Finance (Supplementary) Act, 2022, as published 2022
This is the Finance (Supplementary) Act, 2022, as published by the Federal Board of Revenue in 2022. It runs to 24 pages and contains 4 sections.
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3. Amendments of the Sales Tax Act, 1990
In the Sales Tax Act, 1990, the following further amendments shall be made, namely:-
(1) in section 2,- in clause (5AB), in sub-clause (d), for the word “ten”, the word “eight” shall be substituted; and in clause (43A),- in sub-clause (0, the word “and” at the end shall be omitted; and after sub-clause (f), amended as aforesaid, the following new sub-clause shall be inserted, namely:- a retailer whose deductible withholding tax under sections 236G or 236H of the Income Tax Ordinance, 2001(XLIX of 2001) during the immediately preceding
twelve consecutive months has exceeded the threshold as may be specified by the Board through notification in the official Gazette; and”;
(2) in section 3, in sub-section (2), in clause (a), in the proviso, for the words “Federal Government”, the word “Board” shall be substituted; in section 23, in sub-section (1),-
(3) in clause (b), in the proviso, for the semi colon at the end, a colon shall be substituted and thereafter the following new proviso shall be added, namely:- “Provided further that the condition of NIC shall not apply in the case of payment through debit or credit card or digital mode;” and in clause (g), in the second proviso, for the colon a full stop shall be substituted and thereafter the third proviso shall be omitted;
(4) after section 30C, the following new section shall be added, namely:- “30CA.Directorate General of Digital Invoicing and Analysis.–The Directorate General of Digital Invoicing and Analysis shall consist of a Director General and as many Directors, Additional Directors, Deputy Directors and Assistant Directors and such other officers as the Board may, by notification in the official Gazette, appoint”;
(5) in section 33, in the Table, in column (1),-
(a) against serial number 23,-
(i) in column (2), for the words “cigarette packs”, “cigarette stock” and “cigarettes”, wherever occurring, the expression “specified goods” shall be substituted; and
(ii) in column (2), the expression “and destruction” shall be omitted; against serial number 24, in column (2), after the first paragraph, the following new paragraph shall be inserted, namely:- “Notwithstanding above, the business premises of such person shall be liable to be sealed by an officer of Inland Revenue in the manner prescribed.”; and against serial number 25A, in column (2),-
(i) for the first proviso, the following shall be substituted, namely:- “Notwithstanding above, the business premises of such person shall be liable to be sealed by an officer of Inland Revenue in the manner prescribed.”; and
(ii) in the existing second proviso, the word “further” shall be omitted; in the Third Schedule, in column (1), serial number 50 and entries relating thereto in columns (2) and (3) shall be omitted with effect from the 1st day of December, 2021; in the Fifth Schedule, in column (1),- serial numbers 3, 6A, 9, 15 and 18 and entries relating thereto in column (2) shall be omitted; against serial number (12),-
(i) in clause (xvii), after the words “retail sale”, the words “not exceeding rupees five hundred per two hundred grams” shall be added; and
(ii) clause (xix) shall be omitted; after the omitted serial number 18 in column (1) and entries relating
(c) thereto in column (2), the following new serial numbers and entries relating thereto in column (2) shall be added, namely:- “19. Drugs registered under the Drugs Act, 1976 (XXXI of 1976), or medicaments as classified under chapter 30 of the First Schedule to the Customs Act, 1969 (IV of 1969) , except PCT heading 3005.0000. 20. Petroleum Crude Oil (PCT heading 2709.0000).”. (8) in the Sixth Schedule,-
(a) in Table-1, in column (1),- serial numbers 1, 2, 3, 11, 12, 20, 21, 23, 46, 49, 50, 51, 52, 52A, 53, 54, 55, 57, 58, 60, 61, 63, 71, 72, 81, 84, 92, 99, 102, 104, 105, 109, 110, 113, 114, 116, 117, 126, 127, 129, 130, 131, 132, 134, 135, 136, 138, 139, 140, 141, 142, 146, 149, 150, 155 and 158 and entries relating thereto in columns (2) and (3) shall be omitted; and against serial number 13, in column (2), after the word “vegetables” the words” imported from Afghanistan” shall be inserted; for serial number 15 and entries relating thereto in columns
(2) and (3), the following shall be substituted, namely: - “15. Fruit imported from 0804.1010, 0804.1020, Afghanistan 0804.2000, 0804.3000, excluding apples 0804.4000, 0804.5010, PCT 0808.1000 0804.5020, 0804.5030,
0805.1000, 0805.2910, 0805.2100, 0805.2200, 0805.2990, 0805.4000, 0805.5000, 0805.9000, 0806.1000, 0806.2000, 0807.1100, 0807.1900, 0807.2000, 0808.3000, 0808.4000, 0809.1000, 0809.2000, 0809.3000, 0809.4000, 0810.1000, 0810.2000, 0810.4000, 0810.5000, 0810.6000, 0810.9010, 0810.9090, 0811.1000, 0811.2000, 0811.9000, 0813.1000, 0813.2000, 0813.3000, 0813.4010, 0813.4020 and 0813.4090”; for serial number 19 and entries relating thereto in columns
(2) and (3), the following shall be substituted, namely: - “19. Rice, wheat, wheat Respective heading.”; and meslin flour for serial number 32 and entries relating thereto in columns
(2) and (3), the following shall be substituted, namely: - “32. Newsprint and educational text 4801.0000, books but excluding brochures, 4901.9100, leaflets and directories
4901.9990 and 4903.0000.“.
