[email protected] BUDGET DIGEST 2016-17€¦ · BUDGET DIGEST 2016‐17 J.A.S.B. & Associates, Chartered Accountants Member of Morison KS International Provincial Sales

KARACHI OFFICE

1104, Uni Tower,

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Karachi.Phone :+92(21)32468154-5

+92(21)32468158

Fax : +92(21)32468157

ISLAMABAD OFFICE

Mezzanine Floor,

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I&T Center, G-8/4,

Islamabad.

Phone : +92-51-2253303-6

Fax : +92-51-2253307

[email protected]

BUDGET DIGEST

2016-17

J.A.S.B. & Associates Chartered Accountants Member of Morison KS International

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BUDGET DIGEST

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J.A.S.B. & Associates, Chartered Accountants

Member of Morison KS International

PREAMBLE This digest summarises important changes proposed in the Finance Bill 2016 (herein after referred as “Finance Bill”) relating to Income Tax, Sales Tax, Federal Excise Duty and Customs Duty and has been prepared for the guidance and information of our clients and staff only. Subject to approval of the National Assembly, all changes through the Finance Bill is effective from July 1, 201, unless otherwise specifically stated. It is recommended that while considering the application of the proposed amendments discussed here‐in‐after, reference should be made to the specific wordings of the relevant statute. The digest can be accessed & downloaded from www.jasb‐associates.com

J.A.S.B. & Associates June 04, 2016

Chartered Accountants

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VOTE OF THANKS We would like to sincerely thank the team JASB for putting in round the clock efforts to make this

Budget Digest 2015‐16 possible in such a short time. We hope and believe that this document would

assist our clients and team members in better understanding and evaluation of the Budget proposals.

As part of our strategy for continuous improvement, we would appreciate feedback on the document.

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TABLE OF CONTENTS

1. Budget at a Glance 4

2. Salient Features 6

3. Income Tax 10

4. Sales Tax 29

5. Federal Excise Duty 33

6. Customs 39

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2. SALIENT FEATURES

INCOME TAX

Super tax applicable for tax year 2015 has been proposed to be extended to tax year 2016.

Fixed tax Regime for Builders and Developers has been proposed for projects initiated and approved after July 1, 2016.

Income from property for individuals and AOPs is proposed to be taxed as a separate block of income on gross income basis.

In case income of a business is exempt, it is proposed that the depreciation be deemed to be allowed during the exemption period.

Capital gains on sale of securities have been proposed to be taxable irrespective of the holding period.

The right to surrender losses within a group is proposed to be restricted to the percentage holding in the entity.

Tax credit for investment in health insurance and deductible allowance for educations expenses have been proposed while limit for deductible allowance for profit on debt has been proposed to be increased.

Various Tax credit for employment generation and investment have been proposed to be extended and increased

Capital gains on sale of immovable property have been proposed to be taxed at a flat rate of 10% irrespective of holding period while holding period of more than five years have been proposed to be exempt.

Foreign trust has been clarified to be included in the definition of Company similar to local trust.

The threshold for applicability of minimum tax on individuals and AOPs has been proposed to be reduced from Rs. 50 million to Rs. 10 million from tax year 2017.

It is proposed that the taxable limit of 50,000 rupees for cash withdrawals for a bank and banking transactions shall be considered for aggregate of all transactions in a single day from all bank accounts.

Advance tax on sale and purchase of shares of listed companies has been proposed to be increased from 0.01% to 0.02%.

Advance tax on purchase of immovable property has been proposed to be increased to 2% for filer and 4% for non‐filer.

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Provincial Sales Tax authorities are proposed to collect 3% of the turnover from a provincial sales tax registered person, being a non‐filer.

Various exemptions have been proposed for Gawadar port, including exemption of income derived from Gawadar port operations for five group companies of China Overseas Ports Holding Company Limited, contractors and subcontractors of these companies, dividend from these companies, exemption from minimum tax, and exemption from tax on profit on debt for foreign lenders.

Exemption for inter corporate dividends in a group structure (other than 100% owned group) is proposed to be abolished.

Exemption of export of computer software, IT Services and IT enabled services is proposed to be extended for three years.

Rationalized minimum tax regime for specified service sectors extended to June 30, 2017 whilst also including IT services and IT enabled services.

Entire income of insurance business proposed to be taxed at the applicable corporate tax rate.

Scope of Eighth Schedule enhanced to include collection of tax on gain on redemption of mutual fund units and future commodity contracts of PMEX.

Services rendered / contracts executed outside Pakistan to be taxed at higher rates.

SALES TAX

Definition of “cottage industry” proposed to be amended to enhance turnover limit to Rs.10 million to exclude small manufacturers

Definition of “Due date” proposed to amended to allow for different filing dates for different annexures of sales tax return

Definition of “input tax” proposed to be amended to exclude “provincial sales tax”

Section 7 & 8 proposed to be amended to introduce further conditions for adjustment/ claim of input tax

Section 11 proposed to be amended to provide for assessment powers in respect of sales tax withholding rules

Procedure prescribed for transfer of sales tax activity by registered person

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Sales tax on Mineral water bottle proposed to be charged at retail price Zero rating on stationery, milk, fat filled milk proposed to be

withdrawn though exemption still intact Exemption from sales tax proposed to be provided on Premixes for

growth stunting, Laptops, Personal computers, Pesticides Rate of sales tax on poultry ingredients, medium priced mobiles and

smart phones proposed to be increased

FEDERAL EXCISE DUTY

Federal Excise Duty on Aerated Waters is increased by 100bps (1%)

Federal Excise Duty on locally manufactured cigarettes is also proposed to be increased.

It is proposed to charge federal excise duty on all cements at the rate of Re. I per kg instead of 5% of the retail price

It is proposed to withdraw federal excise duty on white crystalline sugar.

It is proposed to withdraw federal excise duty on certain services provided in the province where these are chargeable to sales tax on services

CUSTOMS

It is proposed to grant concessions of Custom Duty for dairy, livestock & poultry sectors, fish farming, fish feed pellet (floating type) machines, fish / shrimp feed.

It is proposed to grant exemption from Custom Duty on import of Premixes, disposal of old & used ambulances imported by Edhi Foundation, Water Quality Testing Kits, Linear Akyl Benzene, cool chain machinery etc.

It is proposed to increase the period of relief on import of Solar Panels till June, 2017.

It is proposed to enhance in scope of exemption for charitable non‐profit making Institutions Operating Hospitals, Renewable Energy Technologies etc.

It is proposed to reduce custom duty on local manufacturing of LED lights, Raw Materials of PVC Resin, White Spirits, Stamping Foil, Fatty Alcohol Ethoxylate, CFC Free Gases, Thermostats of Deep Freezers etc.

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It is proposed to rationalize custom duty on Betal nuts and Betal Leaves Almonds, Frozen Fish etc.

