ISLAMABAD: Federal Board of Revenue (FBR) on Wednesday notified rules to implement new taxation regime on import of goods, which was introduced through Twelfth Schedule of Income Tax Ordinance, 2001.
The FBR issued SRO 715(I)/2020 to notify the rules for implementation of new tax rates on import of goods.
Through Finance Act, 2020 new 12th Schedule was introduced for rationalizing tax on imports by shifting from person-specific rates to goods specific rates cascaded according to the type of goods, with tax at 1 percent for capital goods, 2 percent for raw materials and 5.5 percent for finished goods irrespective of status of the importer.
However, the prevailing concessional rates on certain items such as remeltable scrap of iron and steel, potassic and urea fertilizers, LNG, gold, cotton, goods that were importable by manufacturers under the rescinded SRO 1125(I)/2011 dated 31.12.2011, mobile phones etc. are being maintained.
The provisions of the new rules introduced to Income Tax Rules, 2002 will apply to addition, omission or amendment of entries in the Twelfth Schedule and application of reduced rate on goods falling under Part III of the schedule imported by persons as raw material for its own use.
A three-member committee headed by Member Inland Revenue Policy, FBR has been constituted under the new rules. The other two members shall comprise of Member Inland Revenue Operations and Member Taxpayers Audit.
The committee has been empowered to add in the Twelfth Schedule of the Ordinance any entry or omit any entry therefrom or amend any entry therein.
Further, the chairperson of the committee may, suo motor or an application of a taxpayer being an importer of such goods, place a matter before the committee by way of convening a meeting including a virtual meeting or by way of circulation which shall decide the matter within sixty days.
The FBR also issued procedure for import under an exemption certificate and a reduced rate certificate.