ISLAMABAD: The Federal Board of Revenue (FBR) Sunday clarified that the table prescribing tax rates for minimum tax on turnover basis has been substituted in the Finance Bill 2021 to provide relief to retailers of Fast Moving Consumer Goods (FMCG) including flour mills and refineries.
According to a clarification issued by the FBR here on Sunday, the words ‘flour mills’ could not be mentioned inadvertently in the table which was an error and had been noted and would be rectified in the amended bill, FBR added.
Through another clarification, the FBR has explained the relevant section on the right of appeal of the enforced law to remove the existing confusion in this regard. The fact remains that the law relating to clearing of admitted tax liability that the taxpayer himself has worked out, on the basis of returned income, as a sine qua non condition for filing of appeal, has always been on the statute book and it has not been changed and no such thing requiring payment of assessed tax demand for filing of first appeal has been proposed to be added by the Finance Bill, 2021.
The FBR has further clarified that the only change has been proposed in the Finance Bill is to substitute the sub-section just to correctly re-number the clauses of sub-section (4) of section 127 of the Income Tax Ordinance 2001.
FBR has clarified the misunderstanding through a hypothetical illustration. Suppose If Mr A files return while declaring income of Rs 500,000/- and admitted tax liability of Rs 5,000. He is required to pay it at the time of filing of return. Suppose taxpayer has not paid it and subsequently his assessment is amended under the law and total tax payable is determined at Rs 10,000 Law requires taxpayer to discharge ‘admitted tax of Rs 5,000’ in order to make him eligible to avail right to appeal. This provision of law continues to be part of the Income Tax Ordinance, 2001 since its inception, FBR added.
Copyright Business Recorder, 2021