June 8, 2005

Wednesday

Rabi-us-Sani 30, 1426

          

            

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LEVY, COLLECTION AND PAYMENT OF DUTY

 3. Duties specified in the First Schedule to be levied.–

          (1) Subject to the provisions of this Act and rules made thereunder, there shall be levied and collected in such manner as may be prescribed duties of excise on,—

 (a)  goods produced or manufactured in Pakistan;

(b)  goods imported into Pakistan;

(c)  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;  and

(d)  services, provided or rendered in Pakistan;

at the rate of fifty per cent ad valorem except 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.

            (2)        Duty in respect of goods imported into Pakistan shall be levied and collected in the same manner and at the same time as if it were a duty of customs payable under the Customs Act, 1969 (IV of 1969), and the provisions of the said Act including section 31A thereof shall apply.

(3)    The Board may, by notification in the official Gazette, in lieu of levying and collecting under sub‑section (1) duties of excise on goods and services, as the case may be, levy and collect duties,—

(a)   on the production capacity of plants, machinery, undertakings, establishments or installations producing or manufacturing such goods; and

(b)  on fixed basis, as it may deem fit, on any goods or class of goods or on any services or class of services, payable by any establishment or undertaking producing or manufacturing such goods or providing or rendering such services.

(4)   Without prejudice to other provisions of this Act, the Federal Government may levy and collect duty on any class or classes of goods or services by notification in the official Gazette at such higher or lower rate or rates as may be specified in such notification.

  Explanation.–

Subject to sub-section (1), for the purpose of this section, “goods” means the goods specified in CHAPTERS 1 TO 97 and “services” means the services specified in CHAPTER 98 of the First Schedule to the Customs Act, 1969 (IV of 1969).

4. Filing of return and payment of duty etc.—

           (1)            At the close of the month each registered person shall prepare a return in such form as may be specified by the Board and furnish the same to the Collector within three days after payment of the amount of duty due from him for a month.

            (2)        Duty shall be deposited in the designated branch of the bank on the prescribed challan after properly filling up all columns of the challan mentioning registration number on its right top by seventh day of the succeeding or by such date as may be specified by the Board provided that any shortfall in the days of the month during which duty has been collected shall be forgone.

            (3)        If during any month, there is a change in the rate of duty, a separate return showing the application of different rates of duty shall be used in respect of each portion of such month.

            (4)        A person may file a revised return for the correction of any bonafide error or mistake in the entries or declaration of the original return.

            (5)        The Board may, by notification in the official Gazette, require any person or class of persons for any goods or class of goods to furnish such summary or details of particulars pertaining to imports, purchases, utilization, consumption, production, sales or disposal of such goods during any month or months in such format and manner as may be specified and provisions of this sub-section may be invoked mutatis mutandis in respect of services.

            (6)        The Board may by an order, specify the manner and procedure for filing of return for the purpose of this Act or rules made thereunder and for payment of duty by electronic means. The Board may specify the manner and procedure for the submission, receipt and transmission of any information for the purpose of this Act or rules made thereunder by electronic means.

            (7)        Every amount of duty due from any person on any other account shall also be deposited on the prescribed challan in the bank branch designated and in the same manner as aforesaid.

5. Zero rate of duty and drawback of duty etc.—
           

            (1)       Notwithstanding the provisions of section 3, the goods exported out of Pakistan or such goods as may be, by a notification in the official Gazette, specified by the Federal Government shall be charged to duty at the rate of zero per cent and adjustment of duty in terms of section 6 shall be admissible on such goods.

            (2)        The Board may, by notification in the official Gazette, grant drawback of duty paid on any goods used in the manufacture of any goods manufactured in and exported out of Pakistan, or shipped as provisions or stores for consumption on board a ship or aircraft proceeding to a destination outside Pakistan, at such rate or rates and subject to such conditions and limitations as may be specified in the notification.

