Finance Act, 2013.

Download FeedBack
Department: Finance Department
Main Category: Acts
Specific Category Name: Finance
Year 2013
Promulgation Date: 01-07-2013
Details:

THE KHYBER PAKHTUNKHWA FINANCE ACT, 2013.

 

(KHYBER PAKHTUNKHWA ACT NO. XXI OF 2013)

 

CONTENTS

 

PREAMBLE

 

SECTIONS

 

PART I

PRELIMINARY

 

1.         Short title, extent and commencement.

2.         Definitions.

PART II

CHAPTER I

KHYBER PAKHTUNKHWA REVENUE AUTHORITY

 

3.         Establishment of Khyber Pakhtunkhwa Revenue Authority.

4.         Directorates.

5.         Powers and functions of the Authority.

6.         Authority may impose any fee, cess or charges.

7.         Meetings.

8.         Validity of proceedings.

9.         Properties and assets to vest in the Authority.

10.       Data bank.

CHAPTER II

POLICY MAKING COUNCIL

 

11.       Policy Making Council.

CHAPTER III

BUDGET AND ACCOUNT

 

12.       Fund.

13.       Budget and accounts.

14.       Audit.

CHAPTER IV

EMPLOYMENT IN AUTHORITY

 

15.       Human resource management.

16.       Staff.

17.       Public servants.

18.       Indemnity.

PART III

Chapter I

Sales Tax on Services

 

19.       Taxable Service.

20.       Application of principles of origin and reverse charge in certain situations.

21.       Amendment in Second Schedule.

22.       Economic activity.

23.       Value of a Taxable Service.

24.       Open market price.

25.       Provision of service over a period of time.

CHAPTER II

SCOPE OF TAX

 

26.       Scope of tax and allied matters.

27.       Person liable to pay tax.

28.       Exemptions.

29.       Effect of change in the rate of tax.

30.       Special procedure and tax withholding provisions.

31.       Delegation of power to collect, administer and enforce sales tax on certain services.

32.       Adjustments.

 

 

 

CHAPTER III

PAYMENT AND COLLECTION OF TAX ON TAXABLE SERVICES

 

33.       Collection of excess tax.

34.       Time, manner and mode of payment.

35.       Joint and several liability of registered persons where tax unpaid.

36.       Sales of taxable activity or transfer of ownership.

37.       Estate of deceased person.

38.       Estate in bankruptcy.

39.       Liability for payment of tax in case of private companies or business enterprises.

40.       Assessment of tax.

CHAPTER IV

REGISTRATION

 

41.       Registration.

42.       Voluntary registration.

43.       Compulsory registration.

44.       Application for registration.

45.       Suspension of registration.

46.       De-registration.

CHAPTER V

BOOK KEEPING AND AUDIT PROCEEDINGS

 

47.       Issuance of tax invoices.

48.       Records.

49.       Retention and production of records and documents.

50.       Audit proceedings.

51.       Special audit by chartered accountants or cost accountants.

CHAPTER VI

RETURNS

 

52.       Return.

53.       Special returns.

54.       Final return.

55.       Return deemed to have been made.

CHAPTER VII

APPOINTMENT OF OFFICERS AND THEIR POWERS

 

56.       Appointment of officers.

57.       Special Judges.

58.       Cognizance of offence.

59.       Application of the Code of Criminal Procedure, 1898.

60.       Exclusive jurisdiction of Special Judge.

61.       Place of sitting.

62.       Persons who may conduct prosecution.

63.       Appeal to the High Court.

CHAPTER VIII

OFFENCES AND PENALTIES

 

64.       Offences and penalties.

65.       Default surcharge.

66.       Exemption from penalty and default surcharge.

67.       Compounding of offences.

68.       Recovery of tax not levied or short-levied.

69.       Power to summon persons to give evidence and produce documents.

70.       Power to arrest and prosecute.

71.       Procedure to be followed on arrest of a person.

72.       Authorized officers to have access to premises, stocks, accounts and records.

73.       Obligation to produce documents and provide information.

74.       Searches under warrants.

75.       Posting of an officer to business premises.

76.       Powers of adjudication.

77.       Revision by the Collector.

78.       Revision by the Authority.

CHAPTER IX

APPEALS

 

79.       Appeals.

80.       Procedure in appeal.

81.       Decision in appeal.

CHAPTER X

APPELLATE TRIBUNAL

 

82.       Appellate Tribunal.

83.       Conduct of business by Appellate Tribunal.

84.       Appeal to the Appellate Tribunal.

85.       Disposal of appeals by the Appellate Tribunal.

86.       Reference to the High Court.

CHAPTER XI

RECOVER OF ARREARS

 

87.       Recovery of arrears of tax.

88.       Deposit of the tax demand while appeal is pending.

89.       Alternative dispute resolution.

 

AGENTS, REPRESENTATIVES AND E-INTERMEDIARIES

 

90.       Agents.

91.       Liability and obligations of agents.

92.       Appearance by authorized representatives.

93.       E-intermediaries to be appointed.

 

 

 

 

 

PART IV

Infrastructure Development Cess

 

94.       Levy of cess for special maintenance and development of infrastructure.

PART V

Chapter-I

GENERAL ADMINISTRATION

 

95.       Computerized system.

96.       Service of orders and decisions.

97.       Issuance of duplicate of the tax documents.

98.       Computation of limitation period.

99.       Condonation of time-limit.

100.     Corection of clerical errors.

101.     Deposit of Taxes collected.

102.     Research and Development.

103.     Annual report.

104.     Officers of the Authority to follow orders.

105.     Representation.

CHAPTER II

MISCELLANEOUS

 

106.     Direction from the Government.

107.     Delegation by the Government.

108.     Delegation by the Authority.

109.     Power to issue orders, instructions and directions.

110.     Assistance to the Authority.

111.     Bar of suits, prosecution and other legal proceedings.

112.     Act to override other laws.

113.     Power to make rules.

114.     Power to make Regulations.

115.     Removal of difficulties.

116.     Continuance in Force.

117.     Repeal and savings.

PART-VI

Amendment of West Pakistan Urban Immovable

Property Tax Act, 1958.

 

118.     Amendment of W.P. Act No. V of 1958.

 

FIRST SCHEDULE

 

 

SCHEDULE II

 

 

 

  

 

 

 

 

 


 

THE KHYBER PAKHTUNKHWA FINANCE ACT, 2013.

 

(KHYBER PAKHTUNKHWA ACT NO. XXI OF 2013)

 

(First published after having received the assent of the Governor of

 the Khyber Pakhtunkhwa in the Gazette of Khyber Pakhtunkhwa

(Extraordinary),dated the 01/07/2013).

 

AN

ACT

to levy, continue and exempt certain taxes, cess and fees and

 to amend and  consolidate the law relating for the

imposition, levy, collection and administration of a tax

on services provided, supplied, rendered, initiated, originated, executed, received, delivered or consumed in the Province of the Khyber Pakhtunkhwa and to establish the Khyber Pakhtunkhwa Revenue Authority.

 

WHEREAS it is expedient to levy, continue and exempt certain taxes, cess and fees and to amend and  consolidate the law relating for the imposition, levy, collection and administration of a tax on services provided, supplied, rendered, initiated, originated, executed, received, delivered or consumed in the Province of the Khyber Pakhtunkhwa and to establish the Khyber Pakhtunkhwa Revenue Authority;

 

It is hereby enacted as follows:

 

PART I

PRELIMINARY

 

1.         Short title, extent and commencement.---(1) This Act may be called the Khyber Pakhtunkhwa Finance Act, 2013.

 

(2)        It shall extend to the whole of the Province of the Khyber Pakhtunkhwa.

