Pakistan Budget - Full Text Of The Finance Ordinance, 2000 -

ISLAMABAD (June 18) : Text of Finance Ordinance, 2000 promulgated by President Muhammad Rafiq Tarar on Saturday (June 17, 2000) to give effect to the financial proposals of the Federal Government for the year beginning on the first day of July 2000:

AN ORDINANCE

To give effect to the financial proposals of the Federal Government for the year beginning on the first day of July 2000, and to amend certain laws.

WHEREAS it is expedient to make provision to give effect to the financial proposals of the Federal Government for the year beginning on the first day of July, 2000, and to amend certain laws for the purposes hereinafter appearing;

WHEREAS the National Assembly and the Senate stand suspended in pursuance of the Proclamation of Emergency of the fourteenth day of October, 1999, and the Provisional Constitution Order No. 1 of 1999;

WHEREAS the President is satisfied that circumstances exist which render it necessary to take immediate action;

NOW, THEREFORE, in pursuance of Proclamation of Emergency of the fourteenth day of October, 1999, and Provisional Constitutional Order No. 1 of 1999, as well as order No. 9 of 1999, and in exercise of all powers enabling him in that behalf, the President of the Islamic Republic of Pakistan is pleased to make and promulgate the following ordinance.

1. Short title, extent and commencement.- (1) This Ordinance may be called Finance Ordinance, 2000.

(2) It extends to the whole of Pakistan

(3) It shall come into force at once.

2. Amendment of Act I of 1944.- The following amendments shall be made in the Central Excises Act, 1944 (I of 1944), namely:-

(1) in section 2, in clause (2), the comma, words and brackets ", Collector of Central Excise (Appeals)" shall be omitted;

(2) in section 3, in sub-section (1), in the proviso, for the full stop, at the end, a colon shall be substituted and after the proviso, amended as aforesaid, the following new proviso shall be added, namely:-

"Provided further that the duty in respect of goods imported into Pakistan shall be levied and collected in the same manner and at the same time as if it were a duty of customs payable under the Customs Act, 1969 (IV of 1969), and the provisions of the said Act including section 31A thereof shall apply.";

(3) in section 3B,

(i) for the words "two per cent" , the words "one and half per cent" shall be substituted;

(ii) in the Explanation,

(1) the bracket and figure "(i)" shall be omitted;

(2) for the semicolon and word "; and" a full stop shall be substituted; and

(3) clause (ii) shall be omitted;

(4) for the section 33, the following shall be substituted, namely:-

"33 Power of adjudication.- (1) Subject to sub-section (2), in cases involving confiscation of goods or imposition of penalty under this Act or the rules made thereunder, the jurisdiction and powers of adjudication of the Central Excise Officers shall be as follows:-

(i) Collector: Without limit.

(ii) Additional Collector: Confiscation of goods the value of which does not exceed Rs 1,500,000/- excluding the value of conveyance and the value of non-dutiable goods, and imposition of the penalty under the rules.

(iii) Deputy Collector: Confiscation of goods the value of which does not exceed Rs 500,000/- excluding the value of conveyance and the value of non-dutiable goods, and imposition of the penalty under the rules.

(2) The Board may, by notification in the official Gazette, vary the jurisdiction and powers of any Central Excise Officer or a class of Central Excise Officers.

(3) A Collector, an Additional Collector and a Deputy Collector shall decide the case within forty-five days of the issuance of show cause notice or within such extended period for which reasons shall be recorded in writing, provided that such extended period shall in no case exceed ninety days.";

Provided that the Board shall have powers to regulate the system of adjudication including transfer of cases and extension of time limit in exceptional circumstances.

(5) section 35 shall be omitted;

(6) section 35A shall be omitted;

(7) in section 35B,

(a) in sub-section (1),

(i) after the word "person" the words "or central excise officer" shall be inserted;

(ii) in clause (a), for the words "the Collector of Central Excise" the words "a Central Excise Officer" shall be substituted;

(iv) clause (b) shall be omitted;

(v) in clause (d), for the figure and word "35-A" the figure and word "35E" shall be substituted; and

(vi) in the second proviso, for the word "ten" the word "fifty" shall be substituted;

(b) sub-section (2) shall be omitted;

(c) in sub-section (6), the words, brackets and figure "an appeal referred to in sub-section (2) or" shall be omitted; and

(d) after sub-section (6), amended as aforesaid, the following new sub-section shall be added, namely:-

"(7) All cases pending before a Collector (Appeals), immediately before the commencement of the Finance Ordinance, 2000, shall stand transferred to Appellate Tribunal for disposal.";

(8) in section 35C,

(a) in sub-section (1), for the full stop, at the end, a colon shall be substituted and thereafter the following proviso shall be inserted, namely:-

"Provided that appeal shall be decided within sixty days of filing the appeal or within such extended period as the Tribunal may, for reasons to be recorded in writing fix, provided that such extended period shall in no case exceed ninety days.";

(b) in sub-section (3), for the words "Collector of Central Excise" the words "Central Excise Officer" shall be substituted;

(9) section 36 shall be omitted;

(10) in section 36B,

(a) in sub-section (1), in the first proviso,

(i) the comma, words and brackets ", the Collector (Appeals) or" shall be omitted;

(ii) the words, brackets and commas "the Collector (Appeals) or, as the case may be," shall be omitted;

(iii) the words "he or" shall be omitted;

(b) in the second proviso, the words "appellate authority" the words "Appellate Tribunal" shall be substituted;

(d) sub-section (2) shall be omitted;

(11) Chapter VI-A, and sections 36N, 36O, 36P, 36Q, 36R, 36S, 36T, 36U, 36V, 36W and 36X shall be omitted; and

(12) in the First Schedule, in paragraph 2, in the first table, in the first column, after heading 33.02, the following new heading number and the entries relating thereto in the second and third columns shall be inserted, namely:-

"38.14 Organic composite solvents and thinners, not elsewhere specified or included; prepared paint or varnish removers: Rs 10 per litre.".