 6. Adjustment of duties of excise.—  

           (1)      For the purpose of determining net liability of duty in respect of any goods, the duty already paid on goods specified in the First Schedule and used directly as input goods for the manufacture or production of such goods shall be deducted from the amount of duty calculated on such goods.

            (2)        Adjustment of duty of excise under sub-section (1) shall be admissible only if a person registered under this Act holds a valid proof to the effect that he has paid the price of goods purchased by him including the amount of duty and received the price of goods sold by him including the amount of duty through banking channels including online payment whether through credit card or otherwise.

            (3)        Notwithstanding the provisions of sub-section (1), the Board may, by a notification in the official Gazette, disallow or restrict whole or part of the amount of or otherwise regulate the adjustment of duty in respect of any goods or class of goods.

 7 Application of the provisions of the Sales Tax Act, 1990.—

In case of goods specified in the Second Schedule or such services as may be specified by the Board through a notification in the official Gazette,—

(a)                 a registered person manufacturing or producing such goods or providing or rendering such services shall be entitled to deduct input tax paid during the tax period from the amount of duty of excise due from him on such goods or services in respect of that tax period;

(b)                 a registered person shall be entitled to deduct the amount of duty of excise paid or payable by him on such goods or services as are acquired by him during a tax period from the output tax due from him in respect of that tax period;

(c)                 a registered person supplying such goods or providing or rendering such services shall be entitled to deduct duty of excise paid or payable on such goods or services as are acquired by him during the tax period from the amount of duty of excise due from him on such goods manufactured or produced or services as are provided or rendered by him during that period; and

(d)                 a person shall be entitled to deduct duty of excise paid or payable, on such goods or services as are acquired by him during a month, from the amount of duty of excise due from him on such goods manufactured or produced or such services as are provided or rendered by him, during that month.

                        Explanation.— For the purposes of this section, the expressions  “input tax”, “output tax” and “tax period” shall have the same meanings as are assigned to them in the Sales Tax Act, 1990, provided that the date for payment of duty under this Act shall be the date specified under sub-section (1) of section 4.

 8. Default surcharge.–

 If a person fails to pay the duty within the prescribed time, he shall, in addition to the duty payable under section 3, be liable to pay default surcharge at the rate of one per cent per month for the first six months and at the rate of one and half per cent per month thereafter.

                                    Explanation.– For the purpose of this section, the period of default shall be reckoned from the day following the due date on which the duty was payable to the preceding day on which the duty is actually paid.

 9. Liability for payment of duty in the case of private companies or business enterprises or in case of sale of business ownership.–

(1) Notwithstanding anything contained in any other law for the time being in force, where any private company or business enterprise is closed or discontinued or otherwise ceases to exist and any amount of duty chargeable on the company or business enterprise, whether before, or in the course of, or after its liquidation cannot be recovered from the company or business enterprise, every person who was a owner of, or partner in, or director of, the company or business enterprise shall, jointly and severally with such persons, be liable for the payment of such duty.

            (2)        In the case of sale or transfer of ownership of a business or part thereof involving any charge of duty to another person as an ongoing concern, the chargeable duty shall be paid by the person to whom such sale is made or ownership is transferred provided that if any amount of duty payable by such person remains unpaid, such unpaid amount of duty shall be the first charge on the assets of the business and shall be payable by the transferee of business.

            (3)        In case of termination of a business or part thereof involving  any outstanding charge of duty, a person terminating such business or part thereof shall be required to account for and pay the outstanding charge of duty as if no such termination has taken place.

10. Applicable value and rate of duty.—  

The value and the rate of duty applicable to any goods or services shall be the value, retail price, tariff value and the rate of duty in force,–

(a)  in the case of goods, on the date on which the goods are cleared for export or for home consumption;

(b)  in the case of services, on the date on which the services are provided or rendered; and

(c)  in the case of goods produced or manufactured outside the areas to which this Act has been applied and brought to such areas for sale or consumption therein, the date on which the goods are brought to those areas.