 

(3)        It shall come into force on the 1st day of July, 2013:

 

Provided that the Government in respect of the services listed in the Schedules appended to this Act, may by notification in the official Gazette, specify different dates for different services on which taxes shall be levied.

 

2.         Definitions.---In this Act, unless there is anything repugnant to the subject or context,-

 

(1)        “Appellate Tribunal” means the Appellate Tribunal established under this Act;

 

(2)        “arrears”, in relation to a person, shall mean, on any day, the tax due and payable by the person under this Act before that day but which has not yet been paid;

 

(3)        “Assistant Collector” means a person appointed as an Assistant Collector under this Act;

 

(4)        “associates” or “associated persons” includes-

 

(a)        two persons, where the relationship between them is such that one may reasonably be expected to act in accordance with the intention of the other, or both persons may reasonably be expected to act in accordance with the intention of a third person but two persons shall not be associate solely by reason of the fact that one person is an employee of the other or both persons are employees of a third person;

 

(b)        without prejudice to the generality of clause (a) and subject to clause (c), the following persons shall always be treated as associates:

 

(i)         an individual and a relative of that individual;

  

(ii)        members of an association of persons;

 

(iii)       a member of an association of persons and the association, where the member, either alone or together with an associate or associates under another application of this section, controls fifty per cent or more of the rights to income or capital of the association;

 

(iv)       a shareholder in a company and the company, where the shareholder, either alone or together with an associate or associates under another application of this section, controls either directly or through one or more interposed persons-

 

(a)        fifty percent or more of the voting power in the company; or

 

(b)        fifty percent or more of the rights to dividends; or

 

(c)        fifty percent or more of the rights to capital; and

 

(v)        two companies, where a person, either alone or together with  an associate or associates  under another application of this section, controls either directly or through one or more interposed persons-

 

(a)        fifty percent or more of the voting power in both companies; or 

 

(b)        fifty percent or more of the rights to dividends in both companies; or 

 

(c)        fifty percent or more of the rights to capital in both companies; and

1

 

(c)        two persons shall not be associate under sub-clause (i) or (ii) of clause (b) where the Collector is satisfied that neither person may reasonably be expected to act in accordance with the intention of the other.

 

Explanation: The expression `relative in relation to an individual’ means-

(i)         an ancestor, a descendant of any of the grandparents, or an adopted child of the individual  or of a spouse of the individual; or

 

(ii)        a spouse of any person specified at sub-clause  (i);

 

(5)        “association of persons” means and include a firm, any artificial or juridical person and body of persons formed under a foreign law, but does not include a company;

 

(6)        “Authority” means the Khyber Pakhtunkhwa Revenue Authority established under this Act;

 

(7)        “banking  company” means  a  banking  company  as  defined  in  the  Banking  Companies Ordinance, 1962 (LVII of 1962) and includes any body corporate which transacts the business of banking in Khyber Pakhtunkhwa;

 

(8)        “Collector” means a person appointed as Collector under this Act;

 

(9)        “Collector (Appeals)”means a person appointed as Collector (Appeals) under this Act;

 

(10)      “committee” means any committee constituted by the Authority;

 

(11)      “Common Taxpayer Identification Number” means the registration number or any other number or identification code allocated to a registered person;

 

(12)      “company” means-

 

(a)        a company as defined in the Companies Ordinance, 1984 (XLVII of 1984);

 

(b)        a body corporate formed by or under any law;

 

(c)        amodarba and any other Islamic financial institution;

 

(d)       a body incorporated outside Pakistan;

 

(e)        a trust, a co-operative society or a finance society or any other society established or constituted by or under any law; or

 

(f)        a foreign association, whether incorporated or not, which the Authority has, by general or special order, declared to be a company for the purposes of this Act.

 

(13)      computerized system” means any comprehensive information technology system, including its development, up-gradation or updation, to be used by the Authority or any other office as may be notified by the Authority, for carrying out the purposes of this Act;

 

(14)      “Council” means the Policy Making Council of the Authority;

 

(15)      “default surcharge” means the default surcharge levied under this Act;

(16)      “defaulter” means a person and, in the case of a company or firm, every director of the company or partner of the firm and includes guarantors or successors, who fail to pay the arrears of tax under this Act and the rules;

 

(17)      “Deputy Collector” means a person appointed as Deputy Collector under this Act;

 

(18)      “Director” means any person appointed as a Director of the Authority;

 

(19)      “Director General” means the Director General of the Authority;

 

(20)      “document” includes any electromagnetic data, computer programmes, computer tapes, computer disks, micro-films or any other medium or mode for the storage or conveyance of such data;

 

(21)      “due date” in relation to the furnishing of a return under Chapter VI means the 15th day of the month following the end of the tax period, or such other date as the Authority  may, by notification in the official Gazette, specify;

 

(22)      “economic activity” means any economic activity under section 22;

 

(23)      “e-intermediary” means a person appointed as e-intermediary under this Act;

 

(24)      “employee” means a person in the employment or service of the Authority;

 

(25)      “exempt service” means a service which is exempt from the tax under section 28;

 

(26)      “Federal Board of Revenue” means the Federal Board of Revenue established under the Federal Board of Revenue Act 2007 (IV of 2007);

 

(27)      “financial year” means the period from 1st July of a year to 30th June of the following year;

 

(28)      “firm” means the relation between two or more persons who have agreed to share the profits of a business carried on by all or any of them acting for all;

 

(29)      “fiscal law” include the laws of the Khyber Pakhtunkhwa relating to sales tax on services, tax on immovable property, capital gain tax, capital value tax, tax on professions, trades, callings or employment, Motor Vehicles, entertainments, land revenue, stamp duty, agricultural income tax, excise duty on alcoholic liquors, opium and other narcotics and such other law imposing any tax, levy, duty, fee, cess or surcharge as the Government may specify;

 

(30)      “goods” include every kind of movable property other than actionable claims, money, stocks, shares and securities but does not include a service defined under this Act;

 

(31)      “Government” means the Government of the Khyber Pakhtunkhwa;

 

(32)      “inter-bank rate” means the Karachi inter-bank offered rate prevalent on the first day of each quarter of a financial year;

 

(33)      “Magistrate” means a Magistrate of the first class empowered under the Code of Criminal Procedure, 1898 (V of 1898);

 

(34)      “officer” means any officer of the Authority;

 

(35)      “open market price” shall have the meaning as given to it by section 24;

 

(36)      “person” means-

 

(a)        an individual;

 

(b)        an association of individuals or persons;

 

(c)        a company;

 

(d)       Federal Government;

 

(e)        a Provincial Government;

 

(f)        a local authority or local government; or

 

(g)        a foreign government, a political subdivision of a foreign government, or public international organization;     

 

3

Explanation: The use of the word “he” in this Act shall be taken to refer to any or all mentioned from (a) to (f) as required in the context of the relevant provision;

 

(37)      “place of business” means whenever  a person-

 

(a)        owns, rents, shares or in any other manner occupies a space in the Khyber Pakhtunkhwa from where he carries on an economic activity whether wholly or partially; or

 

(b)           carries on an economic activity whether wholly or partially through any other person such as an agent, associate, franchise, branch, office, or otherwise in the Khyber Pakhtunkhwa but does not include a liaison office;

 

(38)      “prescribed” means prescribed by the rules or regulations;

 

(39)      “Provincial Consolidated Fund” means the Provincial Consolidated Fund in terms of Article 118 of the Constitution of the Islamic Republic of Pakistan;

 

(40)      “Public Account” means the Public Account of the Province in terms of Article 118 of the Constitution of the Islamic Republic of Pakistan;

 

(41)      “registration number” means the number allocated to a registered person for the purposes of this Act;

 

(42)      “registered person” means a person, who is registered or is liable to be registered under this Act but the person liable to be registered and has not been registered shall not be entitled to any benefit available to a registered person under any of the provisions of this Act or the rules made thereunder;