(vi) for serial number 156 and entries relating thereto in columns
(2) and (3), the following shall be substituted, namely: - “156. Import of CKD kits by local Respective manufacturers of following heading”; Electric Vehicles:- i) Road Tractors for semi- trailers (Electric Prime Movers) (H) Electric Buses Three Wheeler Electric Rickshaw Three Wheeler Electric Loader Electric Trucks Electric Motorcycle
(b) in Table-2, in column (1),- serial numbers 1, 2,4, 9, 15, 16, 22, 23, 33 and 38 and entries relating thereto in columns (2) and (3) shall be omitted; for serial number 7 and entries relating thereto in columns (2) and (3), the following shall be substituted, namely - “Breads, vermicillies, nans, Respective heading.”; chapattis, sheer mal, bun and rusk excluding those sold in bakeries, restaurants, food
chains and sweet shops falling in the category of Tier-1 retailers.
(iii) after serial number 39 and entries relating thereto in columns
(2) and (3), the following new serial numbers and entries relating thereto in in columns (2) and (3) shall be added, namely:- poultry in excluding those sold brand name excluding those sold in retail packaging under a brand name 0601.1010, 0601.1090, 0602.1000, 0602.2000, 0602.3000, 0602.4000, 0602.9010 and 0602.9090 Respective headings Cereals other than rice, wheat, wheat and meslin flour
tubers, potato 0705.1900, 0705.2100, whether fresh, frozen or 0705.2900, 0706.1000, 0709.2000, 0709.3000, 0709.4000, 0709.5100, 0709.5910, 0709.5990, 0709.6000, 0709.7000, 0709.9000, 0710.1000, 0710.2100, 0710.2200, 0710.2900, 0710.3000, 0710.4000, 0710.8000, 0710.9000, 0712.2000, 0712.3100, 0712.3200, _ 0712.3300, 0712.3900 and 0712.9000 Respective headings Edible fruits and 0407.2900 commercial fertilizer) Locally 8471.3020 notebooks whether or not incorporating multimedia
kit and personal computers 51. Newspaper Respective headings”; and
(c) in Table-3, in the Annexure, in column (1), serial numbers 1, 2, 2A, 3, 4, 5, 6, 7, 8, 9, 11, 13, 14, 14A, 15, 15A, 1513, 17 and 21 and entries relating thereto in columns (2), (3) and (4) shall be omitted;
(9) in the Eighth Schedule,-
(a) in Table-1, in column (1),- serial numbers 4, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 20, 26, 27, 28, 29, 30, 34, 45, 46, 54, 55, 59, 61, 62, 63, 64, 66A, 66B, 68, 69 and 76 and entFies relating thereto in columns (2), (3), (4) and (5) shall be omitted; against serial number 66, in column (4), for the expression “10%”, the expression “12%” shall be substituted; for serial number 70 and entries relating thereto in columns (2), (3), (4) and (5), the following shall be substituted, nancely:- “70. Following locally Respective 1% Local manufactured heading supplies electric vehicles only”;
(i) Road Tractors for semi- trailers
(Electric Prime Movers) Electric Buses Three Wheeler Electric Rickshaw Three Wheeler Electric Loader Electric Trucks Electric Motorcycle
(iv) against serial number 72, in column (5), for the expression “1000cc”, the expression “850cc” shall be substituted;
(v) for serial number 73 and entries relating thereto in columns (2), (3), (4) and (5), the following shall be substituted, namely:- i 173. Locally manufactured Hybrid electric vehicle- Upto 1800 cc 87.03 8.5% From 1801 cc to 87.03 12.75%” 2500 cc
