Taxation System in Pakistan

A PROJECT BY WIKIPEDIAS TREAM
SUBMITTED BY
WIKI
PEDIAS
NO
1
2
STUDENT NAME
ABDUL REHMAN
ZEESHAN AHMAD
AHMAD NUMAN
TAHIRA SIDIQUI
WAQAS
3
4
5
ROLL NUMBER
13262
13235
13271
13304
13270
SUBMITTED TO
SIR UMAR ZAKA
TOPIC
Page 1
1.
CUSTOM DUTY 2. FEDERAL EXCISE

DUTY
3. PROVINCIAL SALES TAX
SUBMISSION DATE
06/NOVEMBER /2015
Superior
University Lahore
RISK MANAGEMENT
ACKNOWLED
GEMENT
First of all we are thankful to Almighty Allah who in spite
of all our weaknesses enabled us for this type of project.
We are also indebted to our teacher SIR UMAR ZAKA for
their kind of guidance and supervision. Under their
direction we get the opportunity to polish our concealed
qualities and skill moreover, their timely help paved a
way for us to complete our work. It was surely their
method of teaching & eagerness for imparting knowledge
that we did not find much difficulty to give in to our
thoughts and information. They motivated us to work
hard
and
to
achieve
high-level
performance.
The
Page 2
development of this project has enabled us to better

understand the contents of the course. We feel highly
privilege to ascribe the most and ever burning flame of
our gratitude and deep scene of devotion to MR UMAR
who taught us TAX MANAGEMENT with heart and also
gave guidelines to this work.
RISK MANAGEMENT
Further on, we are grateful to our parents

it is the result of their prayers that we are succeeded.
Page 3
We dedicate this project to our highly regarded

teacher Mr. OMER ZAKA who provided us with all
the guidelines to prove ourselves. We are grateful
to him for giving us this opportunity to explore new
dimensions which will help us in a long run. He
guided us and taught us with different techniques,
which enabled us to complete this project, as well
as for unconventional style of teaching and
maintaining
very
open
and
competitive
atmosphere within the class, which made the
subject very interesting for us the most important
thing is that the knowledge which we have studied
in our subject was all that same which we observed
practically.
RISK MANAGEMENT
Page 4
RISK MANAGEMENT

WHAT IS MEANT BY TAX?
Tax is derived from the Latin word taxo; "rate" is a financial charge or
other levy imposed upon a taxpayer (an individual or legal entity) by a
state or administrative division.
(According to law)
An involuntary fee levied on corporations or individuals that is enforced
by a level of government in order to finance government activities.
Generally it is a sum of money demanded by a government for its
support or for specific facilities or services, levied upon incomes,
property, sales, etc.
What is taxation?
A process whereby charges are imposed on individuals or
property by the legislative branch of the federal government and
by many state governments to raise funds for public purposes.
What is tax management?
Page 5
Tax management relates to management of finances for payment

of tax, assessing the advance tax liability to pay tax in time. Tax
management has nothing to do with planning to save tax it is just
related with operational aspect of payment of tax i.e. while
managing his taxes a person ensures that he/she is making timely payment
of taxes without running out of the money and he is complying with all the
provisions of the law.
Main tax authority in Pakistan?
RISK MANAGEMENT

The Federal Board of Revenue (more commonly
known by its initials as FBR) is the semi-autonomous,
supreme federal agency of Pakistan that is responsible for
auditing, enforcing and collecting revenue for the government of Pakistan.
Most fundamental classification of taxes
The most fundamental classification of taxes is based on who collects the
taxes from the tax payer.
DIRECT
INDIRE
CT
Direct Taxes, as the name suggests, are taxes that are directly paid to the
government by the taxpayer. It is a tax applied on individuals and
Page 6
organizations directly by the government e.g. income tax, corporation tax,

wealth tax etc.
Indirect Taxes, are applied on the manufacture or sale of goods and
services. These are initially paid to the government by an intermediary, who
then adds the amount of the tax paid to the value of the goods / services and
passes on the total amount to the end user.
Important direct and indirect taxes
Direct taxes
RISK MANAGEMENT

1. Income Tax
Income Tax is paid by an individual based on his/her taxable income in a
given financial year. Under the Income Tax Act, the term individual also
includes Hindu Undivided Families (HUFs), Co-operative Societies, Trusts and
any artificial judicial person. Taxable income refers to total income minus
applicable deductions and exemptions.
Tax is payable if the taxable is above the minimum taxable limit and is paid
as per the differing rates announced for each tax slab for the financial year.
2. Corporation Tax
Corporation Tax is paid by Companies and Businesses operating in India on
the income earned worldwide in a given financial year. The rates of taxation
vary based on whether the company is incorporated in India or abroad.
3. Wealth Tax
Wealth tax is applicable on individuals, HUFs or companies on the value of
their assets in a given financial year on the date of valuation. Net wealth
here includes, unproductive assets cars, gold jewelry or bullion, boats,
yachts, aircrafts or urban land. It does not include productive assets like
Page 7
commercial property, stocks, bonds, fixed deposits, mutual funds etc.