It is proposed to increase custom duty on Medium Density Fiber Board, Cement Clinker, Semi Printed/Printed Security Paper, Live Chicken stock and Eggs of Chicken, Birds eggs (not in shell) etc.

It is proposed to remove regulatory duty from Bead Wire for tyres manufacturers, Carbon Steel Strips used by Razor blade manufacturers etc.

It is proposed to levy regulatory duty on Powdered Milk and Whey Powder at the rate of 25%.

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3. INCOME TAX

Super Tax [Section 4B, Rule 7C, Seventh Schedule] The super tax initially imposed vide finance act 2015 on banking companies and taxpayers having income of Rs. 500 million or above, at the rate of 4% and 3% respectively for tax year 2015 has been proposed to apply for tax year 2016. In addition, the definition of income for this section has been proposed to exclude the effect of depreciation and previous business losses. Tax on Builders & Developers [Section 7C, 7D, 113A, 113B, & Division VIIIA & VIIIB of Part 1 of First Schedule] A Fixed Tax Regime has been proposed for Builders and Developers, whereby the tax liability of the builders shall be determined on the basis of area developed. It appears that the Government has finally decided the manner of taxation of this sector, however, the mode and manner for payment and collection of tax is yet to be prescribed. In 2013, minimum tax regime was introduced by the Government, however, it was not implemented and in 2015, it was suspended till 2018. Now the minimum tax regime has been proposed to be replaced with final taxation regime. The proposed final taxation is proposed to be applicable for projects initiated after 1 July 2016 at the following rates for Builders and Developers respectively:

Areas Commercial

Residential Sq. Ft.

Upto 750 751 to 1500 1501 & more

Rs. per Sq. Ft.

A 210 20 40 70

B 210 15 35 55

C 210 10 25 35

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Areas Commercial

Residential Sq. Yd.

Upto 120 121 to 200 201 & more

Rs. per Sq. Yd.

A 210 20 40 70

B 210 15 35 55

C 210 10 25 35

Income from Property [Section 15, 15A, Division VIA Part I &Division V Part III of First Schedule] Rental income (income from property) was previously subject to normal taxation for Individuals, AOPs and Companies while deduction as mentioned in section 15A (maintenance, local taxes, collection charges etc.) were allowed to be deducted to arrive at net taxable rental income. For individuals and AOPs, now the rental income is proposed to be taxed as a separate block of income on gross income basis and deductions would not be allowed. The withholding tax rates slab for individuals and AOPs have also been revised and uniform slab rates for withholding and taxation have been revived as following:

Rental Income Proposed Rate of Tax

Up to 200,000 ‐

200,001 to 600,000 5%

600,001 to 1,000,000 20,000 + 10% of the amount exceeding 600,000

1,000,001 to 2,000,000 60,000 + 15% of the amount exceeding 1,000,000

2,000,001 and above 210,000 + 20% of the amount exceeding 2,000,000

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Deductions not Allowed [Section 21 (c)] The scope of the business expenses disallowed due to non‐deduction of taxes on them has been proposed to be expanded. Previously, some of the types of expenses were specified while it is proposed now that all types of expenses on which taxes are not withheld would be disallowed while computing taxable business income. However, the disallowance of expenses on account of purchase of goods (raw material and finished goods) under this clause has been proposed to be restricted to 20% only. Further, it has been proposed to be clarified that if later on taxes have been recovered either from the withholding agent or from the person whom the tax was not collected or deducted, then such expenditure would not be classified as on which taxes have not been deducted. Deductions not Allowed [Section 21 (o)] Expenditure incurred by pharmaceutical manufacturers in respect of sales promotion, publicity and advertisement have been proposed to be capped at 5% of turnover. Depreciation [Section 22] It is proposed to be clarified that if income of a business is exempt, it would be assumed that depreciation has been allowed during the exemption period. Accordingly, after the completion of the exemption period, the assets would have a written down value, assuming that depreciation had been allowed during the exemption period.

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Capital gains on sale of securities [Section 37A, Division VII of Part 1 of First Schedule] Capital Gains on sale of securities held for less than 12 months was made taxable through Finance Act, 2010, later in Finance Act 2015 the gains on sale of securities with holding period of up to 48 months were taxed. Now it has been proposed that capital gains on sale of securities would be taxable irrespective of the holding period. The rates of tax for filers and non‐filers have also been proposed to be separately prescribed as following for TY 2017:

Holding Period Tax Rate

Filer Non‐Filer

Less than 12 months 15% 18%

Between 12 and 24 months 12.5% 16%

More than 24 months (purchased after 1 July 2012) 7.5% 11%

Purchased before 1 July 2012 0% 0%

The above tax rates are also proposed to be applicable on capital gains on debt securities by companies, while was previously taxable at the usual corporate tax rates. It has also been proposed to be clarified that future commodity contracts entered into by the members of the Pakistan Mercantile Exchange are included in the definition of derivative products which are themselves defined as Securities. Gain on sale of such future commodity contracts is proposed to be taxed at 5% of the gain. Exemptions & Tax Concessions [Section 53] It is proposed that a general power shall be available to the Federal Government for exemption or reduction of tax to IFIs and foreign government owned financial institution operation under an agreement, MOU or any other arrangement with the Government of Pakistan.

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Group Relief [Section 59B] A subsidiary or a parent company at present is allowed to surrender its tax loss to its parent or subsidiary company entirely. It is proposed that the parent or subsidiary shall be allowed to surrender the tax loss strictly in proportion to the percentage of shares held by the holding company. Tax credit for investment in health insurance [Section 62A] It is proposed that a resident tax payer other than a company deriving income from salary or business income shall be entitled to a tax credit for health insurance premium or contribution. The tax credit is calculated at the average tax rate of the taxpayer on the lower of following:

Total insurance premium paid;

5% of persons taxable income; and

Rs. 100,000 Contribution to an Approved Pension Fund [Section 63] Tax credit was available for contribution to an approved pension funds subject to certain limits related to age of the tax payer. A proviso is proposed to be added with the effect that the additional contribution of two percent per annum for each year of age exceeding forty years shall be allowed upto 30 June 2019 subject to the further condition that the total contribution allowed shall not exceed thirty percent of total taxable income of the preceding year. Deductible allowance for profit on debt [Section 64A] Deductible allowance was allowed to an individual for the amount of any profit or share in rent paid by an individual to a schedule bank or NBFC on the loan for the construction of a new house or the acquisition of a house. One of the limit for the deductible allowance was Rs. 1 million which is proposed to be increased to Rs. 2 million per tax year.