3. Amendment of Act XV of 1963.- The following amendments shall be made in the Wealth-tax Act, 1963 (XV of 1963), namely:-

(1) in section 2, in sub-section (10), after the comma, occurring for the first time, the words and comma "an Assistant Commissioner of Wealth-tax," shall be inserted and shall be deemed always to have been so inserted;

(2) in section 3, after the colon at the end, the following proviso shall be added, namely: -

"Provided that wealth-tax shall not be chargeable in respect of any assessment year commencing on or after the first day of July, 2001.";

(3) in section 13A, in sub-section (1), in the proviso, for the full stop, at the end, a colon shall be substituted and thereafter the following new proviso shall be added, namely:-

"Provided further that nothing contained in this section shall apply in respect of any assessment year commencing on or after the first day of July, 2001.";

(4) in section 13D, after sub-section (3), the following new sub-section shall be added, namely:-

"(4) Advance tax under this section shall not be payable in the financial year commencing on or after the first day of July, 2000.";

(5) in section 14, in sub-section (1A), in clause (a), the second proviso shall be omitted;

(6) in section 14C, in sub-section (1), in the proviso, for the full stop, at the end, a colon shall be substituted and thereafter the following new proviso shall be added, namely:-

"Provided further that nothing contained in this section shall apply in respect of any assessment year commencing on or after the first day of July, 2001."; and

(7) in section 14D, in sub-section (1), in the second proviso, for the full stop, at the end, a colon shall be substituted and thereafter the following new proviso shall be added, namely:-

"Provided further that nothing contained in this section shall apply in respect of any assessment year commencing on or after the first day of July, 2001."

4. Amendment of Act IV of 1969.- The following amendments shall be made in the Customs Act, 1969 (IV of 1969), namely:-

1. In section 2,

(a) in clause (a) the words ", Collector (Appeals)" shall be omitted; and

(b) in section 2, the clause (ff) shall be omitted;

2. for section 5, the following shall be substituted, namely:-

"5. Delegation of powers.- (1) The Board may, by notification in the official Gazette and subject to such limitations or conditions as may be specified therein, empower by name or designation

(a) any Additional Collector of Customs or Deputy Collector of Customs to exercise any of the powers of a Collector of Customs under this Act;

(b) any Deputy Collector of Customs or Assistant Collector of Customs to exercise any of the powers of an Additional Collector of Customs under this Act;

(c) any Assistant Collector of Customs to exercise any of the powers of a Deputy Collector of Customs under this Act; and

(d) any other officer of customs with any other designation..

(2) Unless the Board in any case otherwise directs, the Collector may authorise any officer subordinate to him to exercise within any specified area, any of the powers of the Collector or of any other officer of Customs under this Act."'

3. In section 25,-

(i) for sub-section (4), the following shall be substituted, namely:-

"(4) Where, in relation to the goods being valued, the appropriate officer is of the opinion that the importer has not, for the purposes of clause (a) of sub-section (3), demonstrated that the relationship did not influence the price or, for the purposes of clause (b) of sub-section (3), that the declared price at which the goods are imported does not closely approximate to one of the test values mentioned therein, the appropriate officer shall inform the importer of his reservations in writing and give the importer an opportunity to justify the price difference. If the importer fails to justify the price difference, the customs value cannot be determined under the provisions of sub-section(1).";

(ii) in sub-section 5,-

(a) in clause (a),-

(i) for the word "provision" the word "provisions" shall be substituted; and

(ii) after the word "of", occurring for the second time, the word "the" shall be inserted.;

(b) after clause (c), the following new clause shall be added, namely:-

"(d) If, in applying the provisions of this sub-section, there are two or more transaction values of identical goods that meet all the requirements of this sub-section and clauses (b), (d), (e) and (f) of sub-section (13), the customs value of the imported goods shall be the lowest such transaction value, adjusted as necessary in accordance with clauses (b) and (c).";

(iii) for sub-section (6), the following shall be substituted, namely:-

"(6) Transaction value of similar goods.- If the customs value of the imported goods cannot be determined under the provisions of sub-section (5), it shall, subject to clauses (c), (d), (e) and (f) of sub-section 13 and rules, be the transaction value of similar goods sold for export to Pakistan and exported at or about the same time as the goods being valued, and the provisions of clauses (a), (b) (c) and (d) of sub-section (5) shall, mutatis mutandis, also apply in respect of similar goods.";

(iv) in sub-section (7), in clause (a),-

(a) in sub-clause(ii), after the section, at the end, the word "and" shall be added; and

(b) sub-clause (iii), shall be omitted.;

4. In section 32,-

(i) in sub-section (2), for the word "three", the word "five" shall be substituted;

(ii) in sub-section (3), for the words "six months", the words "three years" shall be substituted; and

(ii) after sub-section(3), the following new sub-section shall be inserted, namely:-

"(3A) Notwithstanding anything contained in sub-section (3), where any duty or charge has not been levied or has been short-levied or has been erroneously refunded and this is discovered as a result of an audit or examination of an importer's accounts or by any means other than an examination of the documents provided by the importer at the time the goods were imported, the person liable to pay any amount on that account shall be served with a notice within three years of the relevant date requiring him to show cause why he should not pay the amount specified in the notice.";

5. in section 81, in sub-section (2), for the word and figure "one hundred and eighty days" the words "one year" shall be substituted.;

6. after section 83, the following new section shall be inserted, namely:-

"83A. Levy of additional duty,- Notwithstanding anything contained in this Act and without prejudice to any other action that may be taken under this Act, if any person fails to pay the dues recoverable under this Act within the prescribed time, he shall, in addition to the dues payable, be liable to pay additional duty at the rate of one and a half percent per month.

Explanation: For the purpose of calculating additional duty, the period of default shall be reckoned from the day following the due date on which the dues were required to be paid to the day preceding the date on which the same are actually paid.";

7. for the section 179, the following shall be substituted, namely:-

"179 Power of adjudication.-(1) Subject to sub-section (2), in cases involving confiscation of goods or imposition of penalty under this Act or the rules made thereunder, the jurisdiction and powers of adjudication of the Officers of Customs shall be as follows:-

(i) Collector: Without limit.

(iii) Deputy Collector: Confiscation of goods the value of which does not exceed Rs. 500,000/- excluding the value of conveyance and the value of non-dutiable goods, and imposition of the penalty under the rules.

(2) The Board may, by notification in the official Gazette, vary the jurisdiction and powers of any Officer of Customs or a class of officers.