 

(43)      “return” means any return required to be furnished under Chapter VI of this Act;

 

(44)      “resident” means-

 

(a)        an individual who, in a financial year, has-

 

(i)         a place of business, whole or part thereof, in the Khyber Pakhtunkhwa in any mode, style or manner; or

(ii)        is permanent address, as listed in the individual’s national identity card, in the Khyber Pakhtunkhwa; or

 

(iii)       permanent representative to act on his behalf or to provide service on his behalf in Khyber Pakhtunkhwa;

 

(b)        an association of persons or a company which, in a financial year, has-

 

(i)         its registered office in the Khyber Pakhtunkhwa; or

 

(ii)        its place of business, whole or part thereof, in the Khyber Pakhtunkhwa in any mode, style or manner; or

 

(iii)       a permanent representative to act or to provide service on its behalf in the Khyber Pakhtunkhwa; or

 

(iv)       the control or management of the affairs of the association of persons is situated in Khyber Pakhtunkhwa at any time during the financial year;

 

(45)      “regulations” means the regulations made under this Act; and

 

(46)      “rules” means the rules made under this Act.

 

(47)      “Schedule” means a Schedule appended to this Act;

 

(48)      “service” or “services” means anything which is not goods or providing of which is not supply of goods and shall include, but not limited to, the services listed in First Schedule;

 

Explanation: A service shall remain and continue to be treated as service regardless whether or not rendering thereof involves any use, supply or consumption of any goods either as an essential or as an incidental aspect of such rendering;

 

(49)      “short-paid” means where a registered person pays an amount of tax less than the tax due owing to miscalculation or incorrect assessment of the tax amount due for a tax period;

 

(50)      “similar service” means any other service which is the same as, or closely resembles with, the other service in character, quality, quantity, functionality, materials, or reputation;

 

(51)      “Special Judge” means a Special Judge appointed under section 57 of this Act;

 

(52)      “tax” means and includes-

 

(a)        the tax, additional tax, or default surcharge levied under this Act;

 

(b)        a fine, penalty or fee imposed or charged under this Act; and

 

(c)        any other sum payable or recoverable under this Act or the rules;

 

(53)      “tax fraud” means knowingly, dishonestly or fraudulently and without any lawful excuse-

 

(a)        doing of any act or causing to do any act; or

 

(b)        omitting to take any action or causing the omission of any action, including providing of taxable services liable to registration but without  being registered under this Act; or

 

(c)        falsifying or causing falsification of tax invoices or other tax documents or records; or

 

(d)       acting in contravention of the duties or obligations imposed under this Act or the rules or instructions issued thereunder  with the intention of understating or suppressing the tax liability or underpaying the tax liability;

 

(54)      “tax period” means a period of one month or such other period as the Authority may, by notification in the official Gazette, specify;

 

(55)      “taxable service” shall have the meaning as given to them in section 19 of this Act; and

 

(56)      “value of a taxable service” shall have the  meaning as given to them in section 23 of this Act.

 

PART II

CHAPTER I

 

KHYBER PAKHTUNKHWA REVENUE AUTHORITY

 

3.         Establishment of the Khyber Pakhtunkhwa Revenue Authority.---(1) Government shall, by notification in the official Gazette, establish an Authority to be called the Khyber Pakhtunkhwa Revenue Authority.

 

(2)        The Authority shall be a body corporate, having perpetual succession and a common seal, with power to enter into agreements, acquire, hold, manage and dispose off property and to sue and be sued in its name:

 

            Provided that for the disposal of any immovable property the Authority shall have to obtain the prior approval of the Government.

 

            Provided further that the property shall have to be disposed off through competitive bidding only.

 

(3)        The Authority shall comprise of a Director General and not less than three Directors to be appointed by the Government in such manner and on such terms and conditions as may be prescribed, and until so prescribed as may be determined by the Government.

 

(4)        The Director General shall be a person, who-

 

(a)        has at least a Master’s or equivalent degree in Economics, Political Science, Law, Public Administration, Accounting or Public Financial Management from a recognized University or Institution;

 

(b)        has at least twenty-five years experience in the relevant field, including five years’ experience in tax administration or financial management at senior position;

 

(c)        is not more than sixty-five years of age on the date of appointment; and

 

(d)       possesses such other qualifications which the Government may prescribe.

 

            (5)        The Director General shall be appointed for a period of three years and shall be eligible for re-appointment for a similar term:

 

            Provided that there shall be no further re-appointment of such person on expiry of second term.

 

(6)        The qualifications, experience and other requirements for appointment as Director shall be such as may be prescribed.

 

(7)        If the office of the Director General is vacant or he is absent or is unable to perform the functions of the Director General owing to any cause, the senior most Director, as designated by Government, shall perform the functions of the Director General;

 

Provided that the Government shall fill in the vacant post of Director General within two months.

 

4.         Directorates(1) The Authority may, with the approval of the Council, establish Directorates for tax related specialized functions including intelligence and investigation, finance, internal audit and inspection, training and research as maybe necessary.

 

(2)        The Authority shall assign and regulate the powers and functions of the said Directorates in such manner as it may deem proper.

 

5.         Powers and functions of the Authority.---(1) The Authority shall exercise such powers and perform such functions as are necessary to achieve the purposes of this Act.

 

(2)        Without prejudice to the generality of the powers mentioned in sub-section (1), the Authority shall have powers to–

 

(a)        administer and collect Sales Tax on Services;

 

(b)        administer and collect such other taxes, duties and levies as are assigned to it under a fiscal law;

 

(c)        implement, with the approval of the Government, tax administration reforms;

 

(d)       promote voluntary tax compliance;

 

(e)        implement comprehensive policies and programmes for awareness and facilitation of taxpayers, stakeholders and employees to improve the quality of performance of the Authority as a service oriented entity;

 

(f)        adopt modern effective tax administration methods, information technology systems and policies to consolidate assessments, improve processes, organize registration of tax payers, widen the tax base, and make departmental remedies more efficient including enforcement of, or reduction or remission in duty, penalty or tax, in accordance with the relevant fiscal law;

 

(g)        improve productivity through a comprehensive and effective human resource strategy;

 

(h)        identify and select in transparent manner, qualified work force on such terms and conditions and in such manner as may be prescribed;

 

(i)         grant with the approval of the Council such performance based additional allowances or incentives and rewards to the employees and Director General and Directors of the Authority as may be prescribed;

 

(j)         take appropriate measures including internal controls to combat corruption in the Directorates under the Authority and to provide for checks to ensure that the integrity of the employees is verified periodically through prescribed procedures and the said verification may constitute one of the criteria for the purposes of grant of incentives and consideration for promotion;

 

(k)        direct or advise, where necessary, investigation or inquiry into suspected duty or tax evasion and tax or commercial fraud;

 

(l)         introduce and maintain a system of accountability of performance, competence and conduct of the employees;

 

(m)       implement the mandate and provisions of a fiscal law if so authorized by such law;

 

(n)        establish, with the approval of the Government, a foundation for the welfare of the present and retired employees and their families, and for creating, establishing, organizing and assisting them in the social and cultural facilities;

 

(o)        frame regulations, policies, programme strategies in order to carry out the purposes of the Act;

 

(p)        setup mechanism and processes for remedying the grievances and complaints of the tax payers;

 

(q)        develop a website and adopt, in the prescribed manner, electronic communication in respect of assigned taxation matters such as e-filing, e-payments, e-notice, e-notification, digital imaging, protocols or agreements;

 

(r)        practice transparency and public participation as a norm for all its processes and policies;

 

(s)        review the existing fiscal laws and suggest improvements, if necessary;

 

(t)        form committees and assign or delegate functions to such committees; and

 

(u)        perform such other functions as may be prescribed or are incidental to the above functions or assigned by the Government.