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Deductible Allowance for Education Expenses [Section 64 AB] It is proposed that an individual parent shall be allowed a deduction for tuition fee expenses paid during a tax year if the annual taxable income of the parent is below Rs. 1,000,000. The deductible allowance shall be lesser of

5% of tuition fee paid;

25% of taxable income; and

Sixty thousand for each child

The deduction under this section shall not be adjustable from salary tax deduction. Tax Credit for Employment Generation by Manufacturers [Section 64B] The prescribed timeline for tax credit on establishment of new manufacturing unit which was from 1st July 2015 to 30th June 2018 is proposed to be extended till 30th June 2019 and the tax credit is proposed to be increased from 1% to 2% of the tax payable for every fifty employees. Tax Credit to a Person Registered under the Sales Tax Act, 1990 [Section 65A] The tax credit allowed to manufacturer for sales to registered person is proposed to be enhanced from 2.5% to 3% of tax payable. Tax Credit for Investment [Section 65B] The timeline for purchase and installation of plant and machinery by an industrial undertaking to be eligible for tax credit has been proposed to be extended from 30 June 2016 to 30 June 2019.

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Tax Credit for Enlistment [Section 65C] The tax credit on enlistment on stock exchange available in the year of enlistment has been proposed to be available for two years instead of one year. Tax Credit for Newly Established Industrial Undertaking [Section 65D] Currently a company established and operating new industrial undertaking setup between 1 July 2011 and 30 June 2016 and financed through 100% equity raised though issuance of new shares for cash consideration is entitled to tax credit equal to 100% of tax payable for a period of five years. It has been proposed that the condition of 100% equity may be reduced to 70% while the eligible period is proposed to be extended by another three years to 30 June 2019. The tax credit would also be allowed in proportion of the equity raised through issuance of shares against cash. It is also proposed that in case of discontinuation of business before five years, the tax credit so allowed shall be deemed to be wrongly allowed and tax shall be recomputed. Tax Credit for Industrial Undertaking Established before 1st July 2011 [Section 65E] Currently a company established before 1 July 2011 and purchasing and installing plant and machinery for an industrial undertaking (for either expansion or undertaking a new project) between 1 July 2011 and 30 June 2016 financed through 100% equity raised though issuance of new shares for cash consideration is entitled to tax credit equal to 100% of tax payable for a period of five years. It has been proposed that the condition of 100% equity may be reduced to 70% while the eligible period is proposed to be extended by another three years to 30 June 2019. The tax credit would also be allowed in proportion of the equity raised through issuance of shares against cash.

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It is also proposed that in case of discontinuation of business before five years, the tax credit so allowed shall be deemed to be wrongly allowed and tax shall be recomputed. Apportionment of Deductions [Section 67] Currently, expenditure is required to be apportioned between the different heads of income under different taxation regimes. It is proposed that besides expenditure, deductions and allowances should also be apportioned in the similar manner applicable for allocation of expenditure. Fair Market Value [Section 68] It is proposed that the value fixed or notified by any provincial authority for the purpose of stamp duty or for any other purpose shall also be disregarded for the purpose of determination of fair market value. Person [Section 80] A trust is included in the definition of a company as per the Income Tax Ordinance, 2001. The status of foreign trust is similar to a trust formed under the trust law applicable in Pakistan. This aspect has been proposed to be clarified by way of explanation. Agreements for Avoidance of Double Taxation & Prevention of Fiscal Evasion [Section 107 and 165B] Currently the Federal Government is empowered to enter into bilateral or multilateral agreements with governments of foreign countries for avoidance of double taxation and prevention of fiscal evasion. It is proposed that the scope of this section may be broadened to empower the Federal Government to enter into a treaty, a tax information exchange agreement, a multilateral

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convention, an inter‐governmental agreement or similar agreements for the same objective. It is also proposed that the information obtained through abovementioned agreements or treaties shall remain confidential. Previously, such information allowed to be disclosed for certain specified purposes listed in section 216(3). Similar amendment is proposed in section 165B ‐ Furnishing of information by financial institutions including banks ‐ whereby information obtained from financial institutions regarding non‐resident persons for the purpose of exchange under bilateral agreement or multilateral convention would be kept confidential and not allowed to be disclosed under section 216(3). Transaction Between Associates [Section 108] Currently, the Commissioner is empowered to distribute, apportion or allocate income, deductions or tax credits between the persons who are associates to reflect the income that the persons would have realized in an arm’s length transaction. It is proposed that every taxpayer entering into a transaction with its associates shall:

maintain a master file and local file containing documents and information as may be prescribed;

keep and maintain prescribed country‐by‐country report, where applicable;

keep and maintain any other information and document in respect of transaction with its

associate as may be prescribed; and

keep the files, documents, information and reports specified above for the period as may be prescribed.

It is also proposed that the tax payer shall produce the documents before the commissioner within 30 days or the extended time if required by the commissioner in any proceedings.

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Minimum Tax [Section 113] It is proposed that the threshold for turnover for individuals and AOPs to be reduced from Rs. 50 million to Rs. 10 million and to make it applicable from tax year 2017. It appears that minimum tax would not be applicable on individuals and AOPs for tax year 2016 inadvertently due to this proposed change. It is also proposed that minimum tax shall also be applicable to companies having gross loss which represent the excess of expenditure (other than depreciation and other inadmissible expenditure) over turnover. Further, it has been proposed to clarify that minimum tax would be applicable in addition to final taxes and super tax. Return of Income [Section 114(6)] Currently the application for revision of annual income tax return is deemed to be approved within sixty days of filing, if the commissioner has not made an order. Another proviso is proposed to be inserted whereby the approval to revise the return shall also not be required in case where the taxable income is more or taxable loss is less than the original declared version of return under section 120. Provisional Assessment [Section 122C] Currently, a provisional assessment does not becomes a final assessment if the taxpayer files income tax return and wealth statement / audited accounts within 45 days of such assessment. It is proposed that another condition be added whereby a taxpayer shall have to present accounts and other documents for Audit of its income tax affairs.

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Advance Tax paid by Taxpayer [Section 147] It is proposed that a clarification be inserted to the effect that Alternative Corporate Tax (ACT) under section 113C is to be considered for the purpose of calculation of advance tax. Payment for Foreign Produced Commercials [Section 152A] A new section is proposed to be inserted whereby foreign produced commercial for have been subjected to a withholding tax of 20% of the gross amount of payment. Such tax shall be final tax for the non‐resident person for that income. Payment for Goods and Services [Section 153] The tax deducted on advertisement services provided by print and electronic media is proposed to be made final tax. Tax Collected or Deducted as a Final Tax [Section 169] It is proposed to provide that where tax collected or deducted is a final tax and the rates of deduction or collection are separately provided for filers and non‐filers, the tax rate applicable for filers shall be final tax and the excess tax collected from a non‐filer shall be adjustable. Refunds [Section 170] The period within which refund application is to be filed is proposed to be extended from Two years to Three years.