4. Capital Gains Tax
The profits made on sale of property are taxable under Capital Gains Tax.
Property here includes stocks, bonds, residential property, precious metals
etc. It is taxed at two different rates based on how long the property was
owned by the taxpayer Short Term Capital Gains Tax and Long Term Capital
Gains Tax.
Indirect Taxes
RISK MANAGEMENT

1. Sales Tax
Sales Tax is charged on the sale of movable goods. It is collected by the
Central Government in case of inter-state sales (Central Sales Tax or CST)
and by the State Government for intra-state sales (Value Added Tax or VAT).
The rates of taxation vary depending on the product type.
2. Service Tax
Service tax is applicable on all services provided in India except a specified
negative list of services that are exempt. It is paid by the service provider to
the government who in turn collects it from the end user by the service
provider at the time of provision of such service.
3. Excise Duty
Excise duty is applicable on the manufacture of goods sold in India. Once
goods are manufactured, it is originally paid by the manufacturer directly to
the Central Government. When the goods change hands from the
manufacturer to the buyer, this tax is bundled by the manufacturer along
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with the cost of goods and passed on to the buyer.

Levels of law making in Pakistan
Pakistan has three levels of law-making often referred to as the three levels
of government that work together to provide Pakistanis with the services
they need.
The three levels are
Federal (or national) level
Provincial level
Local councils across the nation.
RISK MANAGEMENT
FEDERAL
PROVINCIAL
LOCAL
Federal level
Taxes issued and imposed by the federal, or national government.
Examples:
Sales tax
Federal excise duty
Custom duty
Capital value tax
Income tax
Page 9
Provincial level
Taxes issued and imposed by provincial government for specific province
Examples:
Professional Tax
Property Tax
Provincial Sales tax
Vehicle Tax
Entertainment Tax
Betterment Tax
Punjab Airport Tax
Agricultural tax
RISK MANAGEMENT

Provincial Excise
Page 10
Duty
Provincial Excise Duty
Land Revenue Tax
Luxury tax
RISK MANAGEMENT
Local level
Taxes issued and imposed by local administration of relevant territories.
Examples:
Auction of bs-stops and stands for other vehicles

Auction of vegetable markets and slaughter houses
Water Tax
Fee for advertisement boards
Fee for approval of construction maps
Types of taxes which we have to consider & work on
Provincial sales tax

Custom duty tax
Federal excise duty tax
Above three mention taxes issued and imposed by
Custo
m
duty
Federa
l
Excise
Duty
Federal
level
Provincia
l Sales
tax
Provincial
level
Provincial sales tax
Provincial sales tax (PST) is a retail sales tax that applies when a taxable good or
service is purchased.
Federal government has never remained empowered to levy the sales tax on services.
Law governing, scope, rates and exemptions of provincial

sales tax
Currently law related provincial Sales tax is provincial sales tax act 2012.
According to provincial sales tax act 2012 every person who is carrying out an
economic activity and thus engaged in providing taxable service or services is liable to
charge, collect and pay sales tax on such services.
Regarding talking about Punjab province Punjab Revenue Authority (PRA) to collect and
enforce sales tax on services. It has also legislated the Punjab.
The Provincial Sales Tax is payable by businesses and individuals who purchase
taxable goods or services in Saskatchewan or who import taxable goods or services for
consumption or use in the Province.
Provincial sales tax imposed only to the fourteen categories of services covered
under the repealed ordinance.
Hotels.
Clubs.
Caterers.
Advertisements on T.V & Radio
(including Cable TV).
Customs Agents.
Ship Chandlers.
Stevedores.
Telecommunication.
Insurance and Re-insurance.
Banking companies.
Non-banking financial institutions.
Stock brokers.
Shipping agents.
Courier services
Revenue collected history

Year
1995/96
1996/97
1997/98
Amount
($)
749,015,00
0
810,521,00
0
721,240,00
0
1998/99
710,740,00
0
625,974,00
0
701,670,00
0
735,514,00
0
763,930,00
0
799,862,00
0
931,346,00
0
1,056,236,
000
1,021,274,
000
929,865,00
0
1,108,628,
000
1,084,000,
679
1,186,991,
902
1,322,160,
753
1,284,892,
670
1,401,400,
000
1999/00
2000/01
2001/02
2002/03
2003/04
2004/05
2005/06
2006/07
2007/08
2008/09
2009/10
2010/11
2011/12
2012/13
2013/14
Tax collection authority for provincial sales tax is Punjab revenue authority for
Punjab and Sindh revenue authority for Sindh.
Provincial sales tax rates are 16 % currently generally if we talk about specifically
Punjab where as in sindh the proposed rates has been decreased from 15 to 14 %.
Amendments and exemptions according to new rules

New services brought to tax domain
Description
Ra
te
s
Punjab
Services in relation to transport of goods other than water,
through
16
%
pipeline, conduit or any other medium (other than inland

carriage of goods by road otherwise taxable or chargeable
to tax as such).
Service provided by person for intercity carriage of goods by
rail or road
16
%
excluding Service provided by an individual owner of a

vehicle for carriage of goods.
Services in relation to supply of tangible goods
16
including machinery, equipment and appliances for
use, without transferring right of possession and

effective control of such machine y, equipment and
appliances.
Public relation services including communication services
and
services
provided
by
public
relations
of
media
16
%
management businesses, communication specialists, media

researchers, and services provided by opinion poll agencies.
Services provided by accountants (including practicing
16
chartered or cost accountants), auditors, actuaries, tax
consultants (by whatever name called), practicing company

secretaries, receivers, liquidators, auctioneers and corporate
law consultants, whether individual or otherwise.
Domestic transportation of goods by air (other than courier
services
16
%
otherwise taxable or chargeable to tax as such)