11. Collection of excess duty etc.–           

 Every person who for any reason whatever has collected or collects any duty, which is not payable as duty or which is in excess of the duty actually payable and the incidence of which has been passed on to the consumer, shall pay the amount so collected to the Federal Government and all the provisions of this Act or rules made thereunder shall apply for the recovery of such amount and claim for refund of any such amount paid or recovered shall not be admissible on any ground whatever.

Determination of value for the purposes of duty.–

(1)  Where any good is liable to duty under this Act at a rate dependent on its value, duty shall be assessed and paid on the basis of wholesale cash price of that goods and where such price is not available, of identical or similar goods, on which the goods are capable of being sold to a general body of retail traders and if there is no such body, to the general body of consumers on the day of its sale, without any deduction whatever except the amounts of duty and sales then payable.

            (2)        Where any services are liable to duty under this Act at a rate dependent on the charges therefor, the duty shall be paid on total amount of charges for the services including the ancillary facilities or utilities, if any, irrespective whether such services have been rendered or provided on payment of charge or free of charge or on any concessional basis. 

            (3)        Where any goods are chargeable to duty at the import stage, duty will be assessed and paid on the value determined in accordance with section 25 of the Customs Act, 1969 (IV of 1969), including customs duties payable thereon.

            (4)        Where any good is chargeable to a duty on the basis of retail price, duty thereon shall be paid on the retail price fixed by the manufacturer, inclusive of all charges and taxes, other than sales tax levied and collected under section 3 of the Sales Tax Act, 1990, at which any particular brand or variety of such goods should be sold to the general body of consumers or, if more than one such price is so fixed for the same brand or variety, the highest of such price and such retail price shall, unless otherwise directed by the Board, be legibly, prominently and indelibly indicated on each good, packet, container, package, cover or label of such goods:

            Provided that where so and as specified by the Board, any goods or class of goods liable to duty on local production as percentage of retail price, the provisions of this sub-section shall mutatis mutandis apply in case such goods are imported from abroad.

            (5)        The Board may fix the minimum price of any goods or class of goods, for the purpose of levying and collecting of duty and duty on such goods shall be paid accordingly.

Registration.—             (1)        Any person engaged in the production or manufacture of goods or providing or rendering services liable to duty of excise under this Act shall, unless otherwise specified, be required to obtain registration in the prescribed manner regardless of his annual turnover or volume of sales of such goods or services.

(2)                 Where a person who is already registered under the Sales Tax Act, 1990, shall not be required to take separate registration for excise purpose and his sales tax registration shall be deemed to be a registration for the purpose of this Act:

            Provided that provisions of the Sales Tax Act, 1990, including those relating to exemption threshold shall not apply where a person obtains or is liable to obtain registration for the purposes of this Act but does not have or is not liable to registration under the Sales Tax Act, 1990.

Recovery of unpaid duty or of erroneously refunded duty or arrears of duty, etc.—

(1)            Where any person has not levied or paid any duty or has short levied or short paid such duty or where any amount of duty has been refunded erroneously, such person shall be serviced with notice requiring him to show cause for payment of such duty provided that such notice shall be issued within three years from the relevant date.

(2)                 The Federal Excise Officer, empowered in this behalf, shall after considering the objections of the person served with a notice to show cause under sub-section (1), determine the amount of duty payable by him and such person shall pay the amount so determined along with default surcharge and penalty as specified by such officer under the provisions of this Act.

(3)                 Where any amount of duty levied and penalty imposed or any other amount payable under this Act is due from any person, such amount or sum shall be recovered in such manner as is prescribed under this Act or rules made thereunder.

(4)        Notwithstanding anything contained under any other law for the time being in force, where any business or activity involving liability to charge, levy and pay duty under this Act is sold, discontinued or liquidated, the amount of unpaid or recoverable duty shall be the first charge on the assets of the business.

