ISLAMABAD: The Federal Board of Revenue (FBR) has proposed automated procedures for facilitation of import of raw materials and intermediaries for industries.
The proposed procedures are aimed at improving the system of issuance of exemption certificates under Section 148 of the Income Tax Ordinance, 2001. However, it will only be finalised after getting feedback from all stakeholders.
The new system is based on automated risk-based mechanism to reduce processing time and remove unnecessary delays in the issuance of exemptions certificates. Under the procedures, public/private limited companies will provide checklist 17 information online for processing through the system.
The income tax commissioner will issue exemption certificate within seven days for a public limited company and 10 days for private. Other than these, exemptions will be issued to all other persons within 15 days of filing of application through the automated system.
In case the commissioner fails to take action on the application within the scheduled time, the system will issue certificate to the taxpayer. However, such exemption certificate issued to all persons, except public and private limited, will be provisional.
The system will not issued automatic certificate in case an assignment has been issued by the commissioner within seven days of filing of the application, CPR of discharge of tax liability is not available in the system, annexure to SRO717 of 2014 has not been filled in the system and the taxpayer has applied for substitution of raw material to be imported.
The exemption certificate automatically issued can be revoked by the commissioner any time if it comes to the knowledge that any of the prescribed conditions have not been fulfilled after giving an opportunity of being heard.
Plant, machinery retention period reduced
Through a separate notice on Wednesday, the FBR reduced the retention period of plant, machinery and equipment brought under export facilitation schemes from 10 to five years.
The export-oriented units (EOU) are also allowed to dispose off their machinery prior to five years after payment of duty and taxes against the different depreciated rates after three years.
A notification SRO747 of 2019 was issued here by amending the Export-Oriented Units and Small and Medium Enterprises Rules, 2008. However, these amendments will be finalised after getting input from all stakeholders within 15 days.
As per amendments, the export-oriented units will pay full duty and taxes if intend to sell or otherwise dispose off their machinery before the expiration of three years from the date of importation. The units will have to pay 75 per cent of duty and taxes in case of selling or disposing of machinery after three years and before four, from the date of importation.
The units will pay 50pc of the duty and taxes in case the units intend to sell or dispose of machinery after four years and before five from the date of importation. No duty will be charged on units which either sell or dispose of machinery after five years from the date of importation.
Moreover, the replacement parts of machinery and spares are also allowed removal after three years from the date of import from EOU subject to mutilation or scrapping under the supervision of an officer not below the rank of an assistant collector.
Published in Dawn, July 11th, 2019