Chartered flights services within or originating from Punjab
16
Debt collection and similar other recovery services
%
16
Supply
(including
%
16
delivery) services
Services provided by photography studios and event or
%
16
occasion
chain
management
photographers/film
or
distribution
makers
excluding
Non
corporate (individuals) photographers operating from small

road-side shops declared as such by the Authority.
Visa processing services including advisory or consultancy
16
services
for
foreign
education
or
for
migration,
visa
application filing, services provided by document collection

centers and subsequent assistance in visa processing
(including all ancillary services)
Sponsorship services
16
%
Sindh
Services provided or rendered by laboratories other than the
14
services relating to pathological, radiological or diagnostic
tests of patients.
Credit rating agency
14
Future brokers
14
%
%
14
%
14
%
14
%
14
%
14
%
14
%
Underwriter
Indenters
Commission agents
Packers and movers
Installation services
Technical inspection and certification services, including
quality control certification services and ISO certifications *

Valuation services, including competency and eligibility
14
testing services.
Following new services are also proposed to be inserted in Second Schedule

which shall be notified at the following reduced rates.
(Punjab)
Facilities for travel (by air):
o services provided or rendered in respect of travel
by air of passengers embarking from Punjab for air
travel or journey within the territorial jurisdiction of
Pakistan
Long routes
Short routes
Explanation: - For the purpose of this entry long
2,500/ticket
1,500/ticket
routes means journey exceeding 500 kilometers and

short routes means the remaining journeys.
services provided or rendered in respect of travel by air
of passenger embarking from Punjab for international air
travels for journey:
5,000/ ticket
Economy and economy plus
Club, business and first class
10,000 /
ticket
Exclusion:
Air
travel
services
provided
to
Hajj
or
Umrah
passengers, diplomats and supernumerary crew.
Punjab
Scope of services enhanced / revised
Catering services
Scope of catering services is enhanced to include ancillary or allied services such as

floral or other decoration, furnishing of space whether or not involving rental of
equipment and accessories.
Advertisement services
The exclusion of advertisement services on television and radio financed out of funds
provided by Government under an agreement of foreign grant-in-and is proposed by
substitution.
Courier services
The scope of courier services is proposed to be enhanced to include express cargo or

logistic services.
Franchise services
The Franchise services is proposed to include licensing services.
Construction services
The exclusions available to the following are proposed to be abolished: Construction

projects of value exceeding Rs 50 million Construction of industrial zones and other
organizations exempt from income tax Residential construction projects where
construction services are provided to construct more than one house or more than one
apartment building
Property developers/promoters
The bill proposes to bring in builders in the tax net.
Personal care
The scope of services pertaining to personal care is proposed to be enhanced to
include salons, spas (including saunas, Turkish baths and Jacuzzi) and similar other
establishments and hair transplants. However, the exclusion has been limited to parlor,
salon and clinic where the facility of air-conditioning is not installed or is not available
in the premises on any day of the financial year.
Freight forwarding agents
The sales tax in case of Freight Forwarding Agents is proposed to be increased from Rs
400 to Rs. 1000 per bill of lading
IT services
The scope of IT services is proposed to be massively enhanced to include Information

technology-enabled or information technology based services including software
development, software customization, software maintenance, system support, system
assembly, system integration, system designing and architecture, system analysis,
system development, system operation, system maintenance, system up-gradation
and modification, data warehousing or management, data entry operations, data
migration or transfer, system security or protection, web designing, web development,
web
hosting,
network
designing,
services
relating
to
enterprise
resource
or
management planning (including marketing of products}, development and sale of

smart phone applications or games, graphics designing, medical transcription, remote
monitoring, telemedicine, insurance claim processing, online retrieval and database
access or retrieval service.
Other consultants
The scope of services provided by other consultants is proposed to be enhanced to

include whole range and variety of services provided by event managers, evaluation
services, certification, verification and equivalence services, marketing or sales
services (including marketing agencies and online marketing or sales services),
surveyor services, training or coaching services (other than general education
services)
Share registrar
The scope of services provided by share registrars is proposed to be enhanced to

include services pertaining to issuance of shares. Furthermore, investor account
services, trustee or custodial, share registrar services and their allied or connected
services pertaining to transfer of shares, securities and derivatives have also been
brought into the tax ambit.
Fashion designer
The scope of services provided by fashion designers is proposed to be enhanced to

include use of brand name, logo or house mark (whether or not registered in the
manufacturing or trading of products)
Architect and town planners
The scope of services provided by town planners is proposed to be enhanced to include

landscapers and land scape designers.
Rent-a-Car
The scope of services provided in respect of rent a car is proposed to be enhanced to

include renting of all categories of vehicles meant for transportation of persons.
Medical laboratories: The bill proposes to restrict the exclusion provided in respect of
services relating to pathological or diagnostics tests done by laboratories only to tests
specifically pertaining to medical treatment purposes
Penalties enhanced
The bills proposes to change the penalty as follows: Under Sr. No. 5 following penalties are
proposed to be introduced in case a person fails to produce record or information despite
receipt of notice.
Rs. 25,000 First default
Rs. 50,000 each subsequent default
Under Sr. No. 1, minimum penalty is proposed to be enhanced from Rs. 10,000 to Rs. 100,000
for the Company and from Rs. 10,000 to Rs. 50,000 for a person other than Company in case
of non-compliance of compulsory registration.
Power to levy sales tax through rules / circulars