Explanation.—

For the purpose of this section, the expression “relevant date” means the date on which the payment of duty was due under sub-section (3) and in case where any amount of duty has been erroneously refunded, the date of its refund.

Application of the Customs Act, 1969 (IV of 1969) to Federal excise duties.– The Federal Government may, by notification in the official Gazette, declare that any or all of the provisions of the Customs Act, 1969 (IV of 1969), shall, with such modifications and alterations it may specify, consider necessary or desirable to adapt them to the circumstances, be applicable in regard to like matters in respect of the duties levied by sections 3 and 8.

Exemptions.–

(1) All goods imported, produced or manufactured in Pakistan and services provided or rendered except such goods and services as are specified in the First Schedule shall be exempt from whole of excise duties:

            Provided that goods and services specified in the 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.

            (2)        The Federal Government may by notification in the official Gazette, exempt subject to such conditions as may be specified therein, any goods or class of goods or any services or class of services from the whole or any part of the duty leviable under this Act.

            (3)        The Board may, by special order, exempt from the payment of the whole or any part of the duty leviable under this Act, under circumstances of exceptional nature, any goods or services on which such duty is leviable.

            (4)        Notwithstanding the provisions of sub-sections (2) and (3), the Federal Government or the Board may, by a notification in the official Gazette, for reasons to be recorded, exempt any person or class of persons from payment of the whole or part of the default surcharge imposed under section 8 subject to the such conditions or limitations as may be specified in such notification.

Records.—

(1)   Every person registered for the purposes of this Act shall maintain and keep for a period of three years at his business premises or registered office in English or Urdu language the following records of goods purchased, manufactured and cleared (including those cleared without payment of excise duty) by him or by his agent acting on his behalf in such form and manner as would permit ready ascertainment of his liability of duty, namely:—

(a)                 records of clearances and sales made indicating the description, quantity and value of goods, name and address of the person to whom sales were made and the amount of the duty charged;

(b) records of goods purchased showing the description, quantity and value of goods, name, address and registration number of the supplier and the amount of the duty, if any, on purchases;

(c) records of goods cleared and sold without payment of duty;

(d)  records of invoices, bills, accounts, agreements, contracts, orders and other allied business matters;

(e) records of production, stocks and inventory;

(f) records of imports and exports; and

(g) such other records as may be specified by the Board.

For any person or class of persons registered under this Act, or for any goods or class of goods the Board may specify or prescribe,—

(a) to keep any other records for the purposes of this Act;

(b)  to use such electronic fiscal cash registers as may be approved by the Board; and

(c) the procedure or software for electronic maintenance of records and filing of statements, documents or information by any person or class of persons.

(3) Provisions of sub-sections (1) and (2) shall apply mutatis mutandis on services provided or rendered by a person registered under this Act.

Invoices.—

(1)   A person registered under this Act shall issue for each transaction a serially numbered invoice at the time of clearance or sale of goods, including goods chargeable to duty at the rate of zero per cent, or providing or rendering services containing the following particulars, namely:–

(a)  name, address and registration number of the seller;

(b)  name, address and registration number of the buyer;

(c) date of issue of the invoice;

(d) description and quantity of goods or as the case may be, description of services;

(e)  value exclusive of excise duty;

(f) amount of excise duty; and

(g)  value inclusive of excise duty.

            (2)        Notwithstanding sub-section (1), where a registered person is also engaged in making supplies taxable under the Sales Tax Act, 1990, such person shall not be required to issue a separate invoice for excise purposes and the amount of excise duty and other related information may in such cases be mentioned on the invoice issued for sales tax purposes.

            (3)        The Board may, by notification in the official Gazette, specify such modified invoices for different persons or classes of persons as it may deem necessary.

            (4)        The Board may, by notification in the official Gazette, specify goods in respect of which a copy of the invoice shall be carried or accompanied with the conveyance during their transportation or movement in such manner and subject to such conditions as may be specified in this behalf either in such notification or otherwise.