(vi) for serial number 75 and entries relating thereto in columns (2), (3), (4) and (5), the following shall be substituted, namely:- “75. Import of electric 8703.8090 12.5%” vehicle in CBU conditions
(vii) after the omitted serial number 76 and entries relating thereto, the following new serial number and entries relating thereto in columns (2), (3), (4) and (5) shall be added, namely:-
“77. personal 8471.3020 5% If imported computers and and in CBU Laptop 8471.3010 condition”; computers, and notebooks whether or not incorporating multimedia kit
(b) Table-2 shall be omitted;
(10) in the Ninth Schedule, in Table-II, in column (1), against serial number 1, in column (2),- against category E, in column (3), for the expression “Rs. 1,740”, the expression “17% ad valorem” shall be substituted; against category F, in column (3), for the expression “Rs. 5,400”, the expression “17% ad valorem” shall be substituted; and against category G, in column (3), for the expression “Rs. 9,270”, the expression “17% ad valorem” shall be substituted;
4. Amendments oi Islamabad Capital Territory (Tax on Services), Ordinance, 2001, (XLII of 2001)
In the Islamabad Capital Territory (Tax on Services), Ordinance, 2001 (XLII of 2001), the following further amendments shall be made, namely:-
(1) in section 3, -
(a) for sub-section (1), the following shall be substituted, namely:- “(1) Subject to the provisions of this Ordinance, there shall be charged, levied and paid a tax known as sales tax at rates specified
in column (4) of Table-1 of the Schedule to this Ordinance of the value of the taxable services rendered or provided in the Islamabad Capital Territory: Provided that the services specified in Table-2 of the Schedule shall be charged to tax at such rates and subject to such conditions and limitations as specified therein;“; and
(b) in sub-section (2), for the words “the Schedule to this Ordinance”, the expression “Table-1 or Table-2 of the Schedule to this Ordinance, as the case may be,” shall be substituted;
(2) in the Schedule, - the existing schedule shall be re-named as Table-1; and after Table-1, re-named as aforesaid, the following new Table-2 shall be added, namely:- “Table-2 PCT S. No. applicable
(l) 1.
(i) Construction projects (industrial no input tax and commercial) of the value admissible million per annum;
The cases where sales tax is otherwise paid as property developers or promoters; Government civil works including cantonment boards; organizations exempt from income tax; and where the covered area does not houses and 20,000 square feet for apartments. Services provided for personal care by 9810.0000, Five per cent 2. beauty parlours, clinics and slimming condition that no input tax Rs.3.6 million; or the facility of air-conditioning is not installed or available in the premises. 3. Services provided by freight forwarding 9805.3000 Five percent or whichever is higher subject to the condition that no input tax
adjustment or • refund shall be admissible. Five per cent
travel agents including all their allied 9805.5000 subject to the services or facilities (other than Hajj and Umrah). adjustment or refund shall be admissible.