(3) A Collector, an Additional Collector or an Deputy Collector shall decide the case within forty-five days of the issuance of show cause notice or within such extended period for which for reasons shall be recorded in writing, provided that such extended period shall in no case exceed ninety days.";

(4) The Board shall have the powers to regulate the system of adjudication including transfer of cases and extension of time limit in exceptional circumstances.";

8. sections 193 and 193-A shall be omitted;

9. in section 194-A,

(a) in sub-section (1),

(i) after the word "person" the words "or an officer of Customs" shall be inserted;

(ii) in clause (a), for the words "the Collector of Customs" the words "an officer of customs" shall be substituted;

(iii) clause (b) shall be omitted; and

(iv) in the second proviso, for the word "ten" the word "fifty" shall be substituted;

(b) sub-section (2) shall be omitted;

(c) in sub-section (6), the words brackets and figure "an appeal referred to in sub-section (2) or" shall be omitted; and

(d) after sub-section (6), amended as aforesaid, the following new sub-section shall be added, namely:-

"(7) All cases pending, immediately before the commencement of the Finance Ordinance, with the Collector (Appeals) shall stand transferred to the Appellate Tribunal for disposal in accordance with law.";

10. in section 194-B,

(i) in sub-section (1), for the full stop, at the end, a colon shall be substituted and thereafter the following proviso shall be inserted, namely:-

"Provided that the appeal shall be decided within sixty days of filing the appeal or within such extended period as the Tribunal may, for reasons to be recorded in writing fix, provided that such extended period shall not in any case exceed ninety days.";

(ii) in sub-section (3), for the words "Collector of Customs " the words "officer of Customs" shall be substituted;

11. section 195-A shall be omitted;

12. in section 195-B, in the proviso,

(i) the comma, words and brackets ", the Collector (Appeals) or" shall be omitted;

(ii) the words, brackets and commas "the Collector (Appeals) or, as the case may be," shall be omitted;

(iii) the words "he or" shall be omitted;

13. chapter XIX-A sections 196K, 196L, 196M, 196N, 196O, 196P, 196Q, 196R, 196S, 196T, 196U shall be omitted;

14. in section 202, in sub-section (1), for clause (a), the following shall be substituted, namely:-

"(a) may deduct or require any other officer of Customs, Central Excise, Sales Tax, Income Tax or Wealth Tax to deduct such amount from any money owing to such person which may be under the control of the Customs, Central Excise, Sales Tax, Income Tax or Wealth Tax authorities; or"; and

15. The First Schedule to the Customs Act, 1969 (IV of 1969), shall stand amended to the extent of HS headings and sub-headings and the entries relating thereto in columns (2) and (3), set-out in the First Schedule".

5. Amendments of the Income Tax Ordinance, 1979 (XXXI of 1979).-The following amendments shall be made in the Income Tax Ordinance, 1979 (XXXI of 1979), namely:-

(1) in section 23, in sub-section (1),-

(a) clause (ix) shall be omitted; and

(b) after clause (xx), the following new clause shall be added, namely:-

"(xxi) any interest accrued on or after the first day of July, 2000, on a non-performing loan credited to suspense account by a banking company in accordance with the Prudential Regulations for Banks issued by the State Bank of Pakistan.";

(2) in section 24,-

(a) in clause (h), the word "or", at the end, shall be omitted;

(b) in clause (i), in the Explanation, for the full stop, at the end, a semicolon and word "; or" shall be substituted; and

"(j) any expenditure incurred on account of payment of a fine or penalty for the violation of any law or rule or regulation for the time being in force.";

(3) in section 25,-

(a) after the words and comma "bad debt," occurring for the first time, the words and comma "interest credited to suspense account," shall be inserted; and

(b) after clause (aa), the following new clause shall be inserted, namely:-

"(ab) during any income year, the assessee has received, whether in cash or in any other manner whatsoever, any amount in respect of a loan referred to in clause (xxi) of sub-section (1) of section 23, the amount so received shall be deemed to be the income from business or profession of that income year, provided that such amount does not exceed the interest receivable in respect of the aforementioned loan;";

(4) section 44B shall be omitted;

(5) in section 50,

(a) in sub-section (2), after the figure "17" the words, brackets, figure and letter "or sub-section (7D)" shall be inserted;

(b) in sub-section (4), in clause (b), in the proviso, in clause (i) after the word "company" the words "or a banking company or a financial institution" shall be inserted;

"(5AAB) The Export Processing Zones Authority created under the Export Processing Zones Authority Ordinance, 1980 (IV of 1980), shall at the time of export of goods by an industrial undertaking located in an area declared by the Federal Government to be a "Zone" within the meaning of the aforesaid Ordinance, collect tax on the value of such exports at the rates specified in sub-paragraph (e) of paragraph CCCCA of the First Schedule.";

(d) sub-section (7BB) shall be omitted; and

(e) in sub-section (7D), commas, words, brackets and figures ", not being a payment to which sub-section (2) of section 50 applies," shall be omitted.

(6) in section 55, in sub-section (1), in the third proviso, for the full stop at the end, a colon shall be substituted and thereafter, the following new proviso shall be added, namely:-

"Provided that where a taxpayer is not borne on the National Tax Number Register, and fails to file an application in the prescribed form and manner for the said number, along with the return of his income or certificate in lieu of return under the first proviso to sub-section (1), such return of income or certificate shall not be considered a return under this section.";

(7) in section 56, at the end the following Explanation shall be added, namely:-

"Explanation.- For the removal of doubt it is declared that a notice under this section may be issued in respect of any assessment year including the current assessment year and any preceding assessment year.";

(8) in section 58,-

(a) the brackets and figure "(1)" shall be omitted; and

(b) in clause (d) for the full stop, at the end, a colon shall be substituted and thereafter the following proviso shall be added, namely:-

"Provided that where the income declared is two hundred thousand rupees or more, the return of total income shall be accompanied by a wealth statement.";

(9) in section 59, sub-section (4) shall be omitted;

(10) after section 61, the following new section shall be inserted, namely:-

"61A. Utilisation of certain information.- The value of stock-in-trade determined or any other information obtained or collected during survey of any business or profession, carried out under the Survey for Documentation of National Economy Ordinance, 2000, may be used for purposes of assessment or re-assessment of total income of the income year during which the said survey is carried out and any preceding income year not being earlier than the income year ending 30th day of June, 1999, unless there is sufficient evidence provided by the assessee to show that the value of stock-in-trade or other information as aforesaid was substantially different in respect of the preceding income year as aforesaid.