The Bill proposes to empower PRA to levy sales tax through rules and circulars.
Presently, Government of Punjab is empowered to levy sales tax through notification.
Time of retention of records enhanced

The bill proposes to extend the period of retention of record from 5 to 6 years.
Some important features of sales tax on services are as follow (Punjab)

The businesses who already have a FBRs registrations need not to apply to PRA for
new registrations. Their registrations will be automatically adopted by the PRA
computer system with the help of Pakistan Revenue Automation Ltd.
There is no exemption threshold for any of the taxable services except hotels about
which PRA will soon announce its decision.
There will be no input tax adjustment admissible in respect of tax liability
dischargeable on account of the application of the principles of origin and reverse
charge as envisaged in section 4 of the Act.
Apportionment formula shall apply where a person is a providing both taxable and
exempt (including non-taxable) services.
Credit of tax paid on goods and services paid either under Federal or under Provincial
sales tax law shall be admissible to the extent and subject to the conditions and
restrictions specified in the rules on the subject of adjustment of tax.
In respect of tax assessment, the principal concept of open market price has been
adopted for valuation of taxable services.
The whole system is based upon the globally applauded principles of voluntary
compliance such as self-assessment, self-recordkeeping, self-declaration and selfpolicing etc.
The system provides for the application of a structured approach towards taxation
and tax-implementation. That is why clear and detailed rules have been prepared to
curtail the discretion of the PRAs tax officials and protect the bonafide rights and
entitlements of the taxpayers.
Besides electronic filing of applications, statements, declarations and returns, manual
filing facility has also been provided.
Several provisions have been introduced whereunder bonafide mistakes and genuine
self-corrections of the taxpayers are automatically condonable under the system.
(Sindh)
Reduction in following sales tax rates have been announced which shall be
notified through notification

Description
Tax rates
Exi
Pro
sti
po
ng
se
Telecommunication Services
19.
d
18
Services
5%
10
%
6%
provided
by
program
production houses
producers
and
Sales Tax rates enhanced

Sales tax rates on following services are proposed to be enhanced under Second Schedule and
through notification:
Description
Tax rates
Exi
Pro
sti
po
ng
se
Other tracking services
15
d
18
Security alarm services
%
15
%
18
Legal practitioners and consultants
Accountant and auditors
%
5
%
6
Tax consultants
%
5
%
6
Construction services
%
5
%
6
Corporate law consultants
%
5
%
6
Services of inter-city transportation or carriage of
%
5
%
6
goods by road, pipeline or conduit
%
%
Following new services are also proposed to be inserted in Second Schedule
which shall be notified at the following reduced rates.
Description
Ra
te
s
10
Travel agents
Renting of immovable property services excluding
o
Renting of immovable property by a religious body to another
religious body.
Renting of vacant land or premises solely used for agriculture,
farming forestry, mining, etc.

Renting of land or premises solely used for outdoor sports
%
6
%
Renting of buildings solely used for residential or hostels of a

o
recognized educational institutions.

Renting of immovable property by hotels, motels, guest houses,
etc. liable to tax under heading 98.01.

Auctioneers
10
Dredging services
%
10
Ready mix concrete services
%
6
Intellectual property services
%
10
%
Scope of services enhanced
Scope for taxation of following services proposed to be enhanced by amending

definitions:
Advertising agent to include Media buying house.
Share transfer agent to include Share depository agent and services in relation to
transfer or redemption of derivatives
Penalties enhanced
Offences
Any person fails to intimate any change in the
penalties
Up
to
100,000,
particulars of registration.
to
Any person obstructs the entry of the SRB
Rs.
subject
minimum
penalty
of
Rs.
10,000
Higher
of
Rs.
100,000 or twice
officer for monitoring
the
Any person violates any embargo placed on

the economic activity.
amount
of
minimum tax
of
Rs.
100,000
an
Higher
or
amount of the tax
Any bank fails to attach or delays in attaching
sought
Higher
of
Rs.
100,000 or double
the bank account.
the amount of tax
Any person contravenes any of the provisions

of the rules or notification.
sought
Higher
of
Rs.
50,000 or double
the amount of tax
sought
Obligation to produce documents and provide information and

recovery of arrears (Sindh)
Presently, the power to require document or information which is only being
maintained under Sindh ST Act. The Bill proposes to empower SRB officer to require
from any person to also produce records being maintained under any other law for the
time being in force.
Presently, the SRB officer is empowered to only attach the bank account of the person.
Now, the Bill proposes to further empower SRB officer to require from the bank through
notice to not only attach the bank account of the person but also remit the amount
sought to be recovered. The SRB officer is also empowered under the proposed Bill to
place an embargo on the economic activity of the person till the amount of tax is paid
or recovered.
Power of SRB officers enhanced
Presently, the power to suspend the registration of a person rests with the Board. The Bill
proposes to empower any officer of SRB, subject to the authorization of the Board, to suspend
the registration of a person.
Exemption for collection of utility bills withdrawn