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Cash Withdrawals from a Bank and Banking Transactions [Section 231A and 236P] It is proposed that the taxable limit of 50,000 rupees shall be considered for aggregate of all transactions in a single day from all bank accounts. Advance Tax on Private Motor Vehicles [Section 231B] It is proposed that every leasing company or scheduled bank or investment bank or a development financial institution shall collect advance tax @ 3% from non‐filer at the time of lease of motor vehicle. Advance Tax at the Time of Sale by Auction [Section 236A] It is proposed that the tax collected on lease of the right to collect tolls shall be final tax. Advance Tax on Sale or Transfer of Immovable Property [Section 236C] The immovable property sold after holding for a period of five years or more has been excluded from the applicability of this section. Earlier it was being collected on all transactions regardless of the holding period of the property. Advance Tax on Insurance Premium [Section 236U and Division XXV, Part IV, First schedule] It is proposed that adjustable advance tax on insurance premium be collected from non‐filers by insurance companies on general insurance @ 4% and on life insurance @ 1%, if the premium is more than exceeding Rs. 200,000 per annum.

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Advance Tax on Extraction of Minerals [Section 236V] It is proposed that every provincial royalty collection authority shall collect adjustable advance tax @ 5% of the value of minerals from non‐filer person extracting minerals. Advance Tax from Provincial Sales Tax Registered Person [Section 236W] It is proposed that every provincial revenue authority shall collect adjustable advance tax @ 3% of turnover declared in sales tax return from a non‐filer provincial sales tax registered person. Capital Gain on Disposal of Immovable Property [Division VIII, Part I, First Schedule] It is proposed that the gain on sale of immovable property be taxed @ 10% of the amount of gain if holding period of the property is less than five years. Earlier the gain on sale was exempt if the holding period was more than two years while for below two years holding period sliding rates of 10% and 5% were applicable. Advance Tax on Dividend [Division I, Part III, First Schedule] The rate of deduction of tax at source on dividend for non‐filer has been proposed to be increased from 17.5% to 20%. Moreover, the rate of deduction of tax at source on dividend from money market fund, income fund or REIT scheme has been increased for non‐filers from 10% to 15% in case of individuals and AOPs.

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Payment for Goods and Services [Division III, Part III, First Schedule] It is proposed that the rate of deduction of tax at source on distributors of fast moving consumer goods (FMCG) shall be reduced to 3% from 4% in case of company and to 3.5% from 4.5% in case of non‐companies. It is further proposed that the rate of deduction of tax at source on payment to electronic and print media for advertising services shall be enhanced from 1% to 1.5%. Prizes and Winnings [Division VI, Part III, First Schedule] The rate of deduction of tax at source on prizes and winnings for non‐filers is proposed to be increased from 15% to 20%. Brokerage and Commission [Division II, Part IV, First Schedule] It is proposed that the tax on commission on life insurance agents receiving annual commission of 500,000 or less shall be 8% for filer and 16% for non‐filer. Sale and Purchase of Listed Shares [Division IIA, Part IV, First Schedule] Rate of collection of tax by stock exchange on purchase and sale of shares to be increased from 0.01% to 0.02% Electricity Consumption [Division IV, Part IV, First Schedule] The Rate of collection of tax from commercial consumers of electricity with monthly bill exceeding Rs. 20,000 be increased from 10% to 12%.

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Advance Tax on Sale or Transfer of Immovable Property [Division X, Part IV, First Schedule] It is proposed that the tax rate of sale or disposal of immovable property shall be enhanced from 0.5% to 1% in case of filer and from 1% to 2% in case of non‐filer of the amount of consideration received. Advance Tax on Purchase of Immovable Property [Division XVIII, Part IV, First Schedule] It is proposed that the tax rate on purchase of immovable property shall be enhanced from 1% to 2% in case of filer and from 2% to 4% in case of non‐filer of the value of property purchased. Sports Boards and Organizations [Clause 98, Part I, Second Schedule] Exemption to sports boards has been restricted to sports boards or organizations established by Government only. Inter‐corporate dividend for Group Relief [Clause 103A, Part I, Second Schedule, Clause 11B and 11C, Part IV, Second Schedule] Exemption to inter‐corporate dividend to group companies entitled to group relief under section 59B is proposed to be withdrawn. Gawadar Port [Clause 126A, 126AB and 126AC, Part I, Second Schedule, Clause 11A and 38AA, Part IV, Second Schedule] The bill proposes various exemptions for the development of Gawadar port as following:

Income derived by China Overseas Ports Holding Company Limited, China Overseas Ports Holding Company Pakistan (Private) Limited, Gawadar International Terminal Limited, Gawadar Marine Services Limited and Gawadar Free Zone Company from Gawadar port

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operations is proposed to be exempt for a period of 23 years from 1 July 2016;

Income derived by contractors and sub‐contractors of the abovementioned companies from Gawadar Port operations is proposed to be exempt for a period of 20 years from 1 July 2016;

Income derived by the first mentioned company above being dividend received from the remaining four companies is proposed to be exempt;

Income derived by the second mentioned company above being dividend received from the remaining three companies is proposed to be exempt;

The above mentioned companies have also been proposed to be exempt from minimum tax for a period of 23 years from 1 July 2007;

Profit on Debt derived by any foreign lender or a local bank having more than 75% shareholding of the Government or State Bank of Pakistan is proposed to be exempt.

It is proposed that withholding tax on payment of dividend in respect of the abovementioned five companies shall not be made for a period of 23 years.

Export of Computer software, IT services and IT enabled services [Clause 133, Part I, Second Schedule] It is proposed that the exemption of income from export of computer software, IT Services and IT enabled services be extended from 2016 to 2019, subject to the condition that eighty percent of the export proceeds is brought into Pakistan in foreign exchange remitted from outside Pakistan through normal banking channels. Services Rendered and Construction Contracts Executed Outside Pakistan [Clause 3, Part II, Second Schedule] Currently gross receipts from services rendered and construction contracts executed outside Pakistan are taxed at the rate of 1%, provided the receipt from services and income from construction contract are brought into Pakistan through normal banking channel.

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It is proposed that the tax rate be increased and linked with 50% of the withholding rate applicable on services and contracts under section 153 of the Ordinance. Based on the existing withholding rates prescribed for section 153, the tax rate applicable on services rendered and construction contract executed outside Pakistan shall be as under:

Description Company Individuals & AOPs

Services rendered outside Pakistan 4% 5%

Construction contracts executed outside Pakistan

3.5% 3.75%

Pakistan Cricket Board [Clause 3B, Part II, Second Schedule] It is proposed that income derived by Pakistan Cricket Board from sources outside Pakistan to be taxed at 4 per cent of gross receipts. Pakistan Cricket Board may opt to pay tax at 4 per cent of gross receipts from tax year 2010 and onwards withdrawal of appeals, references and petitions, and payment of outstanding tax liabilities upto tax year 2015 by 30 June 2016. Transmission Line Project [Clause 11A, Part IV, Second Schedule] t is proposed that companies qualifying for exemption under clause (126M) of Part‐I of Second Schedule in respect of profits and gains derived from a transmission line project should also be exempt from minimum tax under section 113. Minimum Tax on Trading Houses [Clause 57, Part IV, Second Schedule] It is proposed that exemption from minimum tax under section 113 for trading houses be withdrawn. However, a reduced rate of 0.5% is proposed to be applicable upto tax year 2019.

