ISLAMABAD: The Federal Board of Revenue (FBR) has decided to allow importers to reclassify their imported goods under the reclassification procedure for applicability of reduced rate of taxes.
The FBR has issued draft amendments in the Income Tax Rules, 2002 through a notification issued here on Thursday.
According to the reclassification procedure, the provisions shall apply to addition, omission or amendment of entries in the Twelfth Schedule and application of reduced rate on goods falling under Part-ll of said schedule imported by persons as raw material for its own use.
A taxpayer being an importer of a goods may apply to the Board to reclassify imported goods in the Twelfth Schedule to the Ordinance, if a capital goods has not been classified in Part-l; or a raw material has not been classified in Part-lI.
Under the new rules, the application of the importer shall be examined by the Committee on Imported Goods.
The Committee on Imported Goods shall consist of Member Inland Revenue Policy, FBR (Chairman of the committee); Member Inland Revenue Operations, FBR (Member); Member Customs Policy, FBR (Member); Chairman National Tariff Commission (Member) and Chairman Engineering Development Board (Member); and Chief income Tax Policy shall act as secretary to the committee.
An application for reclassification shall be accepted if approved by majority, FBR added.
Upon receipt of the recommendations of the committee under rule 40C, the Chairman FBR may reclassify such goods as it may deem fit after taking into consideration the recommendations of the Committee on Imported Goods; refer the matter back to the committee for further examination of additional aspects as may be noted by the Board; or reject the application of the taxpayer for reasons to be recorded in writing.
The Commissioner shall have free access to the premises, registered office or any other place where any stocks, business records or documents required under these rules are kept or maintained or whose business activities are covered under these rules; and such officer may, at any time, inspect the goods, stocks, records, data, documents, correspondence, accounts and statements or any other record for verification purposes.
The Commissioner may conduct audit of consumption, production and sales of the latest Tax Year for which return of income has been filed at any time during the year in order to verify that the quantum of annual production is in accordance with the consumption of raw materials and the input-output co-efficient, FBR added.
Copyright Business Recorder, 2020
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