Banks, NBFC and NADRA Technologies Ltd were exempted from levy of sales tax on Utility Bills
Collection under SRB notification dated 18 June 2013. It is proposed to withdraw this
exemption with effect from 1 July, 2015 through notification.
Custom duty
A tax levied on imports (and, sometimes, on exports) by the customs authorities of a

country to raise state revenue, and/or to protect domestic industries from more
efficient or predatory competitors from abroad.
Customs duty is based generally on the value of goods or upon the weight,
dimensions, or some other criteria of the item (such as the size of the engine, in case
of automobiles).
Pakistan Customs is guardian of Pakistani borders against movement of contra band
goods and is a facilitator of legitimate trade. A major portion of the government
revenue is generated through taxes levied on the goods traded across the borders of
Pakistan. It also helps protect the domestic industry of Pakistan, discourage
consumption of luxury goods and stimulate development in under-developed areas.
Custom duty is kind of indirect tax which is realized on goods of international trade.
It is categorized into import duty and export duty levied upon import and export of
goods respectively.
Law governing, scope, rates and exemptions of custom duty tax
tax
Law governing related to custom duty in Pakistan
Customs Act, 1969 (main)
Customs Tariff
Main governing law in concerning custom duty currently in Pakistan is still custom act
1969. This was approved on 3rd march, 1969, circulated on 8th march, 1969 and
enforced on 1st January 1970.
It is imposed upon goods imported into Pakistan from any foreign country and are
transported without payments of duties from one custom station to another. It is
imposed on all or any of
the goods specified in the first schedule at a rate not exceeding one hundred % of the
value of goods and imposed on the goods at their imports majorly. The person who is
liable to pay excise duty is always on the manufacture or producer of goods. It is
imposed by government or FBR. The government may levy fee and service charge
by giving a notification in the official gazette. The rates of fee charges will also be
specified In the notification the government may impose such conditions, limitations,
restrictions as it may deem fit to impose. Charges may be levied for examination,
scanning, inspection, sealing, de sealing and valuation stock.
Most popular import items to Pakistan
Fairing kit
Home security alarm
Massager therapy set
Rendering machine
Pvc vinyl flooring
Lift
Ps4 game
Modelling clay
Dyson dc50
Microwave oven
Officers of custom:
A chief collector of customs

A collector of customs
A collector of custom (appeals)
An additional collector of customs
A deputy collector of customs
An assistant collector of customs
An officer of custom with any other designation
The places of customs ports are:

o Airports
o Land custom stations
Custom duty shall be levied at a rate not exceeding 35% of the value of goods.
Government imposed recently 35% custom duties on imports of various components of
vehicles.
These included:
1. Weather strips for doors and luggage compartments for motor cars of heading 87.03
and vehicles of sub-heading 8703.2113, 8703.2195, 8703.2240 and 8704.3130 except
weather strip molding (inner/outer) for glass.
2. Weather strips for doors and glass for vehicles of sub-heading 8704.2190
3. Weather strips for doors for vehicles of sub heading 8704.3190.
This will apply to 4008.1910, 4008.2110, 4008.2910.
For HS Code 4009.1110 the 35 percent customs duty has been imposed on the
following components for vehicles of chapter 87.
(1) Air cleaner hoses and water cooling system hoses (except turbo system hoses) for
vehicles of sub heading 8701.2020, 8701.2090, and 8701.2040
(2) Radiator / engine cooling system hoses and air hoses for vehicles of sub heading
8701.9020
(3) Air cleaner hoses, vacuum tank hoses and water cooling system hoses (except
turbo system hoses) for vehicles of sub headings 8702.1090 and 8702.9090
(4)Water cooling system hoses (except turbo system hoses) and air cleaner hoses for
vehicles of sub heading 8704.2219
(5) Air cleaner hoses for vehicles of sub headings 8704.2299 and 8704.2390
Following components for vehicles of chapter 87 falling under 4009.1120 the 35
percent duty has been imposed: (1) Water hoses of a kind used for engine cooling system / heater for motor cars of
heading 87.03 and vehicles of sub heading 8703.2323 and 8703.3223
(2) Hose side demister for motor cars (not exceeding 800cc)
(3) Water hoses used for engine cooling / heater systems, hoses brake reservoir, air
cleaner hose, cool air hoses for vehicles of sub heading 8703.2113, 8703.2193,
8703.2195, 8703.2240 and 8704.3130
(4) Water hoses of a kind used for engine cooling system / heater for vehicles of sub
heading 8704.2190
(5) Water hoses for engine cooling system, air cleaner hoses and brake oil reservoir
hose for vehicles of sub heading 8704.3190
(6) Engine cooling system / radiator hoses and fuel tubes, meant for industrial
assembly / manufacture of vehicles of sub headings 8703.2115 and 8704.3150
(7) Air intake hoses, radiator hoses, intercooler hoses and heater hoses, meant for
industrial assembly / manufacture of vehicles of sub heading 8703.3225.
Following components for vehicles of chapter 87 will be charged at 35 percent customs
duty: (1)
Water hoses of a kind used for engine cooling system / heater for motor cars of
heading 87.03 and vehicles of sub- heading 8703.2323 and 8703.3223