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Withholding Tax on TFC [Clause 59(i), Part IV, Second Schedule] It is proposed that the exemption from withholding tax on profit or interest paid on Term Finance Certificate be withdrawn. Hajj Group Operators [Clause 72A, Part IV, Second Schedule] It is proposed that the exemptions and concessions available to Hajj group operators be extended for another year. Exemption Certificate on Imports [Clause 72B, Part IV, Second Schedule] It is proposed that the taxpayers who have obtained tax exemption certificate under section 148 on imports shall be treated to have been selected for audit under section 214C and according shall be subject to audit in the year in which such exemption certificate is issued. If the taxpayer fails to present accounts or documents, the certificate issued shall be cancelled and tax not collected shall be recovered. It is also proposed that the exemption on imports shall be applicable to the extent of 110 per cent of quantity of raw material imported and consumed during the previous tax year. Investments in Industrial Undertakings [Clause 86, Part IV, Second Schedule] Currently the provisions of section 111 (Unexplained income or assets) are not applicable in case investment in industrial undertakings by a company is made between on or after 1 January 2014 and commercial production commences on or before 30 June 2017. It is proposed the last date for commencement of commercial production be extended from 2017 to 2019.

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Minimum Tax on Services Provided by Companies [Clause 94, Part IV, Second Schedule] It is proposed that the benefit of reduced rate of 2% of minimum tax of the gross amount of turnover shall be extended upto 30 June 2017 for the twelve categories of service providers in the corporate sector. To avail this reduced rate, the taxpayer is required to file an irrevocable undertaking by November 2016 to present its accounts to the Commissioner. It is also proposed that “IT services and IT enabled services” as defined in clause 133 of part I to the second schedule be included as specified service sector to obtain the said benefit. Insurance Companies [Rule 6B, Fourth Schedule] Currently capital gains of insurance companies on disposal of shares of listed companies, vouchers of Pakistan Telecommunication Corporation, modaraba certificates or instruments of redeemable capital and derivative products is taxable at reduced rates. It is proposed that tax on capital gains and dividend be taxed at corporate rate of tax. Provident Fund [Rule 3, Part I, Sixth Schedule] It is proposed that the non‐taxable limit of employer annual contribution to provident fund, for the purpose of salary income, be increased from Rs. 100,000 to Rs. 150,000. Capital Gains on Listed Securities [Division VII, Part I, First Schedule and Rule 1, Eighth Schedule) Currently Capital gains on units of open ended mutual funds are subject to withholding tax which is now proposed to be omitted. It is proposed that the gains on redemption of units of open ended mutual funds shall also be subject to the mechanism as laid down in the Eighth Schedule and NCCPL would compute and collect tax on such capital gains.

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4. SALES TAX

Cottage Industry [Section 2, Clause 5AB] A manufacturer falls in the definition of “cottage industry” if annual turnover from taxable supplies made in any tax period during the last twelve months ending any tax period exceed the limit of Rs. 5 million. This limit on turnover is now proposed to be enhanced to Rs. 10 million rupees hence those having turnover in excess of Rs.10 million will be excluded from definition of “cottage factory”. Due Date [Section 2, Clause 9] Technical correction proposed to omit the expression “and 26AA” in the definition of “Due Date” in relation to furnishing of Sales Tax return. A proposal is under consideration for providing different dates for submission of different annexures of the tax return. In line with the said proposal the definition of “due date” is proposed to be amended so that due date would fall on different dates as may be specified for furnishing of different parts or annexures of the return. Input Tax [Section 2, Clause 14(d)] The proposed change seeks to omit clause (d) in the definition of “Input Tax” apparently to disallow input tax relating to provincial sales tax paid on services procured. Time and Manner of Payment [Section 6, Subsection 2] The proposed change seeks to substitute the words “at the time of filing the return in respect of that tax period under Chapter‐V”, by the words “by the date as prescribed in this respect”. Hence payment is to be made by the prescribed date which may be different from time of filing of return.

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Determination of Tax Liability [Section 7, Subsection 2 (i)] The proposed amendment seeks to add criteria for deducting input tax from output tax as in section 7, in sub‐section (2), in clause (i), for the semi‐colon at the end, a colon is proposed to be substituted and thereafter the following proviso is to be added, namely:− “Provided that from the date to be notified by the Board in this respect, in addition to above, if the supplier has not declared such supply in his return or he has not paid amount of tax due as indicated in his return;” Tax Credit not Allowed [Section 8, Subsection1, (l)] The proposed amendment will restrict a registered person entitlement to

reclaim or deduct input tax paid on such goods and services which, at the time

of filing of return by the buyer, have not been declared by the supplier in his

return or where supplier has not paid amount of tax due as indicated his

return.

Assessment of Tax & Recovery of Tax not levied or short levied or erroneously refunded [Section 11, Subsection 4A] There have been some recent decisions whereby a lacuna in sales tax law has been identified whereby no assessment provisions apply to in respect of sales tax withholding provisions. Accordingly a new subsection is proposed to be inserted in Section 11, thus giving powers to an officer of Inland Revenue to determine the amount in default after serving a show cause notice to the person who fails to withhold sales tax or withholds the same but fails to deposit the same in the prescribed manner.

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Exemption [Section 13, Subsection 2(a)] The proposed amendment seeks to enhance powers of Federal Government with respect of exemption for matters relating to international financial institutions or foreign government‐owned financial institutions. Return [Section 26, Subsection (2)] The proposed amendment has omitted subsection 2, following which, if there is a change in the rate of tax during a tax period, a separate return in respect of each portion of tax period showing the application of different rates of tax shall not be required to be furnished. Directorate General of Input Output Co‐efficient Organization [Section 30DDD] After section 30DD, the following new section is proposed to be inserted which will ascertain the constitution of IOCO. The section quotes, “The Directorate General of Input Output Coefficient Organization (IOCO)‐Inland Revenue shall consist of a Director General and as many Directors, Additional Directors, Deputy Directors, Assistant Directors and such other officers as the Board may, by notification in the official Gazette, appoint.”; Offences and Penalties [Section 33] The proposed amendment seeks to insert the words “or the rules thereunder’’ after the word “Act” against serial number 19, in the entry in column (1), in the Table given in Section 33, thus it extends the scope for penalties and includes sales tax rules for penalties to be imposed.