(11) after section 62B, the following new section shall be inserted, namely:-

"62C. Powers of tax authorities to modify orders, etc.- (1) Where a question of law has been decided by a High Court or the Appellate Tribunal, the Deputy Commissioner of Income Tax may notwithstanding that the Commissioner has filed an appeal against the decision of the High Court or of the Appellate Tribunal, as the case may be, follow the said decision so far as it applies to an identical question arising in any case pending before him until the decision of the High Court or of the Appellate Tribunal is reversed or modified subsequently:

Provided that the assessee makes an application before the Deputy Commissioner of Income Tax that an identical question of law has arisen in his case and makes a declaration that if the decision is reversed or modified by the High Court or the Supreme Court, he shall not file any appeal against such order.

(2) In case the High Court or Appellate Tribunal's order referred to in sub-section (1) is reversed or modified subsequently, the Deputy Commissioner of Income Tax may, notwithstanding the expiry of period of limitation prescribed for making any assessment or order, within a period of six months from the date of receipt of decision, modify the assessment or order so that it conforms to the final decision.";

(12) after section 80B, the following new section shall be inserted, namely:-

"80BB. Tax on income of goods transport vehicles owners. (1) Notwithstanding anything contained in this Ordinance or any other law for the time being in force, where any tax is withheld in accordance with sub-section (6) of section 50 at the rates specified in sub-paragraph (I) of paragraph G of the First Schedule, from any person being the owner of a goods transport vehicle, the tax so collected shall be deemed to be the final discharge of the tax liability of such person under this Ordinance in respect of income derived from plying of goods transport vehicles and he shall not be required to file the return of total income under section 55.

(2) In a case to which sub-section (1) applies, an order under section 59A shall be deemed to have been made in respect of income referred to in sub-section (1).";

(13) in section 80C,-

(a) in sub-section (2), in clause (a), in sub-clause (i), the words and commas "by doctors, lawyers, accountants, auditors, architects, surveyors, actuaries, engineers, advisors and consultants" shall be omitted; and

(b) sub-section (5A) shall be omitted;

(14) after section 80CC, the following new section shall be added, namely:-

"80CD. Tax on income of industrial undertakings located in Export Processing Zones. (1) Notwithstanding anything contained in this Ordinance or any other law for the time being in force, where any goods referred to in sub-section (5AAB) of section 50 are exported by any person, the value of such goods shall be deemed to be the income of the said person and tax thereon shall be charged at the rates specified in the First Schedule.

(2) Nothing contained in this Ordinance shall be so construed as to authorise any allowance or deduction against the income as determined under sub-section (1) or any refund of tax collected under sub-section (5AAB) of section 50 or set off of any loss under any provision of this Ordinance.

(3) Where the assessee has no income other than the income referred to in sub-section (1) in respect of which tax has been deducted under sub-section (5AAB) of section 50, the tax so deducted shall be deemed to be the final discharge of his tax liability under this Ordinance and he shall not be required to file the return of total income under section 55.

(4) Where an assessee while explaining the nature and source of any sum, investment, money, valuable article, excess amount or expenditure, referred to in section 13, takes into account any source of income which is subject to tax in accordance with the provision of this section, he shall not be entitled to credit of any sum as is in excess of an amount which if taxed at a rate or rates, other than the rate applicable to income chargeable to tax under this section, would have resulted in tax liability equal to the tax payable in respect of income under this section.

(5) In a case to which sub-section (3) applies, an order under section 59A shall be deemed to have been made in respect of income referred to in sub-section (1).";

(15) in section 80D, the words, commas, brackets and figures " which, not being a company, does not qualify for assessment under the self assessment scheme under sub-section (1) of section 59" shall be omitted;

(16) in section 80DD, after the words "such liability" a full stop shall be inserted and the words "of the said industrial undertaking" shall be omitted.

(17) in section 83, in sub-section (4), for the full stop, at the end, a colon shall be substituted and thereafter the following proviso shall be added, namely:-

"Provided that where a transferor fails to produce evidence of transfer of an asset by way of its registration or mutation in the relevant record, income arising from such asset shall be chargeable to tax as the income of the transferor and shall be included in his total income.";

(18) in sections 86, 87, 88 and 89, for the word "twenty- four" wherever occurring the word "eighteen" shall be substituted;

(19) in section 104,-

(a) existing section shall be re-numbered as sub-section (1) and in sub-section (1), re-numbered as aforesaid,-

(i) after the comma, occurring for the third time, the words, comma, figure and brackets "the Central Excises Act, 1944 (I of 1944)," shall be inserted;

(ii) the word "or" shall be omitted; and

(iii) for the word "any", occurring for the first time, the words, comma, figure and brackets "or the Customs Act, 1969, (IV of 1969), any" shall be substituted; and

(b) after sub-section (1), the following new sub-section shall be added, namely:-

"(2) Where any refund is due to any person under this Ordinance, the amount to be refunded or any part thereof, may be set off against the tax payable under any Act referred to in sub-section (1).";

(20) after section 107A, the following new section shall be added, namely:-

"107AA. Tax credit for investment.- (1) Where an assessee being a Pakistani company invests any amount in the purchase of plant and machinery for installation, at any time between the first day of July, 2000 and the 30th day of June, 2002, in an industrial undertaking set up in Pakistan and owned by it, credit equal to ten per cent of the amount so invested shall be allowed against the tax payable by it in the manner hereinafter provided.

(2) The amount of credit admissible under this section shall be deducted from the tax payable by the assessee in respect of the income year in which the machinery or plant in the purchase of which the amount referred to in sub-section (1) is invested, is installed.

(3) Where no tax is payable by the assessee in respect of the assessment year relevant to the income year in which such plant or machinery is installed, or where the tax payable is less than the amount of the credit, the amount of the credit, or so much of it, as is in excess thereof, as the case may be, shall be carried forward and deducted from the tax payable by the assessee in respect of the immediately following assessment year only.