 

(3)        Subject to the provisions of this Act and the relevant fiscal law, the Authority may, where appropriate, issue notifications, circulars and instructions for the enforcement of any of the provisions of the Act or any other fiscal law administered by the Authority.

 

6.         Authority may impose any fee, cess or charges.The Authority may, with the approval of the Government, levy any fee, cess or charges for provision of additional or enhanced facilities to the tax payers, or may direct reimbursement of such cost or expense as is incurred by the Authority on that account.

 

7.         Meetings.---(1) The Authority shall meet at least once in a month but the Director General may, at any time, call a special meeting of the Authority.

 

(2)        The Authority shall conduct its meetings, take decisions and keep record of the proceedings of the meetings in such manner as may be prescribed, and until so prescribed as may be determined by the Authority.

 

(3)        The Authority shall take decisions through simple majority with the casting vote of Director General

 

(4)        The quorum for a meeting shall be three including the Director General.

 

8.         Validity of proceedings.---No act, proceeding, decision or order of the Authority or a committee shall be invalid only by reason of existence of a vacancy or any defect in the constitution of the Authority or the committee.

 

9.         Properties and assets to vest in the Authority.---(1) All properties, assets and records transferred to, or purchased or acquired by the Authority and all intellectual property rights arising from technical or professional reports, analysis, systems, written, prepared or developed by the employees of the Authority or procured by the Authority shall vest in the Authority and shall be the property of the Authority.

 

(2)        The Authority may create its own logo, insignia, stationary, forms, returns, challans and online communication mechanism.

 

10.       Data bank.---(1) The Authority shall create, collect and maintain a data bank containing information in any form necessary to achieve the purposes of this Act.

 

(2)        The Authority shall have the power to share its data with or obtain and require data from Federal or any other provincial government or any of its statutory body, law enforcement entity or utility company, stock exchange, State Bank of Pakistan, Security Exchange Commission of Pakistan, Pakistan Telecommunication Authority, banks, financial institutions or other organizations including any ministry, division and attach department, body or authority of the Federal or any other provincial government.

 

CHAPTER II

POLICY MAKING COUNCIL

 

11.       Policy Making Council.---(1) There shall be a Policy Making Council of the Authority comprising of the following:

 

(i)

Chief Minister, Khyber Pakhtunkhwa;

Chairman

 

(ii)

Minister for Finance Department, Khyber Pakhtunkhwa;

 

Member

(iia)

Minister for Law, Parliamentary Affairs and Human Rights, Khyber Pakhtunkhwa;

Member

(iii)

Minister of Excise and Taxation, Khyber Pakhtunkhwa;

 

Member

(iv)

Chief Secretary, Khyber Pakhtunkhwa;

Member

(v)

Secretary to Government, Finance Department;

 

Member

(vi)

Secretary to Government, Law Department;

Member

(vii)

Secretary to the Government, Excise and Taxation;

 

Member

(viii)

a maximum of four private members to be nominated by the Government from amongst the eminent economists, tax experts, bankers, chartered accountants, representatives of Chambers of Commerce and Industry or civil society organizations; and

 

Member

(ix)

Director General of the Authority;

Member-cum-Secretary

(2)        The Council may co-opt any other person as member of the Council.

 

(3)        The Council shall be a Policy Making body for the Authority and shall formulate Policy guidelines pertaining to tax administration, planning, reforms, budget and any other matter referred to it by the Government.

 

(4)        The policies formulated by the Council shall be binding upon the Authority.

 

(5)        The Chief Minister and, in his absence, the Minister for Finance Department shall be the Convener of the Policy Making Council.

 

(6)        The Council shall meet at least once every six month.

 

(7)        The Council shall perform its functions in such manner as may be prescribed.

 

CHAPTER III

BUDGET AND ACCOUNT

 

12.       Fund.---(1) There shall be established a Fund to be known as the Khyber Pakhtunkhwa Revenue Authority Fund vested in the Authority  which shall be utilized to meet the expenses including the payment of salaries and other remuneration to the staff  administered and controlled by the Authority.

 

(2)        The Fund shall consist of–

 

(a)        grants if any, made by the Government, the Federal Government or any other authority or agency;

 

(b)        loans obtained from the Government including the Federal Government and commercial Banks or any other source;

 

(c)        foreign loans, grants or any other financial assistance obtained;  

 

(d)       fee and charges collected and profits earned by the Authority; and

 

(e)        income from any other source.

 

(3)        The Authority may keep money in any Schedule Bank which shall be operated according to the regulations of the Authority.

 

(4)        Nothing in sub-section (3) shall be deemed to preclude the Authority from investing any such moneys which are not required for immediate expenditure in any of the securities described in section 20 of the Trust Act, 1982 (Act No. II of 1882), or placing them in a fixed deposit in any Schedule Bank or National Saving Centre.

 

13.       Budget and accounts.---(1) The Authority shall, before the commencement of each financial year, prepare a statement of the estimated receipts, revenue targets and expenditure of the Authority for the financial year in the prescribed manner and submit it to the Government for consideration and approval.

 

(2)        The Authority shall maintain proper accounts and other records relating to its financial affairs including its income and expenditures and its assets and liabilities in such form and manner as may be prescribed.

 

(3)        As soon as may be, after the end of each financial year, the Authority, in the manner prescribed, shall cause to be prepared for that financial year a statement of account of the Authority, which shall include a balance-sheet and an account of income and expenditure.

 

14.       Audit.---(1) The Auditor General of Pakistan shall annually audit the accounts of the Authority.

 

(2)        The Authority, in addition to the audit under sub-section (1), shall also cause the annual accounts of the Authority audited, in the prescribed manner, by a Chartered Accountant or a firm of Chartered Accountants.

(3)        The Authority shall devise for itself adequate mechanisms to document internal controls, ensure continuous internal audit and performance evaluation from time to time.

 

CHAPTER IV

EMPLOYMENT IN AUTHORITY

 

15.       Human resource management.---The Authority may-

 

(a)        develop and implement human resource management policies;

 

(b)        assess, identify, create, increase, decrease or designate or re-designate posts and prepare and execute the internal job posting regime;

 

(c)        lay down qualifications and criteria for the posting of employees against specialized or available posts;

 

(d)       implement a transparent and objective evaluation process to determine that an employee is qualified for posting against a specialized or available post;

 

(e)        make assessment of integrity and proficiency of the employees for purposes of evaluation, posting, promotion, transfer or other incidental matters;

 

(f)        transfer, select or post any employee against any post on the basis of transparent criteria of selection in any entity administered by the Authority;

 

(g)        take action, issue orders, regulations, guidelines, code of conduct to achieve the purposes of this Act;

 

(h)        appoint, with or without remuneration, such advisers, commissioners, consultants, experts, interns, liaison officers on such terms and conditions as may be prescribed;

 

(i)         fix, with the approval of the Council, an honorarium or remuneration for the services rendered by advisers, consultants, experts, fellows, interns, officers and staff of the Authority, liaison officers and other staff engaged by the Authority; and

 

(j)         impart the requisite training to its employees for purposes of better tax administration.

16.       Staff.---(1) The Authority may employ such persons as may be necessary for the efficient performance of its functions in such manner and on such terms and conditions as may be prescribed, or unless so prescribed, as determined by the Council.

 

(2)        The Authority may terminate the services of any employee at any time in accordance with the regulations as may be prescribed.

 

(3)        The Authority may, in the manner prescribed, absorb in its service any employee who is on deputation with the Authority, subject to prior approval of the Government or the employer and consent of the employee.