subject to the workshops or undertakings (auto- condition that workshops; workshops for industrial no input tax machinery, construction and earth- appliances etc. Including computer hard ware; car washing or similar service stations and other workshops). Services provided by health clubs, gyms, 9821.1000, Five per cent physical fitness centres, indoor sports and 9821.2000 subject to the games centres and body or sauna massage centres. adjustment or refund shall be admissible. Services provided by laundries and dry subject to the cleaners, condition that no input tax adjustment or
refund shall be admissible. Services provided by property dealers and Respective Zero per cent condition that no input tax adjustment or refund shall be admissible. Services provided by car / automobile Respective Five per cent condition that no input tax adjustment or refund shall be admissible. Services provided or rendered by Respective Five per cent marriage halls and lawns, by whatever headings subject to the no input tax “shamiana” services and caterers. adjustment or refund shall be admissible. IT services and IT-enabled services. Respective Five Percent _ software development, system integration, web design, web development, web hosting and network design; and remote monitoring, graphics design, accounting
services, HR services, telemedicine centers, data entry operations, locally produced television programs and insurance claims processing. 12. Services provided by property developers 9807.0000 Zero per cent and promoters (including allied services) and subject to the relating to low cost housing schemes respective condition that sponsored or approved by Naya Pakistan sub-headings no input tax Housing and Development Authority or of heading adjustment or under Government’s Ehsaas programme. 98.14 refund shall be admissible.“;
5. Amendments of Income Tax Ordinance, 2001 (XLIX of 2001)
In the Income Tax Ordinance, 2001 (XLIX of 2001), the following further amendments shall be made, namely:-
(1) in section 2, after clause (17A), the following new clause shall be inserted, namely:- “(17B) “digital means” means digital payments and financial services including but not limited to- online portals or platforms for digital payments/receipts; online interbank fund transfer services; online bill or invoice presentment and payment services; over the Counter digital payment services or facilities; card payments using Point of Sale terminals, OR codes, mobile devices, ATMs, Kiosk or any other digital; payments enabled devices; or any other digital or online payment modes.“;
(2) in section 21, in clause (la), in the proviso, for the semi colon at the end, a colon shall be substituted and thereafter the following new proviso shall be added, namely:-
“Provided further that this clause shall be effective from such date as the Board may notify in the official Gazette;”, in section 153, in sub-section (3), in the proviso, in clause (c), for the semi
(3) colon at the end, a full stop shall be substituted and thereafter the following explanation shall be added, namely:- “Explanation.- For the removal of doubt, it is explained that the income of resident person referred to in sub-section (3) means the amount on which tax is deductible under sub-section (1) or (2) of this section.”;
(4) in section 165A, in sub-section (1),- in clause (d), for full stop at the end, a semi colon and the word “and” shall be substituted; and after the omitted clause (e), the following new clause shall be added, namely: - “(f) a list of persons containing particulars of their business accounts opened or re-designated during each preceding calendar month.”;
(5) in section 216, in sub-section (3),- in clause (s), for full stop at the end, a semi colon and the word “or” shall be substituted; and after clause (s), amended as foresaid, the following new clause shall be added and shall always be deemed to have been so added, namely:- “(t) in respect of any high-level public officials and public servants in BPS-17 and above, their spouses, children or benamidars, or any person in relation to whom the afore-mentioned persons are beneficial owner:
Provided that nothing in clause (t) shall apply to those who are expressly excepted under clause (iv) of sub-section
(m) of section 5 of the National Accountability Ordinance, 1999 (Ordinance No. XVIII of 1999). Explanation.- “High-level public officials” mean politically exposed persons as defined by a rule, regulation, executive order or instrument; or under any law for the time being in force.“, in section 233, after sub-section (3), the following explanation shall be added, namely:- “Explanation.- For the removal of doubt, it is explained that the income of person referred to in sub-sections (2B) and (3) means the amount on which tax is deductible under sub-sections (1) or (2A) of this section.”; after section 236C, the following new section shall be inserted, namely:- “236CA. Advance tax on TV plays and advertisements.-
(1) Any licensing authority certifying any foreign TV drama serial or a play dubbed in Urdu or any other language, for screening and viewing on any landing rights channel, shall collect advance tax at the rates specified in Division XA of Part IV of the First Schedule. Any licensing authority certifying any commercial for advertisement starring foreign actor, for screening and viewing on any landing rights channel shall collect advance tax at the rates specified in Division XA of Part IV of the First Schedule. The tax required to be collected under this section shall be minimum tax in respect of income arising from such drama serial or play or advertisement referred to in sub-section (1) or (2) of this section.“,