(4) Where any credit is allowed under this section and subsequently it is discovered by the Deputy Commissioner of Income Tax that any one or more of the conditions specified in this section was, or were, not fulfilled, as the case may be, the credit originally allowed shall be deemed to have been wrongly allowed and the Deputy Commissioner may, notwithstanding anything contained in this Ordinance, recompute the tax payable by the assessee for the relevant year and the provisions of section 65 shall, so far as may be, apply accordingly.

(5) The provisions of sub-section (1) and (2) shall also apply in the like manner to any plant and machinery installed, for the purposes of balancing, modernisation and replacement.

(6) Nothing contained in rule 5A of the Third Schedule to the Ordinance, shall apply to an industrial undertaking which claims tax credit under sub-section (1).";

(21) in section 129, in sub-section (2), after the word and figure "section 54" the words "and not less than fifteen per cent of the amount of tax assessed" shall be inserted.

(22) in section 132, after sub-section (6), the following new sub-section shall be added, namely:-

"(7) Where an appeal has been preferred under section 129, the Appellate Additional Commissioner may, by an order in writing, stay

the recovery up to eighty-five per cent of the amount of tax, up to a period of three months or till the decision of appeal, whichever may be earlier.";

(23) in section 133, in sub-section (3), clause (d) shall be omitted;

(24) for section 136 the following shall be substituted, namely:-

"136. Reference to High Court.- (1) Within ninety days of the date upon which he is served with notice of an order under section 135, the assessee or the Commissioner may, by application in such form and accompanied by such documents as may be prescribed, require the Appellate Tribunal to refer to the High Court any question of law arising out of such order, and the Appellate Tribunal shall, within ninety days of the receipt of such application, draw up a statement of the case and refer it to the High Court.

Explanation.- For the removal of doubts it is hereby declared that a reference application under this section may be made in respect of a question of law arising out of an order of the Appellate Tribunal made on or after the first day of July, 2000.

(2) If, on an application made under sub-section (1), the Appellate Tribunal refuses to state the case on the ground that no question of law arises, the assessee or the Commissioner, as the case may be, may within one hundred and twenty days from the date on which he is served with notice of the refusal, apply to the High Court and the High Court may, if it is not satisfied with the correctness of the decision of the Appellate Tribunal, frame a question of law and the provisions of sub-sections (5), (6), (7) and (8) shall, so far as may be, apply as they apply to a reference made under sub-section (1).

(3) If on any application made under sub-section (1), the Appellate Tribunal rejects it on the ground that it is time-barred, the assessee or the Commissioner, as the case may be, may, within three months from the date on which he is served with notice of the rejection, apply to the High Court, and the High Court, if it is not satisfied of the correctness of the Appellate Tribunal's decision, may require the Appellate Tribunal to treat the application as made within the time allowed under sub-section (1).

(4) If the High Court is not satisfied that the statement in a case referred under sub-section (1) is sufficient to enable it to determine the question raised thereby, the Court may refer the case back to the Appellate Tribunal to make such modification therein as the Court may direct.

(5) When any case has been referred to the High Court under this section, it shall be heard by a Bench of not less than two Judges of the High Court, and in respect of such case the provisions of section 98 of the Code of Civil Procedure, 1908 (V of 1908), shall, so far as may be, apply notwithstanding anything contained in the Letters Patent applicable to any High Court or in any other law for the time being in force.

(6) The High Court upon the hearing of any such case, shall decide the questions of law raised thereby and shall deliver its judgement thereon containing the grounds on which such decision is founded and shall send a copy of such judgement under the seal of the Court and the signature of the Registrar to the Appellate Tribunal which shall pass such orders as are necessary to dispose of the case conformably to such judgement.

(7) Where a reference is made to the High Court under this section, the costs shall be in the discretion of the Court.

(8) Notwithstanding that a reference has been made under this section to the High Court, tax shall, unless the recovery thereof has been stayed by the High Court, be payable in accordance with the assessment made in the case.

(9) Section 5 of the Limitation Act, 1908 (IX of 1908), shall apply to an application under sub-section (1) or sub-section (2).

(10) When an application is made under sub-section (1) by the assessee, it shall be accompanied by a fee of one hundred rupees.";

(25) in section 137, in sub-section (1), for the words "an appeal filed" the words and comma "a reference made, or any question of law framed," shall be substituted;

(26) in section 138, in sub-section (5), in clauses (c) and (e) for the words "Central Board of Revenue" the words "Regional Commissioner" shall be substituted;

(27) in section 138C, in sub-section (2A), for the full stop, at the end, colon shall be substituted and thereafter the following proviso shall be added, namely:-

"Provided that this Commission shall not perform its functions referred to in clause (c) after the 30th day of June, 2000.";

(28) in section 138D, after sub-section (3), the following new sub-section shall be added, namely:-

"(4) No application under this section shall be made after the 30th day of June, 2000."; and

(29) section 138EE shall be omitted;

(30) in the First Schedule,

(i) in Part-I,-

(a) in paragraph A, in the proviso, in clause (a), sub-clause (ii) shall be omitted;

(b) paragraph AA shall be omitted;

(c) in paragraph CCC, in sub-paragraph (i), in clause (d), for full stop, at the end, a colon shall be substituted and thereafter the following proviso shall be added, namely:-

"Provided that for the assessment year commencing on or after the first day of July, 2001, the rate of tax shall be six per cent of the value of goods imported.";

(d) in paragraph CCCC,-

(i) the existing paragraph shall be re-numbered as sub-paragraph (a); and

(ii) after sub-paragraph (a), re-numbered as aforesaid, the following new sub-paragraph shall be added, namely:-

"(b) for the assessment year commencing on or after the first day of July, 2001, the rates shall be as under:-

(i) Part-I of Eighth Schedule: 0.75% of such income

(ii) Part-II of Eighth Schedule: 1.0% of such income

(iii) Part-III of Eighth Schedule: 1.25% of such income.";

(e) after paragraph CCCC, the following new paragraph CCCCA shall be inserted, namely:-

"CCCCA. In the case of every person to whom section 80CD applies and the income pertains to exports covered under:

(i) Part-I of Eighth Schedule: 0.75% of such income

(ii) Part-II of Eighth Schedule: 1% of such income

(iii) Part-III of Eighth Schedule: 1.25% of such income.";

(f) in paragraph F, for the word "Five" the word "Six" shall be substituted;

(g) for paragraph FF, the following shall be substituted namely:-

"FF. Rate of collection of income tax under sub-sections (5A), (5AA) and (5AAB) of section 50 apply, excluding income to which paragraph FFA applies:

Where the income pertains to supply of goods to an exporter under a back to back inland letter of credit and from exports covered under: RATES

(i) Part-I of Eighth Schedule: 0.75% of such income

(ii) Part-II of Eighth Schedule: 1% of such income

(iii) Part-III of Eighth Schedule: 1.25% of such income.";

(h) paragraph HHH shall be omitted;

(ii) in Part-III, after paragraph B, the following new paragraph shall be added, namely:-

"C. In respect of the income year relevant to the assessment year commencing on or after the first day of July, 2000, a company, not being a banking company, other than a banking company shall pay surcharge equal to five per cent of the amount of income tax payable excluding the amount of presumptive income tax payable under section 80C or 80CC.";

(31) in the Second Schedule,

(i) in Part-I,-

(a) in clause (86B),-

(i) for the words "approved by the Central Board of Revenue" the words and comma "recognised by a Board of Education or a University or the University Grant Commission, as the case may be" shall be substituted;

(ii) for the figure "2000" the figure "2005" shall be substituted; and

(iii) for the full stop, at the end, a colon shall be substituted and thereafter the following proviso shall be added, namely,-

"Provided that a computer training institution or computer training scheme approved by the Central Board of Revenue before the first day of July, 2000, shall continue to avail exemption under this clause till the expiry of the specified period.";

(b) in clause (108), for the figure "2000" the figure "2001" shall be substituted;

(c) in clause (117A), after the figures "1999", the words and figures, "and between the first day of July, 2000 and the 30th day of June, 2001", shall be added; and

(d) clauses (154A), (155A) and (178) shall be omitted;

(ii) in Part-II,-

(a) in clause (6AA),-

(i) for the word "two" the word "three" shall be substituted; and

(ii) the words and comma "as raw material by an industrial undertaking exclusively for its own use," appearing after the word "imported" shall be omitted.

(b) clauses (14) and (15) shall be omitted;

(iii) in Part-III,-

(a) for the brackets, letter and figure "(A1)" the brackets, figure and letter "(1A)" shall be substituted; and

(b) after clause (1A), the following new clause shall be added, namely:-

"(1B) Reduction in tax in the cases of salaried tax payers.- (1) The income tax liability on income of salaried tax payers, where any income chargeable under the head "salary" exceeds 50% of total income as determined under paragraph A of Part-I of the First Schedule, shall be reduced at the following rates:-

1. INCOME SLAB: Where income does not exceed Rs 60,000 REDUCTION IN TAX LIABILITY: 80%

2. INCOME SLAB: Where income exceeds Rs 60,000 but does not exceed Rs 80,000 REDUCTION IN TAX LIABILITY: 70%

3. INCOME SLAB: Where income exceeds Rs 80,000 but does not exceed Rs 100,000 REDUCTION IN TAX LIABILITY: 60%

4. INCOME SLAB: Where income exceeds Rs 100,000 but does not exceed Rs 150,000 REDUCTION IN TAX LIABILITY: 50%

5. INCOME SLAB: Where income exceeds Rs 150,000 but does not exceed Rs 200,000 REDUCTION IN TAX LIABILITY: 40%

6. INCOME SLAB: Where income exceeds Rs 200,000 but does not exceed Rs 300,000 REDUCTION IN TAX LIABILITY: 30%

7. INCOME SLAB: Where income exceeds Rs 300,000 but does not exceed Rs 500,000 REDUCTION IN TAX LIABILITY: 10%

8. INCOME SLAB: Where income exceeds Rs 500,000 REDUCTION IN TAX LIABILITY: 5%

(2) in addition to the reduction specified in sub-clause (1), the tax payable by a full time teacher or a researcher, employed in a non profit education or research institution duly recognised by a Board of Education or a University or the University Grants Commission, shall be further reduced by an amount equal to 50% of the tax payable after the aforesaid reduction.

(3) The reduction in tax liability in sub-clauses (1) and (2) shall be applicable for the purposes of tax withholding under sub-section (1) of section 50 from the first day of July, 2000 and for the purposes of assessment from assessment year 2001-2002.";

(iv) in Part-IV,-

(a) in clause (9B), in the third proviso, for the word "four" the word "six" shall be substituted;

(b) clauses (7), (17A) and (24) shall be omitted;

"(17B) The provisions of sub-section (5) of section 50 shall not apply to such specially equipped motor vehicle or support equipment imported by a disabled person, as is allowed by the Federal Government.

(17C) The provision of sub-section (5) of section 50 shall not apply in case of such goods imported into Pakistan as are exempt from customs duty and sales tax under SROs 360(I)/2000, 362(I)/2000 and 363(I)/2000 dated 17.6.2000.";

(d) after clause (32A), the following new clauses shall be added, namely:-

"(32B) The provisions of section 80D shall not apply to a charitable institution which is approved under clause (d) of sub-section (1) of section 47 or clause (62) or is included in clause (62) or clause (91) of Part-I of the Second Schedule to this Ordinance.

(32C) The provisions of section 80D shall not apply to an assessee who qualifies for exemption under clause (179) of Part-I of the Second Schedule to this Ordinance.";

(32) in the Third Schedule, in rule 5A, in the table, entry F shall be omitted; and

(33) in the Eighth Schedule,-

(a) for the first paragraph the following shall be substituted, namely:-

"The rate of tax payable under sub-section (5A) of section 50, in respect of income of a person (being a resident), from export of goods shall be

Where the income pertains to exports covered under:

(a) Part I: 0.75% of such income or the rate as prescribed by the Central Board of Revenue.

(b) Part II: 1.0% of such income or the rate as prescribed by the Central Board of Revenue.

(b) in the table, in Part-III, in entry No. 2 the word "produced" shall be substituted by word "produced or manufactured", and after entry No. (v), the following shall be added;

"(vi) Cotton yarn; and".