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Sales of Taxable Activity or Transfer of Ownership [Section 49, Subsection 2] The proposed amendment provides guide for chargeability of sales tax and payment thereto in case of sales of taxable activity or transfer of ownership (whether wholly or in part) of a taxable activity. In the case of sale or transfer of ownership of a taxable activity or part thereof to another registered person as an ongoing concern, the taxable goods or part thereof shall be transferred to the new owner through a zero‐rated invoice and the sales tax chargeable thereon shall be accounted for and paid by the registered person to whom such taxable activity or part thereof is transferred. Previously sales tax was to be accounted for and paid by the registered person to whom such sale is made or ownership is transferred. Disclosure of Information by a Public Servant [Section 56b] The proposed amendment in subsection (1) is related to confidentiality of information to be maintained by the public servant. The public servant will not be allowed to disclose any information obtained or received under any of the provisions of the Sales tax Act, 2001 except as provided under section 216 of the Income Tax Ordinance, 2001 (XLIX of 2001). Notwithstanding anything contained in sub‐section (1) and the Freedom of Information Ordinance, 2002 (XCVI of 2002), any information received or supplied by the public servant in pursuance of bilateral or multilateral agreements with government of foreign countries for exchange of information under section 56A shall be confidential. Third Schedule [Serial No. 37] The proposed amendment seeks to include mineral water/ bottled water within the purview of third schedule leading to charging of sales tax on basis of retail price rather than value of supply.

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2016‐17



Fifth Schedule [Serial No. 12] The proposed amendment seeks to exclude stationery items, milk and fat filled milk from purview of zero rating though these remain exempted under sixth schedule. Sixth Schedule [Serial No. 100A & 100B, 130 to 133] For the development of Gawadar port certain exemptions subject to conditions are proposed to be provided through insertion of Serial No. 100A and 100B to Table 1 of Sixth Schedule. Moreover Serial No. 130 to 133 has been proposed to be inserted to provide exemption to following items:

Premixes for growth stunting

Laptops

Personal computers

Pesticides Eighth Schedule [Serial No. 15, 20, 31 to 33] Following changes are proposed in Eighth Schedule:

Apart from substation of some entries relating to reduced rate on ingredients of poultry feed and cattle feed, the rate of sales tax has been enhanced from 5% to 10%.

Specified items used in production of biodiesel excluded

Pesticides excluded from reduced rate and included in sixth schedule

White crystalline sugar excluded from Federal Excise Duty and now made subject to sales tax at the same rate of 8% of value of supply

Urea is now subject to 5% sales tax

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Ninth Schedule [Serial No. 2] Rates of sales tax on medium prices and smart phones are proposed to be increased from Rs.500 and Rs.1,000 to Rs.1,000 and Rs.1,500 respectively.

(This space is intentionally left blank)

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2016‐17



5. FEDERAL EXCISE DUTY

Due Date

[Section 2 (8a) & Section 4 (2)]

A proposal is under consideration for providing different dates for submission of different annexures of the return. In line with the said proposal the definition of “due date” is proposed to be amended so that due date would fall on different dates as may be specified for furnishing of different parts or annexures of the return.

Exemptions

[Section 16 (2)]

It is proposed to insert the words “and matter relating to international

financial institutions or foreign government owned financial institutions” to

limit the wider scope of powers of Federal Government.

Offences, Penalties, Fine & allied Matters

[Section 19(13)

A new sub‐section is proposed to be inserted to cover any contravention of the

provision of FED Act for which no penalty has been specifically provided. A

penalty of Rs 5,000 or 3% of duty involved whichever is higher; is specified as

penalty for all such contraventions.

Disclosure of Information by a Public Servant

[Section 47B]

It is proposed to substitute Section 47 B to exclude disclosure of any

information received or supplied in pursuance of bilateral or multilateral

agreements with Governments of foreign countries for exchange of

information under section 47A from Freedom of Information Ordinance 2002.

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BUDGET DIGEST

2016‐17



Aerated Waters

[S. No.04, 5 & 6 Table I, First Schedule]

Description Heading Proposed Old

Rate (%)

Aerated waters 2201.1020 11.5% 10.5%

Aerated waters, containing added sugar or other

sweetening matter or flavored 2202.1010 11.5% 10.5%

Aerated waters if manufactured wholly from juices

or pulp of 1vegetables, food grains or fruits and

which do not contain any other ingredient,

indigenous or imported, other than sugar, coloring

materials, preservatives or additives in quantities

prescribed under the West Pakistan Pure Food

Rules, 1965.

Respective

headings 11.5% 10.5%

Locally Produced Cigarettes

[S. No.09 & 10, Table I, First Schedule]

It is proposed to substitute following to redefine locally produce cigarettes as

well as to increase the rate of federal excise duty.

S. No. Description of Goods New Rate Old Rate

(1) (2) (3) (4) ‐

9a

For the period from July 01, 2016 to November 30, 2016 locally produced cigarettes if their on‐pack printed retail price exceeds Rs4,000 per 1000 cigarettes

24.02 Rs. 3,436 per 1,000 cigarettes

Rs. 3,030 per 1,000 cigarettes

9b

For the period from December 01, 2016, locally produced cigarettes if their on‐pack printed retail price exceeds Rs4,400 per 1000 cigarettes

24.02 Rs.3,705 per 1,000 cigarettes

Rs.3,030 per 1,000 cigarettes

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BUDGET DIGEST

2016‐17



S.No. Description of Goods New Rate Old Rate

(1) (2) (3) (4) ‐

10a

For the period from July 01, 2016 to November 30, 2016 locally produced cigarettes if their on‐pack printed retail price does not exceeds Rs4,000 per 1000 cigarettes

24.02 Rs. 1,534 per 1,000 cigarettes

Rs. 1,320 per 1,000 cigarettes

10b

For the period from December 01, 2016, locally produced cigarettes if their on‐pack printed retail price does not exceeds Rs4,400 per 1000 cigarettes

24.02 Rs.1,649 per 1,000 cigarettes

Rs.1,320 per 1,000 cigarettes

Cement etc. (Portland cement, aluminous cement, slag cement, super sulphate cement and similar hydraulic cements, whether or not coloured or in the form of clinkers) [S. No.13, Table I, First Schedule; S.No. 18 Table I, Third Schedule]

It is proposed to charge federal excise duty at the rate of Re. 1 per Kg instead of

5% of the retail price.

White Crystalline Sugar [S. No.53, Table I, First Schedule; S.No. 3 Second Schedule]

It is proposed to withdraw federal excise duty at the rate of 8% ad val. Services Taxable by Provinces [S. No.1, 2, 2A, 5, 8, 11 & 13, Table II, First Schedule]

It is proposed to withdraw federal excise duty on following services provided in the provinces where provincial sales tax has been levied thereon.