in section 236Q, after sub-section (3), the following explanation shall be added, namely:- “Explanation.- For the removal of doubt, it is explained that the income of person referred to in sub-section (3) means the amount on which tax is deductible under sub-section (1) or (2) of this section.”; in the First Schedule,- in Part I, in Division III,-
(i) in clause (b), for the expression “and (c)”, the expression “,(c) and (d)” shall be substituted; and (H) clause (c) shall be re-numbered as clause (d) and after clause (b), amended as aforesaid, the following new clause shall be inserted, namely:- “(c) 0% in case of dividend received by a REIT scheme from Special Purpose Vehicle and 35% in case of dividend received by others from Special Purpose Vehicle as defined under the Real Estate Investment Trust Regulations, 2015.”; in Part III, in Division I,-
(i) in clause (b), for the expression “and (ba); and”, the expression “,(c) and (d);” shall be substituted; and (H) after clause (b), amended as aforesaid, the following new clause shall be inserted, namely:- “(c) 0% in case of dividend received by a REIT scheme from Special Purpose Vehicle and 35% in case of dividend received by others from Special Purpose Vehicle as defined under the Real Estate Investment Trust Regulations, 2015; and”; and
(iii) clause (ba) shall be re-numbered as clause (d); and (C) in Part IV,-
(a) in Division V, in the Table, in the first column, against Serial Number (b), in the third column, for the expression “10% for tax year 2022 and 8% onwards”, the expression “15%” shall be substituted; and
(b) in Division VII, in clause (3), for the TABLE, the following shall be substituted, namely: “TABLE S.No. Engine capacity Tax
(2) (3)
(1) Up to 1000cc • Rs.100,000 1001cc to 2000cc Rs.200,000 2001cc and above Rs.400,000”; and
(c) after Division X, the following new Division shall be inserted, namely:- “Division XA Advance Tax on TV plays and advertisements The rate of tax to be collected under section 236CA shall be, - Foreign-produced TV drama serial or play Rs.1,000,000 per episode Foreign-produced TV play (single episode) Rs.3,000,000 Advertisement starring foreign actor Rs. 500,000 per second.”;
(10) in the Second Schedule,- (A) in Part I,- (I) in clause (99),- after the words “REIT Scheme”, the words “including Special Purpose Vehicle” shall be inserted; and in the explanation, after the word ’auditors”, the expression “and Special Purpose Vehicle shall have the same meaning as defined under the Real Estate Investment Trust Regulations, 2015” shall be inserted;
(ii) in clause (99A),- after the word “property”, the words “or shares of Special Purpose Vehicle” shall be inserted; and after the full stop at the end, the following new explanation shall be added, namely:- “Explanation.- For the purpose of this clause, Special Purpose Vehicle shall have the same meaning as defined under the Real Estate Investment Trust Regulations, 2015.”; and
(iii) in clause (132), for the sixth proviso, the following shall be substituted, namely: - “Provided further that the exemption under this clause shall be available to persons, who enter into agreement or to whom letter of intent is issued by the Federal or Provincial Government for setting up an electric power generation project in Pakistan on or before the 30th day of June, 2021 and who obtains the letter of support on or before the 30th day of June, 2023.”; (B) in Part IV, in clause (47B),-
after the word “scheme”, occurring for the second time, the words “including Special Purpose Vehicle” shall be inserted; and after the full stop at the end, the following new explanation shall be added, namely:- “Explanation.- For the purpose of this clause, Special Purpose Vehicle shall have the same meaning as defined under the Real Estate Investment Trust Regulations, 2015.”.
6. Amendments of Federal Excise Act, 2005
In the Federal Excise Act, 2005, in the First Schedule, in Table-1, in column (1),-
(a) against serial No. 55, in column (2),- against sub-serial (b), in column (4), for the expression “5%”, the expression “10%” shall be substituted; against sub-serial (c), in column (4), for the expression “25%”, the expression “30%” shall be substituted; and (Hi) against sub-serial (d), in column (4), for the expression “30%”, the expression “40%” shall be substituted;
(b) for serial No. 55B and entries relating thereto in columns (2), (3) and (4), the following shall be substituted, namely:-, “555. Locally 87.03 manufactured or assembled motor cars, SUVs and other motor vehicles, excluding auto
rickshaws principally designed for the transport of persons (other than those of headings 87.02), and till the 30th day of June, 2026 electric vehicles (4 wheelers) including station wagons and racing cars: of cylinder 2.5% ad val. capacity up to 1300cc of cylinder 5% ad val. capacity from 1301cc to 2000cc of cylinder 10% ad val.” capacity 2001cc and above against serial No. 55C, in column (4), for the expression “25%”, the expression “30%” shall be substituted; and against ,ser1alflo..,55D, in column (4), for the expression “7.5%”, the expression “10%” shall be substituted.