 

(4)        The terms and conditions of service of an employee, on absorption, shall not be less favourable than those admissible to such employee immediately before his absorption in the service of the Authority:

 

Provided that the Authority may, by regulation specify criteria for seniority amongst its employees.

 

(5)        Notwithstanding anything contained in this Act, an appointment of a person to a post in the Authority shall not confer any right on such person to continue to serve in the said post.

 

17.       Public servants.---The employees and other persons authorized to perform or exercise any function or power under this Act or render services to the Authority as agents, advisors or consultants shall be deemed to be public servants within the meanings of section21of the Pakistan Penal Code1860 (XLVof1860).

 

18.       Indemnity.–(1) No prosecution, suit or other legal proceedings hall lie against the Authority or its employees for anything done in good faith for carrying out the purposes of the Act, rules or regulations.

 

(2)        No Federal or any other provincial government or any statuary body shall initiate any enquiry or investigation against the official conduct of any of the employees of the Authority without prior approval of the Authority.

 

PART III

Chapter I

Sales Tax on Services

 

19.       Taxable Service.---(1) A taxable service is a service listed in the Second Schedule to this Act, which is provided:

 

 

(a)        by a registered person from his registered office or  place  of business in the Khyber Pakhtunkhwa;

 

(b)        in the course of an economic activity, including its  commencement or termination of the activity.

 

Explanation: This sub-section deals with services provided by registered persons, regardless of whether those services are provided to resident persons or non-resident persons.

 

(2)        A service that is not provided by a registered person shall be treated as a taxable service, if the service is listed in the Second Schedule to this Act and-

 

(a)        is provided to a resident person;

 

(b)        by a non-resident person in the course of an economic activity, including its commencement or termination of the activity.

 

Explanation:  This sub-section deals with services provided by non-resident persons to resident persons.

 

(3)        For the purposes of sub-section (2), where a person has a registered office  or  place  of  business  in  the Khyber Pakhtunkhwa  and  another  office outside  Khyber Pakhtunkhwa, the registered office or place of business in Khyber Pakhtunkhwa and that outside Khyber Pakhtunkhwa shall be treated as separate legal persons.

 

(4)        The Authority by notification, prescribe regulation for determining the conditions under which a particular service or class of services will be considered to have been provided by a person from his registered office or place of business in the Khyber Pakhtunkhwa.

 

20.       Application of principles of origin and reverse charge in certain situations.---(1) Where a person is providing taxable services in a Province other than Khyber Pakhtunkhwa but the recipient of such services is resident of Khyber Pakhtunkhwa or is otherwise availing such services in Khyber Pakhtunkhwa and has charged tax accordingly, the person providing such services shall pay the amount of tax so charged to the Government.

 

(2)        Where the recipient of a taxable service is a person registered under this Act, he shall deduct the whole amount of tax in respect of the service received and pay the same to the Government.

 

 

(3)        Where a person is providing taxable services in more than one Province or territory in Pakistan including Khyber Pakhtunkhwa, such person shall be liable to pay tax to the Government to the extent the tax is charged from a person resident in Khyber Pakhtunkhwa or from a person who is otherwise availing such services in Khyber Pakhtunkhwa.

 

(4)        Where rendering of a taxable service originates from Khyber Pakhtunkhwa but terminates outside Pakistan, such person shall be required to pay the tax on such service to the Government.

 

(5)        Where a taxable service originates from outside Pakistan but is received or terminates in Khyber Pakhtunkhwa, the recipient of such service shall be liable to pay the tax to the Government.

 

(6)        The persons who are required to pay the tax to the Government in terms of sub-sections (1), (2), (3),  (4) and (5) shall be liable to registration for the purposes of this Act.

 

(7)        All questions or disputes relating to the application of the principle of origin given in this section shall be resolved in terms of the already recorded understanding between the Federal Government and the Provincial Governments on the implementation of reformed General Sales Tax:

 

Provided that pendency of any such question or dispute shall not absolve the concerned person from his obligation to deposit the tax.  

 

(8)        The provisions of this section shall apply notwithstanding any other provision of this Act or the rules and the Government may specify special procedure to regulate the provisions of this section.

 

21.       Amendment in Second Schedule.---(1) Government may, by notification in the official Gazette, make an amendment in the Second Schedule by modifying, adding or deleting any entry or entries with reference to the classification, if any, description of any service or class of services and the rate of tax chargeable on any service or class of services not exceeding the maximum rate prescribed in the Second Schedule.

 

(2)        A notification issued under sub-section (1), shall be effective from such date as may be specified in the notification but such date shall not be prior to the date on which the notification is published in the official Gazette.

 

(3)        Government shall at the time of presenting the Annual Budget Statement for the next financial year, lay before the Provincial Assembly of the Khyber Pakhtunkhwa all the notifications relating to the amendments in the Second Schedule during the current financial year.

22.       Economic activity.---(1) An economic activity means any activity carried on whether continuously, regularly or otherwise by a person that involves or is intended to involve the provision of services to another person and includes-

 

(a)        an activity carried on in the form of a business, including a profession,  calling, trade, or undertaking of any kind, whether or not the activity is undertaken for any consideration or profit;

 

(b)        the supply of movable property by way of lease, license or such similar arrangement; and

 

(c)        a one-time transaction or concern in the nature of a business or trade.

 

(2)        Anything done or undertaken during the commencement or termination of an economic activity shall be construed as part of the economic activity.

 

(3)        An economic activity does not include-

 

(a)        the activities of an employee providing services in that capacity to an employer; or

 

(b)        a private recreational pursuit or hobby of an individual.

 

 

23.       Value of a Taxable Service.--- The value of a taxable service is:

 

(a)        the  consideration  in  money  including  all  Federal  and  Provincial duties  and  taxes,  if  any,  which  the  person  providing  a  service receives from the recipient of the service but does not include the amount of tax under this Act:

 

Provided that-

 

(i)         in case the consideration for a service is in kind or is partly in kind and partly in money, the value of the service shall mean the open market price of the service as determined under section 24 excluding the amount of sales tax under this Act; 

 

(ii)        in case the person provides the service and the recipients of the service  are  associated   persons  and  the  service  is    supplied for no consideration or for a consideration which is lower than the price at which the person provides the service to other persons who are not associated persons, the value of the service shall  mean the price at which the service is provided  to  such  other  persons  who  are  not  associated persons excluding the amount of sales tax; and

 

(iii)       in case a person provides a service for no consideration or for a  consideration which is lower than the price at which such a service is provided by other persons, the value of the service shall mean the open market price for such a service;

 

(b)        in  case  of  trade  discounts,  the  discounted  price  excluding  the amount of sales tax under this Act, provided that the tax invoice shows the discounted price and the related tax and the discount allowed is in conformity with customary business practice;

 

(c)        in case there is reason to believe that the value of a service has not  been correctly declared in the invoice or for any special nature of transaction it is difficult to ascertain the value of a service, the open market price, as determined under section 24; and

 

(d)       notwithstanding  any  of  the  above,  where  the  Authority  deems  it necessary it may, by notification in the official Gazette, fix the value of any service or class of services and for that purpose fix different values for different classes or  description of the same or similar types of services;

 

Provided that where the value at which the service is provided is higher than the value fixed by the Authority, the value of the service shall, unless otherwise directed by the Authority, be the value at which the service is provided.

 

24.       Open market price.---(1) The open market price of a service is-

 

(a)        the price, the service would fetch in an open market transaction freely entered into between persons  who are not associated persons; 

 

(b)        if it is not possible to determine an amount under paragraph (a), the price a similar service would fetch in an open market transaction freely made between persons who are not associated persons, adjusted to take account of the differences between the similar service and this Actual service; and

 

(c)        determined on the basis of the market conditions prevailing at the time and place at which the  service is provided.

