ISLAMABAD: The Federal Board of Revenue (FBR) has been empowered to grant permission to the federal and provincial governments and public organisations to pay sales tax in installments both prospectively and retrospectively.

Explaining the Finance Act, 2022, through a circular, the FBR has clarified that certain provisions required corrections or streamlining, while some amendments have been done for saving the changes brought through the Third Amendment Ordinance, 2021 that have now been made part of the Finance Act.

Under the Act, the term “production, transmission and distribution of electricity” is included in the definition of goods and supply to remove any confusion regarding the status of these activities attached to the generation and supply of electricity.

FBR estimates potential Rs3trn tax gap

(i); The subsidy provided by the federal government or provincial governments to the electricity consumers is excluded from the value of supply.

(ii); The scope of further tax has been extended to non-active taxpayers.

(iii); The purchasers of services that are liable to sales tax under a Provincial enactment are excluded from the requirement of withholding sales tax.

(iv); The name of the Director General of Training Inland Revenue changed to Inland Revenue Services Academy.

(v); Section 43(2) of FEA Streamlined for effective application of a provision of condonation of time limits 76 of STA and 29(2) of FEA Uniform has been prescribed for the FBR workforce.

(vi); The Unit of measurement for e-liquids, filter rods, and Liquefied Petroleum Gas was brought in line with the trade practice and WeBOC system.

(vii); Various entries of the Schedules to STA and FEA PCT Headings are mentioned against each one of the Sr Nos for their true identity.

(viii); Certain PCT Headings have been transposed in the Pakistan Customs Tariff Code. Corrections are accordingly made in the relevant serial numbers in the schedules to bring them in line with the new Pakistan Customs Tariff Code.

(ix); Various provisions of STA Amendments introduced through the Third Law Amendment Ordinance, 2021 incorporated in the statute through this Act.

Copyright Business Recorder, 2022