Amendment in the Sales Tax Rules, 2006 - Electronic Monitoring of Production of Specified Goods

Government of Pakistan Revenue Division Federal Board of Revenue ***** Islamabad. the l4'h March,2025. NOTIFICATION (Sales Tax) S.R.O.364 (Iy2025. - In exercise ofthe powers conferred by section 50 & 40C ofthe Sales Tax Act, 1990, read with section 40 & 45A ofthe Federal Excise Act, 2005. the Federal Board ofRevenue is pleased to direct that the following further amendments shall be made in the Sales Tax Rules. 2006, namely:- In the aforesaid Rules.- (l) in Chapter XIV-BA, in the heading, for the words "VIDEO ANAIYTICS RULES FOR ELECTRONIC MONITORING OF PRODUCTION OF SPECIFICED *ELECTRONIC GOODS". the words MONITORING OF PRODUCTION OF SPECIFIED GOODS" shall be substituted. (2) in rule 150 ZQR. - "video surveillance" the comma and words ", video (a) after the words analyics solution" shall be inserted: and (b) in the proviso, after the word "analytics" the words "solution and digital eye" shall be inserted. (3) for rule 150 ZQS, the following shall be substituted. namely:- "f50ZQS. Definitions.- In this Chapter, unless there is anyhing repugnant in the subject or context,- (a) "authorized vendor" means a person who is authorized by the Board under these rules: (b) "approval committee" means a committee comprising of the officers notified by the Board for the approval of vendors ofequipment to be installed at production Iines of specified goods; (c) "applicant" means any person who applies for approval of its equipment for electronic monitoring of production of specified goods under the rules: (d) "CCU" means Central Control Unit established by the Board"; (e) "digital eye" means Board's software. which can be used to identify specific objects. behavior or attitudes and. rvhich can be used fbr recording and capturing production count in a video footage; (l) "person" means person as defined under section of the lncome Tax Ordinance,200l ; I

(g) "pre-qualification" means the selection of authorized vendor on lhe basis ofevaluation criteria given in these rules; (h) "production monitoring equipment" means hardware, associated software and any other equipment specified by the Board."l "intelligent video analytics" means a system (i) "video analytics" or for electronic monitoring ofproduction on real-time basis; and surveillance" means recording of production process using 0) "video recording devices." (4) for rule 150 ZQT. the following shall be substituted, namely: - "150 ZQT Goods to be monitored electronically- (l) Production of specified goods, manufactured in Pakistan, shall be monitored through video surveillance. video analyics solution and digital eye by installation of production monitoring equipment at production lines. as are approved by the Board for.- (a) real time capture oiproduction process; (b) real time collection of data that shows production through object detection and object counting; (c) transmission ofdata to Central Control Ljnit at Board on real time basis, storage and archiving ofdatal (d) detection of unexpected stops; (e) quantitative analyses ofproductions: and (0 data analyics for required legal actions. goods shall remove (2) No person engaged in manut'acturing of specified the production from its business premises unless it has undergone the process ol production monitoring under thcse rules." (5) in rule 150 ZQU, - (a) in sub-rule (l), for the word ''video". the word "production'' shall be substituted and thereafter at the end the word "excluding digital eye'' shall be deleted; and (b) in sub-rule (2), for the word "video", the word "production" shall be substituted and thereafter at the end the words "excluding digital eye" shall be deleted. (6) in rule 150 ZQV. sub-rule (4), shall be omitted (7) in rule I 50 ZQW,- (a) for sub-rule (l), the fbllowing shall be substituted, namelyi- "( I ) A person shall tile an application for approval as authorized vendor under these rules shall be made in duplicate to the Boardi' (b) for sub-rule (2), the following shall be substituted, namely:- "(2) An application under sub-rule (l) shall be accompanied by all the supportive and relevant documents including the following, namely:- (a) comprehensive profile ofthe person; (b) brief about managerial and technical personnel indicating name. )

position. qualifi cation and experience: (c) total number ofcurrent employees; (d) list of major clientele; (e) technical documents showing relevant capacity ofthe video equipment; (0 complete history of activities undertaken and synopsis of the projects done; (g) current commitments and status of in-hand proiects; h ) National Tax Number (NTN) and Sales Tax Registration (STRN) certificate: (i) audited accounts ofthe last three financial years; Computerized National ldentity Cards (CNlCs) of the directors and o members; (k) undertaking that the person has never been blacklisted by any Covernment or private department or organization and has not been involved in fiscal fraud: and (l) any other document required by Board.'' (c) sub-rule (3) shall be omitted. (8) for rule 150 ZQX, the following shall be substituted, namely: - "150 ZQX. Criteria for grant of an authorization. - The authorized vendor shall be required to demonstrate working of production monitoring equipment as specified by the Board." (9) fbr rule 150 ZQY, the following shall be substituted. namely: - *150 ZQY. Functions and responsibilities of IT team of Board.- IT team shall perform functions as specified by the Board." ( I 0) in rule I 50 ZQZ,- (a) in sub-rule (5), for the word 'thirty", the word "sixty" shall be substituted; (b) in sub-rule (6). for the word "licensing", the word "approval" sha[[ be substituted: (c) for sub-rule (8), the following shall be substituted, namely: - "(8) The qualified applicant shall be required to deposit an unconditional bank guarantee equivalent to five percent of the project cosl or rupees five million, whichever is lower to the approval committee, before issuance of the authorization under these rules.": and (d) for sub-rule (9). the following shall be substituted. namely: - "(9) The bank guarantee shall be valid for entire duration of the authorization and shall be encashable in case of violation ofthese rules or terms of authorization.' (r l) in rule I 50 ZQZA, - (a) after sub-rule (3), the following new sub-rule shall be added, namely:- "(3A) The vendor shall be responsible to procure, install and maintain production monitoring equipment at the production lines."; (b) for sub-rule (4), the following shall be substituted, namely: -