‐ Advertisement on closed circuit TV; ‐ Advertisement on cable TV network;

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BUDGET DIGEST

2016‐17



‐ Advertisement in newspapers, & periodicals (excluding and classified advertisements) of hoarding boards, pole signs and facilities of sign boards;

‐ Shipping agents; ‐ Services provided or rendered by banking companies, cooperative

financing g societies, modarbas , musharikas, leasing companies, foreign exchange dealers, non‐banking financial institutions, Assets Management Companies and other persons dealing in any such services;

‐ Franchise services; and ‐ Services provided of rendered by stock brokers

Gawadar Port & Ancillary [S. No. 19 & 20 Table I, Third Schedule]

Exemption from Federal Excise Duty for a period of 40 years on the import and

supply of materials, equipment, ship bunker oils brought and sold to ships

calling on/visiting Gawadar Port, for the development of Gawadar Port and

Free Zone for Gawadar Port is being granted to Concession Holder of Gawadar

Port Authority and its operating companies, their contractors and

subcontractors for development of Gawadar Port and Gawadar Free Zone.

Exemption for a period of 23 years from Federal Excise Duty is being granted to

businesses to be established in Gawadar Free Zone. This exemption shall be

available to sales/supplies within the Gawadar Free Zone. However, sales/

supplies outside the free zone and into the territory of Pakistan shall be

subjected to applicable rates of sales tax and Federal Excise Duty.

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BUDGET DIGEST

2016‐17



6. CUSTOMS

It is proposed to substitute 10% and 15% slabs with 11% and 16% slabs

respectively.

Concessions, Exemptions & Enhancements in Periods & Scope

‐ It is proposed to grant concessions of Custom Duty for Dairy, Livestock &

Poultry Sectors from 5% to 2%.

‐ It is proposed to grant concessions of Custom Duty for Fish Farming, fish feed pellet (floating type) machines from 5% to 2% and in case of fish / shrimp feed 10% & 20% to 0%.

‐ It is proposed to grant exemption from Custom Duty on import of Premixes to prevent growth stunting (from 5 – 20 to 0%).

‐ It is proposed to grant exemption from Custom Duty and taxes on disposal of old & used ambulances imported by Edhi Foundation.

‐ It is proposed to exempt import of Water Quality Testing Kits from

Custom Duty chargeable at the rate of 20%.

‐ It is proposed to exempt import of Linear Akyl Benzene from Custom Duty

chargeable at the rate of 2%.

‐ It is proposed to provide custom duty relief on import of cool chain

machinery.

‐ It is proposed to increase the period of relief on import of Solar Panels till June, 2017.

‐ It is proposed to enhance in scope of exemption for charitable non‐profit making Institutions Operating Hospitals.

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2016‐17



‐ It is proposed to enhance in scope of exemption on Renewable Energy

Technologies.

Reductions in Custom Duty

‐ It is proposed to reduce custom duty on local manufacturing of LED

lights from 20% to 5%.

‐ It is proposed to reduce custom duty on Raw Materials of PVC Resin

from 5% to 3%.

‐ It is proposed to reduce custom duty on White Spirits from 10% to 3%.

‐ It is proposed to reduce custom duty on Stamping Foil from 20% to 16%.

‐ It is proposed to reduce custom duty on Fatty Alcohol Ethoxylate from

15% to 5%.

‐ It is proposed to reduce custom duty on CFC Free Gases from 15% to 11%.

‐ It is proposed to reduce custom duty on Thermostats of Deep Freezers

from 20% to 3%.

Rationalization & Increase in Custom Duty

‐ It is proposed to rationalize custom duty on Betal nuts and Betal Leaves

from 10% to 20% and Rs 300 per kg to Rs 600 per kg respectively.

‐ It is proposed to rationalize custom duty on Almonds from 10% to 20%

‐ It is proposed to rationalize custom duty on Frozen Fish from 10% to 20%

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2016‐17



‐ It is proposed to increase custom duty on Medium Density Fiber Board

from 15% to 20%.

‐ It is proposed to increase custom duty on Cement Clinker from 2% to

11%.

‐ It is proposed to increase custom duty on Semi Printed/Printed Security

Paper from 5% to 16%.

‐ It is proposed to increase custom duty on Live Chicken stock and Eggs

of Chicken from 5% to 11%.

‐ It is proposed to increase custom duty on Birds eggs (not in shell) from

5% to 16%.

Regulatory Duty (Removal & Levy)

‐ It is proposed to remove regulatory duty from Bead Wire for tyres

manufacturers from 10% to 0%.

‐ It is proposed to remove regulatory duty from Carbon Steel Strips used

by Razor blade manufacturers from 17.5% to 0%.

‐ It is proposed to levy regulatory duty on Powdered Milk and Whey

Powder at the rate of 25%.

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BUDGET DIGEST

2016‐17



Fifth Schedule

Description PCT Code New Old

Rate (%)

Tillage and seed bed preparation equipment. 2 2

Seeding or Planting Equipment. 2 2

Irrigation, Drainage and Agro‐Chemical Application Equipment 0‐2 0‐2

Harvesting, Threshing and Storage Equipment. 2‐5 2‐5

Fertilizer and Plant Protection Equipment. 5 5

Dairy, Livestock and poultry, machinery 2 5

Post‐harvest Handling and Processing and Miscellaneous Machinery.

2 2

Green House Farming and Other Green House Equipment. 0‐5 0‐5

Machinery, Equipment and Other Capital Goods for Miscellaneous Agro‐Based Industries like Milk Processing, Fruit, Vegetable or Flowers Grading, Picking or Processing etc.

8419.8990;8419.3100;8418.6990; 8419.5000;8421.2200;8419.8990

3‐5 5

Horticulture and Floriculture

8441.3000;8502.1120;8502.1130 8418.6920;8418.5000;7304.3100; 7304.3900

3‐5 5

Fish or shrimp farming and seafood processing machinery and equipment.

8414.8090;8502.1130 8502.1190;8502.1200 8418.9990;8418.3000 8418.4000;7019.9090

2‐5 5

Machinery and equipment for development of grain handling and storage facilities including silos.

Respective Headings 3‐5 5

Machinery and equipment for initial installation, balancing, modernization, replacement or expansion of desalination plants, coal firing system, gas processing plants and oil and gas field prospecting.


Machinery, equipment, apparatus, and medical, surgical, dental and veterinary furniture, materials, fixtures and fittings imported by hospitals and medical or diagnostic institutes:‐

3‐5 5

1. Machinery, equipment, materials, capital goods, specialized vehicles (4x4 non luxury) i.e. single or double cabin pickups, accessories, spares, chemicals and consumables meant for mineral exploration phase. 2. Construction machinery, equipment and specialized vehicles, excluding passenger vehicles, imported on temporary basis as required for the exploration phase.

