) Telecommunication services;

(vi) Goods specified in the Third Schedule to the Sales Tax Act, 1990;

(vii) Supplies made by importers who paid value addition tax on such goods at the time of import;

(viii) 1055[Supplies made by an Active Taxpayer as defined in the Sales Tax Act, 1990 to another registered person with the exception of supplies referred to in S. Nos. 5, 7, 9, 10, 11, 12 and 13 of the Table]; and

1056[(ix) Supply of sand, stone, gravel/crush and clay to low cost housing schemes sponsored or approved by Naya Pakistan Housing and Development Authority.]

1057[The

TWELFTH SCHEDULE

[See sub-section (2) of section 7A]

TABLE

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Procedure and conditions:–

(1) The sales tax on account of minimum value addition as payable under this Schedule (hereinafter referred to as value addition tax), shall be levied and collected at import stage from the importers on all taxable goods as are chargeable to tax under section 3 of the Act or any notification issued thereunder at the rate specified in the Table in addition to the tax chargeable under section 3 of the Act or a notification issued thereunder:

(2) The value addition tax under this Schedule shall not be charged on,—

1058[(i) Raw materials and intermediary goods imported by a manufacturer for in-house consumption 1059[excluding compressor scrap (PCT heading 7204.4940), motor scrap (PCT heading 7204.4990) and copper cable cutting scrap (PCT heading 7404.0090)] 1060[;

Provided that the manufacturer shall, apart from any other liability that he may incur under the Act, be liable to pay 3% value addition tax of imports on an ad valorem basis, along with default surcharge, in case the imported goods are supplied in the same state whether in the same packing, repacked, or in bulk;]

(ii) The petroleum products falling in Chapter 27 of Pakistan Customs Tariff as imported by a licensed Oil Marketing Company for sale in the country;

(iii) Registered service providers importing goods for their in-house business use for furtherance of their taxable activity and not intended for further supply;

(iv) Cellular mobile phones or satellite phones 1061[(PCT headings 8517.1419, 8517.1430 and 8517.1390)];

(v) LNG / RLNG;

(vi) Second hand and worn clothing or footwear (PCT Heading 6309.000);

(vii) Gold, in un-worked condition; 1062[***]

(viii) Silver, in un-worked condition;

(ix) 1063[The goods as specified in the Third Schedule on which tax is paid on retail price basis.1064[;and

1065[(x) plant, machinery and equipment falling in Chapters 84 and 85 of the First Schedule to the Customs Act, 1969 (IV of 1969), as are imported by a manufacturer for in-house installation or use.

1066[(xi) Electric vehicles (4 wheelers) CKD kits for small cars/SUVs, with 50 kwh battery or below and LCVs with 150 kwh battery of below till 30th June, 2026;

(xii) Electric vehicles (4 wheelers) small cars/SUVs, with 50 kwh battery or below and LCVs with 150 kwh battery of below in CBU condition till 30th June, 2026”;

(xiii) Electric vehicles (2-3 wheelers and heavy commercial vehicles) in CBU condition till 30th June, 2025; and

(xiv) motor cars of cylinder capacity upto 850cc]

(3) The value addition tax paid at import stage shall form part of input tax, and the importer shall deduct the same from the output tax due for the tax period, subject to limitations and restrictions under the Act, for determining his net liability. The excess of input tax over output tax shall be carried forwarded to the next tax period as provided in section 10 of the Act.

1067[“(4) The refund of excess input tax over output tax, which is attributable to tax paid under this Schedule, shall not be refunded to a registered person in any case, except that as used for making of zero-rated supplies.”]

(5) The registered person, if also dealing in goods other than imported goods, shall be entitled to file refund claim of excess carried forward input tax for a period as provided in section 10 or in a notification issued there under by the Board after deducting the amount attributable to the tax paid at import stage i.e. sum of amounts paid during the claim period and brought forward to claim period. Such deducted amount may be carried forward to subsequent tax period.]

1068[(6) The rate of minimum value addition tax shall be 1% in the case of import of coal, subject to the conditions that such imported coal is exclusively and directly supplied to Independent Power Producers.]

THIRTEENTH SCHEDULE”

(Minimum Production) [See sub-section (9AA) of section 3] Minimum production of steel products.—

The minimum production for steel products shall be determined as per criterion specified against each in the Table below:

TABLE

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Procedure and conditions:–

(i) both actual and minimum production and the local supplies shall be declared in the monthly return. In case, the minimum production exceeds actual supplies for the month, the liability to pay tax shall be discharged on the basis of minimum production:

Provided that in case, in a subsequent month, the actual supplies exceed the minimum production, the registered person shall be entitled to get adjustment of excess tax on account of excess of minimum production over actual supplies:

Provided further that in a full year, as per financial year of the company or registered person, or period starting from July to June of next year, in other cases, the tax actually paid shall not be less than the liability determined on the basis of minimum production for that year and in case of excess payment no refund shall be admissible:

Provided also that in case of ship-breaking, the liability against minimum production, or actual supplies, whichever is higher, shall be deposited on monthly basis on proportionate basis depending upon the time required to break the vessel;

(ii) the payment of tax on ship plates in aforesaid manner does not absolve ship breakers of any tax liability in respect of items other than ship plates obtained by ship-breaking;

(iii) the melters and re-rollers employing self-generated power shall install a tamperproof meter for measuring their consumption. Such meter shall be duly locked in room with keys in the custody of a nominee of the Commissioner Inland Revenue having jurisdiction. The officers Inland Revenue having jurisdiction shall have full access to such meter;

(iv) the minimum production of industrial units employing both distributed power and self-generated power shall be determined on the basis of total electricity consumption.]

********* PCPPI—4310(19) FBR—19-09-2019—2000.