ISLAMABAD: The Federal Board of Revenue (FBR) allowed customs clearance against bank guarantees or pay order to goods stuck up after changes in application of income tax rates applied through Finance Act 2020.
The FBR implemented new tax rates under Section 148 of Income Tax Ordinance 2001 from July 1, 2020. Under the new regime, the FBR classified imported goods under three different categories for income tax concessions at one percent, two percent and 5.5 percent.
For categorising three different parts of goods, a new 12th Schedule has been introduced to Income Tax Ordinance 2001. In the first two parts, the FBR mentions the names of goods for allowing concessional rates; therefore, all other goods not mentioned in the two parts should fall under the third part.
In order to avail reduced rate, importers were now approaching FBR to classify their imported goods for reduced income tax rates. The FBR said that various representations had been received regarding classification of certain goods in Part-III, where importers claimed that the goods should be covered under either Part I or Part II of the Schedule.
The FBR said the issue was examined. “Section 148 of Income Tax Ordinance, 2001, has been amended through Finance Act, 2020, changing the rates of advance income tax collected at import stage, as specified in the newly inserted 12th Schedule to the Ordinance.” The FBR further said: “While these representations are being examined in the Board, to avoid the delays in clearance of consignments stuck-up at different ports on this account, it is directed that all such consignments be allowed clearance, if otherwise in order, by securing the differential amount of advance income tax in the shape of pay order or bank guarantee, subject to the condition that the importer provides documentary evidence to the satisfaction of the collector of customs to the effect that the same claimed rate has been allowed to him during last financial year, on the same goods.”
The FBR further added that encashment or return of these securities would be decided on the basis of the decision in term of the newly inserted provision to Section 148.