(2) Hose side demister for motor cars of heading 87.03 (not exceeding 800cc)
8703.2195, 8703.2240 and 8704.3130
heading 8704.2190
assembly / manufacture of vehicles of sub heading 8703.2115 and 8704.3150
duty: (1) Air cleaner hoses and water cooling system hoses (except turbo system hoses) for
8701.9020
(4) Water cooling system hoses (except turbo system hoses) and air cleaner hoses for
(5) Air cleaner hoses for vehicles of sub headings 8704.2299 and 8704.2390.
duty: (1) Water hoses of a kind used for engine cooling system /heater for motor cars of
(2) Hose side demister for motor cars of heading 87.03 (not exceeding 800cc)
8703.2195, 8703.2240 and 8704.3130
heading 8704.2190
industrial assembly / manufacture of vehicles of sub heading 8703.3225
duty: (1) Air cleaner hoses and water cooling system hoses (except turbo system hoses) for
8701.9020
(4) Water cooling system hoses (except turbo system hoses) and air cleaner hoses for
(5) Air cleaner hoses for vehicles of sub headings 8704.2299 and 8704.2390
duty: (1) Water hoses of a kind used for engine cooling system / heater for motor cars of
(2) Hose side demister for motor cars (not exceeding 800cc)
8703.2195, 8703.2240 and 8704.3130
heading 8704.2190
Currently Federal government has imposed regulatory duty in the range of 5 to 15
percent on the import of 314 products including edibles through SRO 121(I)/2015.
Rates imposed upon other items are as follow:
PCT
S.
cod
Description
Rate of
regulatory
807.
duty (%)
Papaws (papayas)
10
Sour cherries(Prunus
10
2
809.
21
cerasus)
813.
Cherries
10
402
170
Chewing gum, whether or
10
4.1
not sugar coated
170
White chocolate
10
4.90
Macaroni raw
10
Electric oven
10
Mushrooms of the
10
190
2.19
1
851
6.60
1
200
3.1
200
9.9
210
3.1
271
0.19
genus Agaricus
Mixtures of juices
10
Soya sauce
10
Furnace oil
Eaude cologne
10
Face powder
10
41
330
3.00
1
330
4.91
1
330
4.91
Talcum powder
10
Wire of other alloy steel
15
Cooking ranges
10
Water dispenser
10
Fully automatic machines
10
Food grinders
10
Cellular mobile phones
200 rupees per
272.
29
732
1.11
1
841
8.69
3
845
0.11
850
9.40
1
851
7.12
set
940
3.2
961
7.00
Other metal furniture
10
Vacuum flasks
10
Of high speed steel
15
Of silico-manganese steel
15
722
7.1
272
27.2
Recent Amendments & modifications

Duty rates in Pakistan vary from 0% to 100%, with an average duty rate of 20.67%.
Some goods can be imported free of duty (e.g. laptops and other electronic products).
According to the details, 15 percent duty has been imposed on the import of products
under PCT heading 69.07 and 69.08 like tiles, cubes and similar articles. Import of
waste and scrap of compressor under PCT heading 7204.4940 would also be subject to
a regulatory duty of 5.0 percent. Moreover, regulatory duty on products comes under
PCT heading 72.16 and 72.17 like importing angles, shapes and sections of iron or nonalloy steel as well as wire of iron or non-alloy steel would be subject to 15 percent.
However, regulatory duty up to 17.5 percent has been imposed on the import of flat
rolled products of other alloy steel of a width of 600mm or more as well as of a width of
less than 600mm under PCT heading 72.25 and 72.26. Similarly, import of bars and
rods, not rolled, in irregularly wound coils of other alloy steel under PCT heading 72.27
will be subject to 5.0 percent regulatory duty. Regulatory duty on import of wire of
other alloy steel has been raised to 20 percent, while on the import of other tubes and
pipes having circular cross-sections are also increased to 17.5 percent. Govt has also
imposed 10 percent on the import of standard wire, ropes, cables, plaited bands,
slings.
On the other hand, stainless steel under PCT heading 72.21, 72.22 and 72.23 have
been exempted from regulatory duty, while regulatory duty on silico-manganese steel
has been withdrawn.
Prohibition and restriction on importation and exportation
Counterfeit coins and currency notes and other such sort of products
Any offensive book, drawing, painting, representation, article, video, or other audio
recording.
Goods having a counterfeit trademark or a false trade description.
Goods involving infringements of copyrights, layout design, patent.
The federal government and FBR has general power to give exemption from custom
duties.
The federal government may exempt from the whole or any part of of the custom
duties chargable on or any of the following goods:
Goods imported into Pakistan
Goods exported from Pakistan
Goods
Goods
Goods
Goods
imported into any specified port, station or area.