6. Amendments in Sales Tax Act, 1990

The following amendments shall be made in the Sales Tax Act, 1990, namely:-

(1) In section 2.

(i) in clause (17), in sub-clause (c), at the end, for the semi-colon, a colon shall be substituted and thereafter the following proviso shall be added:-

"Provided that for the purpose of refund under this Act, only such person 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;".

(ii) in clause (33), after the words "lease" the brackets and words "(excluding financial lease)" shall be inserted;

(iii) in clause (37), after the word "liability" the words "or underpaying the tax liability for two consecutive tax periods" shall be inserted;

(2) in section 3, sub-section (1A),

(i) for the word "three", occurring twice the words "one and half" shall be substituted.

(ii) in the proviso, in clause (3) for the full stop at the end, a semi-colon and the word; "or" shall be substituted and thereafter the following new clause shall be added, namely:-

"(4) by a person enrolled for the purpose of turnover tax.";

(3) in section 11,

(i) sub-section (3) shall be omitted;

(ii) in sub-section (4), for the full stop, in the end, a colon shall be substituted and thereafter the following proviso shall be added, namely:-

"Provided that order under this section shall be made within forty-five days of issuance of show cause notice or within such extended period as an officer of Sales Tax may, for reasons to be recorded in writing, fix provided that such extended period shall in no case exceed ninety days.";

(4) for section 27 the following shall be substituted, namely:-

"27 SPECIAL RETURNS- In addition to the return specified under section 26-

(a) a person registered under section 14 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 collector 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.";

(5) in section 33,

(a) in sub-section (1) for the words "five thousand" the words "two thousand and five hundred" shall be substituted.

(b) in sub-section (2), for the words "ten" the word "five" and for the words "five" the word "three" shall respectively be substituted;

(c) in sub-section (3), for the word "twenty" the word "ten" and for the word "ten" the word "five" shall respectively be substituted;

(d) in sub-section (4), for the word "fifty" the word "twenty five" and for the word "fifty" occurring for the second time, the word "thirty" shall be substituted;

(e) in sub-section (6) for the word "fifty" the word "twenty five" shall be substituted; and

(f) in sub-section (7), for the words "five thousand" the words "two thousand and five hundred" and for the word "five" the word "three" shall respectively be substituted;

(6) In section 34.

(a) in sub-section (1), for the word "five" the words "one and a half" shall be substituted; and

(b) the Explanation, at the end, shall be omitted;

(7) in section 36, sub-section (3) for the full stop, at the end, a colon shall be substituted and thereafter the following proviso shall be added, namely:-

"Provided that order under this section shall be made within forty-five days of issuance of show cause notice or within such extended period as an officer of Sales Tax may, for reasons to be recorded in writing, fix, provided that such extended period shall in no case exceed ninety days.";

(8) for section 45, the following shall be substituted namely:-

"45. Power of Adjudication.- In cases involving assessment of tax, charging of additional tax, imposition of penalty and recovery of amount erroneously refunded under this Act or the rules made thereunder, the jurisdiction and powers of adjudication of the Sales Tax Officers shall be as follows:-

(i) Collector: Cases falling under sub-section (2) of section 11 and section 36 of the Act without any restriction as to the amount of tax involved or amount erroneously refunded.

(ii) Additional Collector: Cases falling under sub-section (2) of section 11 and section 36 of the Act provided that the amount of tax involved or the amount erroneously refunded does not exceed ten million rupees.

(iii) Deputy Collector: (a) Cases falling under sub-section (1) of section 11.

(b) Cases falling under sub-section (2) of section 11 and section 36 of the Act provided that the amount of tax involved or the amount erroneously refunded does not exceed two and a half million rupees:

Provided that the Board may, by notification in the official Gazette, vary the jurisdiction and powers of any officer of Sales Tax or a class of officers of Sales Tax.";

Provided further that the Board shall have powers to regulate the system of adjudication including transfer of cases and extension of time limit in exceptional circumstances.

(9) in section 45A, in sub-section (3) for the word "three" word "five" shall be substituted;

(10) in section 46,

(i) in sub-section (1) the words "Collector of Sales Tax or by Collector of Sales Tax (Appeals)" the words "officer of Sales Tax " shall be substituted;

(ii) in sub-section (5), the words and brackets "Collector of Sales Tax or the Collector of Sales Tax (Appeals) or as the case may be" the words "the concerned Officer of Sales Tax" shall be substituted;

(iii) after sub-section (6) the following new sub-section shall be added namely:-

"(7) Order under this section shall be passed within sixty days of filing of appeal or within such extended period as the Tribunal may, for reasons to be recorded in writing fix, provided that such extended period shall in no case exceed ninety days";

(11) Chapter VIII-A and provisions relating thereto shall be omitted;

(12) In the Sixth Schedule

(a) In serial No: 3 in column (1).

(i) serial number 3, in column (2), in clause (ii) for the word "fruits" occurring for the first time, the brackets, words and comma "(excluding imported fruits, except fruits imported from Afghanistan)" shall be inserted;

(ii) in column (2), for clause (IV) and the entry relating thereto in column (3) the following shall be substituted, namely:-

"(iv) Fresh and dried milk, milk preparations obtained by replacing one of the constituents of milk by another substance, whether or not packed for retail sale; plain yoghurt excluding packaged or sold under trade mark or brand name: Respective heading".

(iii) in column (2) for clause 3(vii) the following shall be substituted, namely:-

"(vii) Cooked or prepared food stuff served in messes run on the basis of mutuality and industrial canteens for workers of a particular class";

(iv) in column (2) for clause (ix) and (x) the following shall be substituted, namely:-

"(ix) table salt including iodised salt, excluding salt sold in retail packing bearing brand names and trade marks;

(x) red chillies, ginger and turmeric excluding red chillies, ginger and turmeric sold in retail packing bearing brand names and trade marks;".