 

(2)        If the open market price of a service cannot be determined under sub-section (1), it may be determined by using any method or formula specified by the Authority for calculating an objective approximation of the price, the service would fetch in an open market transaction freely made between persons who are not associated.

 

25.       Provision of services over a period of time.---(1) Where a service is provided over a period of time and payment for the same is made on a periodic basis, the service shall be treated as comprising two or more separate and distinct services each corresponding to the part of the service to which each separate part of the consideration relates.

 

ILLUSTRATIONS

(a)        Where services are provided for a two year period and payment is made on a semi-annual basis, the provision of services for each six month period constitutes a separate service.

 

(b)        Where an insurance company provides an insurance policy over a five year period and receives a premium on an annual basis, each premium relates to a separate service.

 

8

(2)        This section does not apply to services for which payment is made on installments basis.

 

CHAPTERII

SCOPE OF TAX

 

26.       Scope of tax and allied matters.---(1) Subject to the provisions of this Act, there shall be charged, levied, collected and paid a tax on the value of a taxable service at the rate specified in the Second Schedule.

 

(2)        Government may, on the recommendation of the Authority and subject to such conditions and restrictions as the Government may impose, by notification in the official Gazette, declare that in respect of any taxable service provided by a registered person or a class of registered persons, the tax shall be charged, levied and collected at such higher, lower, fixed or specific rate as may be specified in the said notification.

 

 

(3)        Notwithstanding other provisions of this Act, the Authority may, with the prior approval of the Government and by notification in the official Gazette and subject to the conditions, restrictions, limitations or otherwise, fix the limit or threshold of annual turnover of any service or class of services provided by any person or class of persons below which such person or class of persons shall be exempt from payment of tax under this Act.

(4)        A person required to pay tax under this Act shall be entitled to deduct from the payable amount, the amount of tax already paid by him on the receipt of taxable services used exclusively in connection with taxable services provided by such person subject to the condition that he holds a true and valid tax invoice not older than six tax periods, showing the amount of tax earlier charged and paid under this Act on the services so received but the Authority may, by notification in the official Gazette, disallow or restrict such deduction in case of any service or services as it may deem appropriate.

 

27.       Person liable to pay tax.---(1) Where a service is taxable by virtue of sub-section (1) of section 19, the liability to pay the tax shall be on the registered person providing the service.

 

(2)        Where a service is taxable by virtue of sub-section (2) of section 19, the liability to pay the tax shall be on the person receiving the service.

 

(3)        The Authority may, by notification in the official Gazette, specify the service or services in respect of which the liability to pay tax shall be on any person, other than the person providing the taxable service, or the person receiving the taxable service.

 

(4)        Nothing contained in this section shall prevent the collection of tax from a different person if that person is made separately or jointly or severally liable for the tax under section 35.

 

28.       Exemptions.---(1) Notwithstanding anything contained in sections 19 and 26, the Authority may, with the approval of the Government and subject to such conditions, limitations or restrictions as it may impose, by notification in the official Gazette, exempt-

 

(a)        taxable service or services from the whole or any part of the tax;

 

(b)        taxable service or services provided by a person or class of persons from the whole or any part of the tax;

 

(c)        recipient or recipients of service or services, including international organizations and institutions, from the payment of the whole or any part of the tax; and

 

(d)       a class of persons, any area or areas of the Khyber Pakhtunkhwa from the whole or any part of the tax..

 

(2)        The exemption under sub-section (1) may be allowed from any previous date specified in the notification issued under sub-section (1).

 

29.       Effect of change in the rate of tax.----If there is a change in the rate of tax, the taxable services shall be charged to tax at such rate as is in force at the time the service is provided.

 

30.       Special procedure and tax withholding provisions.---(1) Notwithstanding anything contained in this Act, the Authority may, by notification in the official Gazette, prescribe a special procedure for the payment of tax, registration, book keeping, invoicing or billing requirements, returns and other related matters in respect of any service or class of services, as may be specified.

 

(2)        Notwithstanding any other provisions of this Act, the Authority may require any person or class of persons whether registered or not for the purpose of this Act to withhold full or part of the tax charged from such person or class of persons on the provision of any taxable service or class of taxable services and      to deposit the tax so withheld, with the Government within such time and in such manner as it may, by notification in the official Gazette, specify.

 

31.       Delegation of power to collect, administer and enforce sales tax on certain services.---(1) Notwithstanding anything contained in this Act, the Government may, by notification in the official Gazette, authorize the Federal Board of Revenue or any other Federal or Provincial department, agency, organization or person to administer, collect and enforce the levy of sales tax on such taxable services as it may notify and in such  mode and manner and for such  period  as  it  may  prescribe  and  subject  to  such  restrictions  and conditions as it may impose.

 

(2)        Notwithstanding anything contained in this Act, where the Government notifies any taxable services under sub-section (1) above, for the period specified  therein,  except  for  the  provisions  of  Chapters  I  and  II  and sections 109, 113 and 115, the remaining provisions of this Act shall not be applicable to such taxable services.

 

(3)        At the end of the period specified in sub-section (1) above, the tax on taxable services notified under sub-section (1) shall be administered, collected and enforced by the Authority in the same mode and manner as all other taxable services and all provisions of this Act shall be applicable to them.

 

 

32.       Adjustments.---(1) The Authority may, subject to such conditions and restrictions as it may specify, allow registered persons to claim adjustments or deductions, including refunds arising as a result thereof, in respect of the tax paid under any other law on any account in respect of any taxable service or goods or class of taxable services or goods provided by them.

 

(2)        For the purposes of sub-section (1), the Authority may adopt the principles or concepts laid down in such other law in respect of adjustments, deductions or refunds including zero-rating principle.

 

(3)        No adjustment or deduction of any tax payable under any other law shall be claimed by any person except in the manner and to the extent specified in the notification issued under sub-section (1).

 

CHAPTER III

PAYMENT AND COLLECTION OF TAX ON TAXABLE SERVICES

 

33.       Collection of excess tax.---(1) Any person so authorized, who has collected or collects the tax or charge, whether under misapprehension of any provision of this Act or otherwise, which was not payable as tax or charge or which was in excess of the tax or charge actually payable and the incidence of which had been passed on to the person to whom the service was provided, shall pay the amount of tax or charge so collected to the Government.

 

(2)        Any amount payable to the Government under sub-section (1) shall be deemed to be an arrear payable under this Act and shall be recovered accordingly.

 

(3)        The burden of proof that the incidence of tax or charge referred to in sub-section (1), has been or has not been passed on to the person to whom the service is provided shall be on the person collecting the tax or charge.

 

34.       Time, manner and mode of payment.---(1) The tax in respect of a taxable service provided during a tax period shall be paid by a person at the time of filing the return in respect of that period under Chapter VI.

 

(2)        For the purposes of sub-section (1), a taxable service shall be considered to have been provided in the tax period during which-

 

(a)        it was provided to the recipient;

 

(b)        an invoice for the value of the taxable service was issued or was due to be issued or sent or due to be sent to the recipient; or

 

(c)        consideration for the same was received, whichever is earlier.

 

(3)        Notwithstanding anything contained in sub-section (1), the Authority may, by notification in the official Gazette, direct that the tax in respect of any taxable service or such class of taxable services shall be charged, collected and paid in any other way, mode, manner or time as may be specified in the notification.

 

(4)        The tax due on taxable services shall be paid by any of the following modes namely:

 

(a)        through deposit in a bank designated by the Authority; or

 

(b)        through such other mode and manner as may be specified by the Authority.