exported from any specified port, station or area.
under exported from any specified area, port and station
under circumstances of exceptional nature
Under circumstances of exceptional nature, the board may exempt any goods from of
the whole or any part of custom duties chargeable thereon.
Federal excise duty
An excise duty is type of tax charged on goods produced within the country (as
opposed to custom duties charged on goods from outside the country) it is a tax on the
production or sale of good. It is a source of revenue for government to provide public
service.
Law governing related to federal excise duty in Pakistan
Federal Excise Act, 2005
The Federal Excise Act, 2005, was promulgated with effect from 1st July, 2005. The
word Federal was used in place of Central. Therefore, now the term Federal Excise
Duty is more appropriate as compared to old Central Excise Duty for the duties of
excise levied under the 2005 Act.
Federal Excise duty formerly known as Central Excised Duty is Levied by the
government of Pakistan as Federal Tax on the following:
Goods produced or manufactured in Pakistan
Goods imported into Pakistan
Such goods as the Federal Government may, by notification in the official Gazette,
specify, as are produced or manufactured in the non-tariff areas and are brought to the
tariff areas for sale or consumption therein
Services provided or rendered in Pakistan
Most popular import items to Pakistan
Fairing kit
Home security alarm
Massager therapy set
Rendering machine
Pvc vinyl flooring
Lift
Ps4 game
Modelling clay
Dyson dc50
Microwave oven
Machineries
Amendments in rates and other exemptions
Cigarette was followed by services (14.4 percent), beverages (9 percent), natural gas
(8.7 percent), cement (8.1 percent) and edible oil (2.9 percent). Only six major
spinners of FED contributed 95 percent of the total FED collection. The overall FED
revenue grew by 15 percent during 2013-14 over the collection of 2012-13. A cursory
look on head-wise collection shows that revenue from services recorded a healthy
growth of around 51 percent, followed by beverages (37.2 percent), edible oil (27.4
percent) and cigarettes (16.3 percent). Federal Excise Duty on the cement sector is
being replaced from specific basis (Rs. 400 per MT) to 5% on retail price. Federal Excise
Duty on international travel is being enhanced Enforced through Finance Bill, 2014,
effective from 01.07.2014. Federal Excise Duty on chartered flights is being proposed
to be levied at the standard rate on full amount charged Enforced through Finance Bill,
2014, effective from 01.07.2014. Further tax charged @ 1% on supplies made to
unregistered persons is being specifically excluded from the purview of output tax. .
Withdrawal of FED @ 10% on motor vehicles exceeding 1800cc. FED @ 10% was
imposed on motor cars, Sports Utility Vehicles (SUVs) and other motor cars exceeding
1800cc through Finance Act, 2013.
Reduction in rate of Federal Excise Duty on
Telecommunication Services is being proposed in view of increase in the scope of

telecommunication services with the advent of 3G and 4G technologies. Exemption on
import of plant, machinery and equipment for GilgitBaltistan, Balochistan Province and
Malakand Division and FATA is being proposed to promote industrialization, job creation
and economic uplift of the less developed regions. Enforced through Finance Bill, 2014,
effective from 01.07.2014. Exclusion of Federal Excise Duty on
Telecommunication Services subject to Provincial Sales Tax is being proposed. Enforced

through Finance Bill, 2014, effective from 01.07.2014. The rates of Federal Excise Duty
on cigarettes are proposed to be enhanced. Enforced through Finance Bill, 2014,
effective from 01.07.2014
The Federal Board of Revenue (FBR) has abolished Federal Excise Duty on services,
which will now be collected directly by provinces in the form of general sales tax (GST).
It is being abolished from 1st July. In Pakistan the minimum tax levied on cigarettes is
68.5 percent and it goes up to 81 percent for top brands. The amendments were
introduced through the Finance Act 2015 which is approved recently 2015.
As per decision, the rate of federal excise duty (FED) will be Rs2,500 per passenger on
long routes. The long routes mean journey exceeding 500kms. The rate of duty will be
Rs1,250 on short routes, which means remaining journeys other than socio-economic
routes.
The rate of duty for socio-economic routes will be Rs500. The socio-economic journey
means the routes along the Balochistan coastal belt.
The routes, which are exempt from duty, will remain the same.
On international routes, the rate of FED will be Rs5,000 per passenger on economy and
economy plus and Rs10,000 on club, business and first class.
Through another amendment, every company not quoted on stock exchange issuing
bonus shares to the shareholders of the company shall deposit tax within 15 days of
the closure of the books at the rate of the five per cent of the value of the bonus
shares.
If a shareholder neither makes payment of tax to the company nor collects its bonus
shares, within three months of the date of issuance of bonus share, the company may
proceed to dispose of its bonus shares to the extent it has paid tax on its behalf.
Through another amendment, the government has asked the non-profit organisations
to submit exemption certificate for getting exemption from income tax.
All the goods and services are exempt under section 16, except:
(a) the goods and services specified in the First Schedule, which shall be charged to
Federal excise duty as, and at the rates, set-forth therein;
(b) The goods and services specified in Third Schedule shall be exempt from duty
subject to such conditions and restrictions, if any, specified therein and no adjustment
in terms of section 6 shall be admissible in respect of goods exempt from duty of
excise whether conditionally or otherwise; and
(c) The goods as mentioned in the Second Schedule shall be chargeable to FED in the
same manner as provided in the Sales Tax Act, 1990, as provided in section 7 of the
Federal Excise Act, 2005.
Our learnings
There are collection of things which we learned during this kind of project
the first thing which is worth mentioning here that how to coordinate with
others and how much it is necessary for successfulness of any task, our
collective learning experience was advantageous we learn a lot of things
which we never have an idea or experienced before and we just read it out
theoretically on books. We learn what is tax exactly its types how much
tax and its management is necessary for a person and get to know its
importance and worth. Furthermore, we also get to know how to find out
their rates, scope, governing law and new amendments and exemptions
related type of laws By and large, it was a pleasant and useful experience.
Adding on, we learn how to act as a team in a professional way. We all
learnt the clarity, roles and contribution in a group. We learnt how to
mutually work as a team. We further gain knowledge of how time
management is important while you are engage in any sort of activity,
how to execute things on time and how to plan them so that we can
achieve them on time.We also find out that how