In column (2), clause (xi) shall be omitted;

(b) in serial No: 4 in column (1), in column (2) after "Bulbs, tubers, etc.," in column (2) and entry relating thereto in column (3), the following new item and entry relating thereto shall be inserted, namely:

" Oil palm seedling: 0602.2090";

"6. Edible oils (excluding import of palm oil and soyabean oil) and vegetable ghee; desi ghee derived from milk: 15.07,15.08; 15.11,15.12; 15.13,15.14; 15.15 and 04.05";

(d) serial number 7 and the entries relating thereto shall be omitted.

(e) for serial number 8 and the entries relating thereto, the following shall be substituted namely:-

"8. JP-I: 2710.0042";

(f) serial numbers 9 and 10 and the entries relating thereto shall be omitted;

(g) for serial number 12 and the entries relating thereto the following shall be substituted, namely:-

"12. Medicaments classifiable under any of the headings of Chapter 30 of the First Schedule to the Customs Act, 1969 (IV of 1969), but excluding the following even if medicated or medicinal in nature, namely :- Respective headings of Chapter 30,";

(a) filled infusion solution bags imported with or without inpersion giving sets;

(b) Scrubs, delights and washing preparations;

(d) adhesive plaster;

(e) surgical tapes;

(f) liquid paraffin;

(g) disinfectants;

(h) cosmetics and toilet preparations; and

(i) absorbent cotton wool.

(h) for serial number 13 and the entries relating thereto the following shall be substituted, namely:-

"13. Substances registered as drugs under the Drugs Act, 1976 (XXXI of 1976), classifiable under any of headings of chapter 30 of the First Schedule to the Customs Act, 1969 (IV of 1969), but excluding the following even if medicated or medicinal in nature, namely:- Respective headings of Chapter 30,";

(a) filled infusion solution bags imported with or with out inpersion giving sets;

(b) Scrubs, delights and washing preparations;

(d) adhesive plaster;

(e) surgical tapes;

(f) liquid paraffin;

(g) disinfectants;

(h) cosmetics and toilet preparations; and

(i) absorbent cotton wool.

(i) for serial number 14 and the entries relating thereto the following shall be substituted, namely:-

"14. Raw materials for basic manufacture of pharmaceutical active ingredients; but if imported, these shall be entitled to exemption from tax on importation only if also entitled to exemption from payment of the whole or part of the custom duty leviable thereon; and also those raw materials for basic manufacture of pharmaceutical active ingredients which attract statutory custom duty @ 10%; but if imported these shall be subject to similar conditions as are envisaged for the raw materials entitled to exemption from payment of the whole or part of the custom duty leviable thereon. Respective headings.";

(j) serial No: 15 and the entries relating thereto the following shall be substituted, namely:-

"15. Raw materials for manufacture of pharmaceutical products; but if imported, these shall be entitled to exemption from tax on importation only if also entitled to exemption from payment of the whole or part of the customs duty leviable thereon and also those raw materials for the manufacture of pharmaceutical products which attract statutory customs duty @ 10%; but if imported, these shall be subject to similar conditions as are envisaged for the raw materials entitled to exemption from payment of the whole or part of custom duty leviable thereon." Respective headings.";

(k) serial number 16 and the entries relating thereto shall be omitted.

(l) for serial number 19 and the entries relating thereto the following shall be substituted, namely:-

"19. Cement: 25.23";

(m) serial number 51 and the entries relating thereto shall be omitted.

(n) for serial number 53 and the entries relating thereto the following shall be substituted, namely:-

"53. Cattle feed: 2306.1000, 2309.9000"; and

(o) serial number 57 and the entries relating thereto shall be omitted.

7. Amendment of section 20, Act IV of 1999.- In the Finance Act, 1999 (IV of 1999), in section 20,-

(a) for the marginal heading the following should be substituted, namely:-

"National Tax Number.-"; and

(b) in sub-sections (1) and (2), for the words, brackets and letters "Common Tax Payer Identifier (CTI)" the words, bracket and letters, "National Tax Number (NTN)" shall be substituted.

8. Amendments in Ordinance XV of 2000.- The following amendments shall be made in the Survey for Documentation of National Economy Ordinance, 2000 (XV of 2000), namely: -

(1) in section 3, after sub-section (2), the following new sub-sections shall be added, namely:-

"(3) Notwithstanding anything contained in sub-section (1), the cases where a person holding National Tax Number does not declare the value of stocks as per entry at Serial No: 13 of the questionnaire set out in the First Schedule to this Ordinance, declaration of stocks made by such person in his income tax return for the assessment year commencing on the first day of July, 2000, under the Income Tax Ordinance, 1979 (XXXI of 1979) shall be deemed to be an information collected under this Ordinance and all the provisions of this Ordinance shall apply accordingly.

(4) The information collected through the questionnaires, referred to in sub-section (1), shall be used for the purpose of assessment and determination of turnover, value, wealth, income or tax liabilities under the laws administered by the Central Board of Revenue,-

(a) in the case of a person holding National Tax Number, in respect of financial year in which survey is carried out and for preceding financial years commencing on or after the first day of July, 1999; and

(b) in other cases, in respect of financial year in which survey is carried out and preceding financial years."; and

(2) for section 5, the following shall be substituted, namely: -

"5. Cognisance of offence, etc.- (1) Notwithstanding anything contained in the Code of Criminal Procedure, 1898 (Act V of 1898),-

(a) no Magistrate other than an Executive Magistrate of the first class shall try an offence under this Ordinance;

(b) a Magistrate trying an offence under this Ordinance shall have the power to try such offence summarily in accordance with the procedure laid down for summary trial in the said Code.

(2) Notwithstanding anything contained in section 32 of the Code of Criminal Procedure, 1898 (Act V of 1898), it shall be lawful for an Executive Magistrate of the first class to pass any sentence authorised by this Ordinance.".

DECLARATION UNDER THE PROVISIONAL COLLECTION OF TAXES ACT, 1931 (XVI OF 1931).

It is hereby declared, in terms of section 3 of the Provisional Collection of Taxes Act, 1931 (XVI of 1931), that it is expedient in the public interest that the provisions of sub-section (12) of section 2, sub-section (15) of section 4 and clauses (m) & (n) of sub-section (12) of section 6, shall have immediate effect under the said Act.

The content of this article is intended to provide general information on the subject matter. It is therefore not a substitute for specialist advice.

Pakistan: Pakistan Budget - Full Text Of The Finance Ordinance, 2000

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