 

35.       Joint and several liability of registered persons where tax unpaid.---Where a registered person receiving a taxable service from another registered person is in the knowledge of or has reasonable grounds to suspect that some or all of the tax payable in respect of that taxable service or any previous or subsequent taxable service provided or to be provided would go unpaid as against the requirements of this Act, such person as well as the person providing the taxable service shall be jointly and severally liable for payment of such unpaid amount of tax.:

 

            Provided that the Authority may, by notification in the official Gazette, exempt any person, service or transaction or class of persons, services or transactions from the provision of this section.

 

36.       Sales of taxable activity or transfer of ownership.---(1) Where the ownership of any business providing taxable services is sold, transferred or otherwise disposed of as an ongoing concern or activity, the fact of such sale, transfer or other disposition shall be intimated to the Collector within one month of the occurrence of such fact by the former owner.

 

(2)        The tax chargeable on the taxable services provided in the business referred to in sub-section (1), shall be accounted for and paid by the person to whom sale or other disposition of such business is made or ownership thereof is transferred and every such person shall be liable to registration under this Act.

 

37.       Estate of deceased person.---The tax liability of a deceased registered person under this Act shall be the first charge on his estate in the hands of his successors.

 

38.       Estate in bankruptcy.---(1) Where a registered person is declared bankrupt, the tax liability under this Act shall pass on to the estate in bankruptcy, if it continues to operate the business.

 

(2)        Where the tax liability is incurred by an estate in bankruptcy, the tax shall b deemed to be a current expenditure in the operations of the estate in bankruptcy and shall be paid before the claims of all other creditors are settled.

 

39.       Liability for payment of tax in case of private companies or business enterprises.---Notwithstanding anything contained in the Company Ordinance, 1984 (No. XLVII of 1984), where any company or business enterprise is wound up and any tax chargeable on or payable by the company or business enterprise, whether before, or in the course of, or after its liquidation, in respect of any tax period cannot be recovered from the company or business enterprise, every person who was an owner of, or partner in, or director of the company or business enterprise during the relevant period shall, jointly and severally be liable for payment of such tax.

 

40.       Assessment of tax.---(1) Where on the basis of any information acquired during an audit, inquiry, inspection or otherwise, an officer of the Authority is of the opinion that a registered person has not paid the tax due on taxable services provided by him or has made short payment, the officer shall make an assessment of the tax actually payable by that person and shall impose a penalty and charge default surcharge in accordance with sections 64 and 65.

 

(2)        No order under sub-section (1) shall be made unless a notice to show cause is given to the person in default within five years from the end of the tax period to which the assessment relates specifying the grounds on which it is intended to proceed against him and the said officer shall take into consideration the representation made by such person and provide him an opportunity of being heard if the person so desires.

 

(3)        An order under sub-section (1), shall be made within one hundred and twenty days of issuance of the show cause notice or within such extended period as the officer may, for reasons to be recorded in writing, fix:

 

 Provided that such extended period shall ordinarily not exceed sixty days.

 

(4)        In computing the period specified in sub-section (3), any period during which the proceedings are adjourned on account of a stay order or proceedings under section 89 or the time taken through adjournments by the person shall be excluded.

 

(5)        An order passed under sub-section (1), may be further amended as may be necessary when on the basis of any information acquired during an audit, inquiry, inspection or otherwise, the officer is satisfied that-

 

(a)        any tax has been under-assessed or assessed at a low rate; or

 

(b)        any taxable service provided by the person has escaped assessment.

 

(6)        The Collector may amend, or further amend any order passed under sub-section (1) or (5), if he considers that the order is erroneous or pre-judicial to interest of Justice.

 

(7)        The provisions of sub-sections (2), (3) and (4) shall be applicable to an order passed under sub-section (5) and (6).

 

(8)        Notwithstanding anything contained in this Act, the Authority may prescribe thresholds, parameters, standards and basis for assessment of supply value and the assessment of tax.

 

CHAPTER IV

REGISTRATION

 

41.       Registration.---(1) A person shall register under this Act, who-

 

(a)        provides any taxable service from his office or place of business in Khyber Pakhtunkhwa; or

 

(b)        is otherwise required to be registered under any of the provisions of this Act or the rules; or

 

(c)        fulfills any other criteria or requirements which the Authority may prescribe under sub-section (2).

 

(2)        The registration under this section will be regulated in such manner and subject to such conditions and restrictions as the Authority may, by notification in the official Gazette, specify.

 

(3)        A person who receives a service, which is a taxable service by virtue of sub-section (2) of [1][section 19], and is not a registered person shall be deemed to be a registered person for the purposes of the tax period in which-

 

(a)        such person receives the service;

 

(b)        an invoice for the value of the service is issued or sent to or received by the person; or

 

(c)        consideration for the service is paid by the person whichever is earlier and all the provisions of this Act and the rules shall be applicable to such person for that particular tax period and any matters relating to, arising out of, or concerning that tax period as if that person had provided the service.

(4)        The Authority may publish on its website a list of persons registered under this Act.

 

(5)        It shall be reasonable for a person to believe that another person is registered under this Act, if that other person is on the list placed on the website of the Authority.

 

42.       Voluntary registration.---(1) A person, who carries on an economic activity but is not required to be registered may apply for voluntary registration at any time.

 

(2)        If a person who is not required to be registered, applies for voluntary registration, the Authority may register the person if the Authority is satisfied that-

 

(a)        the person is providing, or shall provide a service that is a taxable service if the person was registered;

 

(b)        the person has a place of business at which he carries on an economic activity;

 

(c)        there are reasonable grounds to believe that the person shall keep proper records and file regular returns as prescribed under this Act and the rules; and

 

(d)       if the person has commenced an economic activity, the person has-

 

(i)         kept proper records in relation to his economic activity; and

 

(ii)        complied with his obligations under other applicable taxation laws.

 

43.       Compulsory registration.---(1) If the Authority is satisfied that a person whois required to be registered and has not applied for registration, the Authority shall register the person and shall, not later than fifteen days before the day on which the registration takes effect, notify the person of the registration, the day on which it takes effect, and the registration number issued to the person.

 

(2)        No person shall be registered compulsorily without being given an advance notice and an opportunity of being heard in such manner as the Authority may specify.

 

(3)        The Authority may, by notification in the official Gazette, authorize any officer to perform any of the functions under this section relating to compulsory registration of a person for any of the taxable services.

 

44.       Application for registration.---(1) A person, who is required to be registered shall apply for registration in such manner and mode as may be specified by the Authority  not later than fifteen days before the day on which the person becomes liable to be registered.

 

(2)        If the Authority is satisfied that the person is liable for registration, the Authority shall, within fifteen days of receiving the application-

                                    

(a)        register the person; and

 

(b)        notify the person of the registration, the day on which it takes effect, and the registration number issued to the person.

 

(3)        Where a person who is not required to be registered, applies for registration, the Authority shall, within fifteen days of receiving the application, notify the person of the decision on the application, and if-

 

(a)        the Authority registers the person, the notice shall state the day on which the registration takes effect and the registration number is issued to the person; or

 

(b)        the Authority rejects the application, notify the person of the reasons for the decision and outlining the person’s right to appeal against the decision.

 

(4)        The Authority shall issue every registered person with a registration number for the purpose of this Act.

 

45.       Suspension of registration.---(1) Subject to sub-section (3), the Authority may temporarily inactivate the registration of a person if it is satisfied that the person-

 

(a)        is not entitled to be registered; or

 

(b)        has failed to comply with the obligations under this Act or the rules.

 

(2)        The Authority shall give notice to a registered person stating the reasons for temporary inactivation of the person’s registration and the remedial actions required to be taken by the person in such time as may be specified in the notice.

 

(3)        In case the Authority is not satisfied with the response of the person or no remedial action taken by him or does not receive any response in the specified time, the Authority may suspend that person’s registration.

 

(4)        The suspension of registration shall be affected by removing the name of the person from the list of registered persons published on the Authority’s website.