"(4) The vendor shall specifo the expected delivery and installation of production monitoring equipment at production lines. which shall not exceed ninety days from the date olpurchase order."; (c) for sub-rule (5), the following shall be substituted. namely: - "(5) The vendor shall also assist the tT team of Board to perform their functions."; and (d) for sub-rule (9), the following shall be substituted, namely: - "(9) The vendor shall also be responsible for performing following functions namely:- (i) all upgrades ofthe associated software; (ii) all bug tixes; and problem in the (iii) immediate response and repair of any technical system during holidays or working days to cover the major. minor and moderate problems for unintenupted working ofthe system.". (12) rule 150 ZQZB. shall be omitted I 50 ZQZC. the following shall be substituted, namely: -( I 3) for rule "150 ZQZC. Technical and training support. ( I ) The authorized vendor shall undertake to upgrade, as per the new technological requirement' the installed IT structure. related softrvare, and communication equipment etc., as and when required. (2) The authorized vendor shall arrange to provide comprehensive technical and operational training to the lR officers and oflicials and other concerned officials and ensure provision ofall documentation and technical manuals, wherever and whenever required. (3) Appraisal reviews of functioning and efficacy of the equipment shall be carried out by Board." (14) for rule 150 ZQZD, the following shall be substituted. namely;- the t *150 ZQZD. Fee and charges.-( ) The vendor shall charge to manufacturer fee for the purchase, installation, operation and maintenance of production monitoring equipment. formations or the (2) No fee whatsoever shall be charged from any of the field Board. request of any (3) The approval commitlee upon its own motion or on the manufacturer, may decide the marimum amount of fee and charges which can be collected by the authorized vendor from the manufacturer(s). a public notice (4) The approval committee shall notifo fees and charges through for information ofall the relevant persons. not be revised in (5) The fee and charges determined in accordance with rule will normal circumstances during the duration ofthe authorization. has undergone significant and (6) In cases rvhere the basis of such determination material change or where major economic disruption has occuned' the authorized vendor may file a petition before the approval committee to revise the fees or charges.

in sub-rule (6) revise (7) The approval committee may in circumstances mentioned such fees and charges: Provided that in case where petition has been filed for upward revision of fees and charges. the manufacturer shall be given an opportunity to present their point of view during the proceedings." where the petition for upward revision has (8) The authorized vendor may in case been rejected, will have the option to request the approval committee for cancellation ofthe authorization issued under these rules. (9) The approval committee on receipt of such a request under sub-rule (8), may cancel the authorization forthrvith." -(8) in rule 150 ZQZE, (a) in sub-rule (l), in clause (a), for the word "FBR" the word "Board" shall be substitutedl (b) after clause (a), the following new clause shall be added, namely:- "(aa) sefting up and maintenance of information technology (lT) infrastructure inctuding intemet as specified by the Board, wherever needed. for the purposes of these rules.": (b) in clause(b), for the word "intelligent video analytics or digital eye" the words "production monitoring equipment" shall be substituted; (c) in clause(c), the word "excluding digital eye solution" shall be omitted; (d) in clause(d), for the words "intelligent video analYtics and digital eye solution" the words "production monitoring equipment" shall be substituted. (e) in clause(e), for the word "and" the comma and rvord "'CCU" shall be substituted and therealler, for lhe words "twenty-four hours" the words "one hour" shall be substituted and for the words "intelligent video analytics anti digital e1e solution", the words "installed system" shall be substituted; (r) in clause (f), for the word "FBR", the word "Board" shall be substituted; (s) in clause (h). for the words "Commissioner lnland Revenue", the words "Commissioner Inland Revenue or Board" shall be substituted; (h) in clause (i). for the words "twenty-four hours", the rvords "one hour" shall be substituted and thereafter. after the word "Commissioner lnland Revenue" occurring for the first time. the comma and words ",CCU" shall be inserted; and (i) in clause O, for the words "Commissioner Inland Revenue", the words "Commissioner Inland Revenue or Board" shall be substituted." I 50ZQZG. tbr the words "FIIR", the word "Board" shall be substituted( l6) in rule lC. No.3(8)ST&FE-Policy/20241 v .0 Second Secretary (S l