conflicts can be tackle out during your work and
how
collective team work is important when you are

working in a project. For sure
it will prove
fruitful
for all of us in future INSHALLAH.
Appendices
Websites
http://attemptnwin.com/answers/what-is-meant-by-tax-what-arethe-major-categories-of-taxes/
http://dictionary.reference.com/browse/tax
https://in.finance.yahoo.com/news/basics-explained--what-aredirect-and-indirect-taxes-064840748.html
http://www.businessdictionary.com/definition/federaltaxes.html#ixzz3q9OTWkhK
www.slideshare.net/BASIT554/tax-structure-of-pakistan
http://www2.gov.bc.ca/gov/content/taxes/sales-taxes/pst
https://pra.punjab.gov.pk/SOP/Download/Punjab_ST_on_Services_
An_overview.pdf
http://finance.gov.sk.ca/taxes/pst/
http://www.dutycalculator.com/country-guides/Import-duty-taxes
when-importing-into-Pakistan/
http://www.samaa.tv/pakistan/2011/07/fbr-abolishes-fed-onservices/

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A PROJECT BY WIKIPEDIAS TREAM

CUSTOM DUTY 2. FEDERAL EXCISE

A PROJECT BY WIKIPEDIAS TREAM

development of this project has enabled us to better

A PROJECT BY WIKIPEDIAS TREAM

Further on, we are grateful to our parents

We dedicate this project to our highly regarded

A PROJECT BY WIKIPEDIAS TREAM

A PROJECT BY WIKIPEDIAS TREAM

Tax management relates to management of finances for payment

A PROJECT BY WIKIPEDIAS TREAM

organizations directly by the government e.g. income tax, corporation tax,

A PROJECT BY WIKIPEDIAS TREAM

commercial property, stocks, bonds, fixed deposits, mutual funds etc.

A PROJECT BY WIKIPEDIAS TREAM

with the cost of goods and passed on to the buyer.

A PROJECT BY WIKIPEDIAS TREAM

A PROJECT BY WIKIPEDIAS TREAM

Auction of bs-stops and stands for other vehicles

Provincial sales tax

Provincial sales tax

Law governing, scope, rates and exemptions of provincial

Revenue collected history

Amendments and exemptions according to new rules

pipeline, conduit or any other medium (other than inland

excluding Service provided by an individual owner of a

including machinery, equipment and appliances for

use, without transferring right of possession and

management businesses, communication specialists, media

chartered or cost accountants), auditors, actuaries, tax

consultants (by whatever name called), practicing company

otherwise taxable or chargeable to tax as such)

Debt collection and similar other recovery services

corporate (individuals) photographers operating from small

application filing, services provided by document collection

services relating to pathological, radiological or diagnostic

Packers and movers

Technical inspection and certification services, including

quality control certification services and ISO certifications *

Following new services are also proposed to be inserted in Second Schedule

Explanation: - For the purpose of this entry long

routes means journey exceeding 500 kilometers and

Economy and economy plus

Club, business and first class

passengers, diplomats and supernumerary crew.

Scope of catering services is enhanced to include ancillary or allied services such as

The scope of courier services is proposed to be enhanced to include express cargo or

The Franchise services is proposed to include licensing services.

The exclusions available to the following are proposed to be abolished: Construction

The bill proposes to bring in builders in the tax net.

Freight forwarding agents

The scope of IT services is proposed to be massively enhanced to include Information

management planning (including marketing of products}, development and sale of

The scope of services provided by other consultants is proposed to be enhanced to

The scope of services provided by share registrars is proposed to be enhanced to

The scope of services provided by fashion designers is proposed to be enhanced to

Architect and town planners

The scope of services provided by town planners is proposed to be enhanced to include

The scope of services provided in respect of rent a car is proposed to be enhanced to

Power to levy sales tax through rules / circulars

Time of retention of records enhanced

Some important features of sales tax on services are as follow (Punjab)

notified through notification