Respective Headings 0% 0

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BUDGET DIGEST

2016‐17




Rate (%)

1. Machinery, equipment, materials, capital goods, specialized vehicles (4x4 non luxury) i.e. single or double cabin pickups, accessories, spares, chemicals and consumables meant for mine construction phase or extraction phase. Imports made for mine construction phase shall also be entitled to deferred payment of duty for a period of five years. However a surcharge @ 6% per annum shall be charged on the deferred amount. 2. Construction machinery, equipment and specialized vehicles, excluding passenger vehicles, imported on temporary basis as required for mine construction or extraction phase.


Coal mining machinery, equipment, spares, including vehicles for site use i.e. single or double cabin pickups imported for Thar Coal Field.


1. Machinery, equipment and spares meant for initial installation, balancing, modernization, replacement or expansion of projects for power generation through oil, gas, coal, wind and wave energy including under construction projects, which entered into an implementation agreement with the Government of Pakistan. 2. Construction machinery, equipment and specialized vehicles, excluding passenger vehicles, imported on temporary basis as required for the construction of project.


1. Machinery, equipment and spares meant for initial installation, balancing, modernization, replacement or expansion of projects for power generation through gas, coal, hydel and oil including under construction projects. 2. Construction machinery, equipment and specialized vehicles, excluding passenger vehicles, imported on temporary basis as required for the construction of project.


1. Machinery, equipment and spares meant for initial installation, balancing, modernization, replacement or expansion of projects for power generation through nuclear and renewable energy sources like solar, wind, micro‐hydel bio‐ energy, ocean, waste‐to‐ energy and hydrogen cell etc. 2. Construction machinery, equipment and specialized vehicles, excluding passenger vehicles, imported on temporary basis as required for the construction of project.


1. Machinery and equipment meant for power transmission and grid stations including under construction projects. Explanation.‐ For the purpose of this concession “machinery and equipment” shall mean:‐ (a) machinery and equipment operated by power of any description, such as used in the generation of power; (b) apparatus, appliances, metering and testing apparatus, mechanical and electrical control, transmission gear and transmission tower, power transmission and distribution cables and conductors, insulators, damper spacer and hardware and parts thereof adapted to be used in conjunction with the machinery and equipment as specified in clause (a) above; and


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BUDGET DIGEST

2016‐17




Rate (%)

Machinery, equipment and other education and research related items imported by technical institutes, training institutes, research institutes, schools, colleges and universities:‐

0 0

Machinery, equipment, raw materials, components and other capital goods for use in buildings, fittings, repairing or refitting of ships, boats or floating structures imported by Karachi Shipyard and Engineering Works Limited.


Machinery, equipment and other capital goods meant for initial installation, balancing, modernization, replacement or expansion of oil refining (mineral oil, hydro‐cracking and other value added petroleum products), petrochemical and petrochemical downstream products including fibers and heavy chemical industry, cryogenic facility for ethylene storage and handling.


Machinery and equipment imported by an industrial concern. Respective Headings 15% 15

Following machinery and equipment for marble, granite and gem stone extraction and processing industries.

3‐5 5

1. Machinery, equipment and other project related items including capital goods, for setting up of power generation plants, water treatment plants and other infrastructure related projects located in an area of 30 km around the zero point in Gawadar. 2. Machinery, equipment and other project related items for setting up of hotels located in an area of 30 km around the zero point in Gawadar.

Respective Headings Respective Headings

0‐5 0‐5

Effluent treatment plants. Respective headings 3‐5 5

Following items for use with solar energy:‐ Solar Power Home Systems. 1) Off–grid portable solar home system (with or without provision for USB/charging port) comprising of : (i). Photovoltaic generators consisting of panels of photocells (PV module), charge controller with integrated battery (not exceeding 50Ah), essential connecting wires (with or without switches). (ii).Bulb holder.

8501.3110 8536.6100

0 0

2).Water purification plants operating on solar energy. 8421.2100

Following systems and items for dedicated use with renewable source of energy like solar, wind, geothermal etc. 1. (a) Solar Parabolic Trough Power Plants. (b) Parts for Solar Parabolic Power Plants. 2. (a) Solar Dish Stirling Engine. (b) Parts for Solar Dish Stirling Engine.3. 3.(a) Solar Air Conditioning Plant (b) Parts for Solar Air Conditioning Plant 4. (a) Solar Desalination System (b) Parts for Solar Desalination System 5. Solar Thermal Power Plants with accessories. 6. (a) Solar Water Heaters with accessories. (b) Parts for Solar Water Heaters 7. (a) PV Modules. (b) Parts for PV Modules 8. Solar Cell Manufacturing Equipment.

0 0

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BUDGET DIGEST

2016‐17




Rate (%)

Items for promotion of renewable energy technologies or for conservation of energy:‐

0 0

Parts and Components for manufacturing LED lights 5 0

Plant, machinery and equipment used in production of bio‐diesel. Respective headings 0 0

Plant, machinery and equipment imported for setting up fruit processing and preservation units in Gilgit‐Baltistan, Balochistan and Malakand Division.

Respective headings 0 0

Plant, machinery and equipment imported during the period commencing on the 1st July, 2014 and ending on the 30th June, 2019 for setting up Industries in FATA.


Specialized vehicles imported by the Construction Companies 20 20

Plant, machinery and production line equipment used for the manufacturing of mobile phones.


Active Pharmaceutical Ingredients Respective Headings 3‐5 5

(Excipients/Chemicals) Respective Headings 5 5

(Drugs) Respective Headings 0‐10 0‐10

(Packing Materials/Raw Materials for Packing/Bandages) Respective Headings 0‐10 0‐10

(Diagnostic Kits/Equipment’s) Respective Headings 0‐5 0‐5

Raw Materials/Inputs for Poultry and Textile Sector; Other Goods 0‐15 0‐15

Imports of Machinery and Equipment for Textile Sector 0

Import of Automotive Vehicles (CBUs)‐Under Automotive Development Policy (ADP) 2016‐21

1‐15

Imports of Aviation Related Goods‐i.e. Aircrafts and Parts etc. by Airline Companies / Industry under National Aviation Policy 2015

0 0

Miscellaneous 0 0

Miscellaneous 5

KARACHI OFFICE

1104, Uni Tower,

I.I. Chundrigar Road

Karachi.Phone :+92(21)32468154-5

+92(21)32468158

Fax : +92(21)32468157

ISLAMABAD OFFICE

Mezzanine Floor,

Khumrial Plaza,

I&T Center, G-8/4,

Islamabad.

Phone : +92-51-2253303-6

Fax : +92-51-2253307

[email protected]

BUDGET DIGEST

2016-17

J.A.S.B. & Associates Chartered Accountants Member of Morison KS International

Documents

[email protected] BUDGET DIGEST 2016-17€¦ · BUDGET DIGEST 2016‐17 J.A.S.B. & Associates, Chartered Accountants Member of Morison KS International Provincial Sales