 

(5)        At any time within a period of sixty days of suspension, the Authority may withdraw the suspension if it is satisfied with the remedial actions taken by the person.

 

(6)        Where at the expiry of sixty days, the suspension has not been withdrawn, the Authority may-

 

(a)        institute proceedings against the person in respect of the alleged non-compliance under this Act;

 

(b)        re-instate the person’s registration; or

 

(c)        cancel the person’s registration, if neither of the actions in clauses (a) and (b) is satisfied.

 

(7)        No registration shall be cancelled unless the Authority either through enquiry, investigation or audit is satisfied that circumstances exist necessitating such cancellation and under no circumstances, the cancellation of registration shall absolve the person of his other obligation and liabilities under this Act or the rules.

 

46.       De-registration.---(1) The Authority may de-register a registered person or such class of registered persons not required to be registered under this Act.

 

(2)        Where any person registered under this Act believes that he does not satisfy the requirements for registration specified in section 41, he may make an application to the Authority to be de-registered.

 

(3)        If upon receiving such an application, the Authority is satisfied that the person is not required to be registered under this Act and has fulfilled the obligations under this Act, it shall de-register such person.

 

(4)        Where the Authority receives an application under sub-section (2), it shall dispose of the application within a period of three months from the date of the receipt of the application, or within such extended period, not exceeding sixty days, as the Authority may, for reasons to be recorded in writing, fix.

 

 

 

 

 

CHAPTER V

BOOK KEEPING AND AUDIT PROCEEDINGS

 

47.       Issuance of tax invoices.---(1) A registered person providing a taxable service shall issue a serial   numbered and dated tax invoice containing the following particulars:-

 

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

 

(b)        name, address and registration number, if any, of the service recipient;

 

(c)        description of service or services;

 

(d)       value exclusive of the tax;

 

(e)        amount of the tax; and

 

(f)        value inclusive of the tax..

 

(2)        The Authority may, by notification in the official Gazette, specify such modified invoices for different services or persons and prescribe the manner and procedure for regulating the issuance and authentication of tax invoices.

 

(3)        A registered person providing a taxable service may, subject to such conditions and restrictions as the Authority may by notification in the official Gazette specify, issue invoices to another registered person or other recipient of taxable service electronically and transmit images or statements of such invoices to the Authority as well as to the Collector, as may be specified.

 

48.       Records.---(1) A registered person providing taxable service shall maintain and keep at his business premises or registered office in English or Urdu the following records of taxable service  including exempt service provided by him or by his agent acting on his behalf in such form and manner as would permit ready ascertainment of his tax liability during a tax period-

 

(a)        records of taxable service provided indicating-

 

(i)         the description and type of service;

 

(ii)        the value of the service;

 

(iii)       the particulars of the person to whom the service was provided; and

 

(iv)       any other information as may be specified by the Authority;

 

(b)        records of exempt service; and

 

(c)        such other records as may be specified by the Authority.

 

(2)        The Authority may, by notification in the official Gazette, require a registered person or class of registered persons to declare and use as many number of business bank accounts as may be specified by the Authority in such notification to make or receive payments on account of providing services for the purpose of this Act and the rules and to make payment of due tax from such accounts.

 

(3)        The Authority may, by notification in the official Gazette, specify that any person or class of persons registered under this Act, shall use such electronic fiscal cash registers in such manner as are approved by the Authority.

 

 

                                  (4)        The Authority may, by notification in the official Gazette, prescribe the procedure or software for electronic invoicing or Acting, maintenance of records, filing of tax returns and for any other matter or approve any software for electronic invoicing or billing, maintenance of records and filing of returns by a registered person or class of such persons under this Act.

 

(5)        The registered persons, whose accounts are subject to audit under the Companies Ordinance, 1984 (XLVII of 1984), shall be required to submit a copy of the annual audited accounts, along with a certificate by the auditors certifying the payment of the tax due and any deficiency in the tax paid by the registered person.

 

49.       Retention and production of records and documents.---(1) A person, who is required to maintain any record or documents under this Act, shall retain the record and documents for a period of five years after the end of the tax period to which such record or documents relate or till the final decision in any proceedings including proceedings for assessment, appeal, revision, reference or petition, whichever is later.

 

(2)        A person who is required to maintain any record or documents under this Act or any other law shall, as and when required by an officer not below the rank of the Assistant Collector, produce records or documents which are in his possession or control or in the possession or control of his agent, and where such records or documents have been stored as electronic data, he shall allow to such officer full and free access to, and use of, such data of any machine.

 

50.       Audit proceedings.---(1) An officer authorized by the Authority or the Collector may, on the basis of the return or returns submitted by a registered person or the records maintained under this Act and the rules, conduct an audit of such person.

 

(2)        In case the Authority or the Collector has any information showing that any registered person is involved in tax fraud or evasion of tax, it or as the case may be, he, may authorize an officer not below the rank of the Assistant Collector, to conduct an inquiry or investigation, which may or may not be in addition to any audit carried out for the same period.

 

(3)        Where the officer is to conduct an audit under sub-section (1), he shall issue a notice of audit to the person informing him of the audit proceedings and direct him to produce any records or documents which such officer may require for conducting the audit.

 

(4)        The officer shall conduct audit and issue an audit observation pointing out the contraventions of this Act or the rules and the amount of the tax evaded or short paid, and the registered person may, within a period of twenty one days of the receipt of the audit observation, submit his reply in writing.

 

(5)        If no reply is received within the specified time or the reply furnished by the registered person is found unsatisfactory, the officer shall issue an audit report specifying the amount of the tax or charge that has not been levied or has been short levied or any other violation of any provision of this Act or the rules.

 

(6)        After completion of the audit under this section or any other provision of this Act or the rules, an officer having pecuniary jurisdiction in terms of section 76 shall, if required, pass an order determining the correct amount of payable tax, charging default surcharge and imposing a penalty.

 

(7)        Notwithstanding the penalties prescribed in section 64-

 

(a)        if a registered person wishes to deposit the amount of the tax short paid or evaded along with default surcharge voluntarily, whenever it comes to his notice, he may, before receipt of notice of audit, file a revised return and may deposit the amount of tax short paid or evaded along with default surcharge, in which case no penalty shall be recovered from him;

 

(b)        if a registered person wishes to deposit the amount of the tax short paid or evaded along with default surcharge during the audit, or at any time before issuance of show cause notice in lieu of the audit report,  he may file a revised return and may deposit the short paid or evaded amount of the tax, default surcharge under section 65 and twenty per cent of the penalty payable under section 64, in which case the show cause notice in lieu of the audit report shall not be issued in the matter;

 

(c)        if a registered person wishes to deposit the amount of tax short paid or evaded along with default surcharge after issuance of show cause notice, he may file a revised return and may deposit the short paid or evaded amount of the tax, default surcharge under section 65, and fifty per cent of the penalty payable under section 64 and, thereafter, the show cause notice shall abate.

 

51.       Special audit by chartered accountants or cost accountants.---(1) The Authority may, by notification in the official Gazette, appoint a Chartered Accountant as defined under Chartered Accountants Ordinance, 1961 (X of 1961) or a firm of Chartered Accountants or a Cost and Management Accountant [2][or any consultant, foreign or local, having expertise in the forensic audit]within the meaning of the Cost and Management Accountants Act, 1966 (XIV of 1966) or a firm of Cost and Management Accountants, for conducting a special audit of the records of any registered person.

 

(2)        Notwithstanding that the records of a registered person have been audited by an officer appointed under section 56, the Authority or a Collector may direct an auditor appointed under sub-section (1) to audit the records of any registered person for the same period.

 

(3)        An auditor appointed under sub-section (1), shall have such powers of an officer as may be conferred by the Authority to such auditor under any of the provisions of this Act or the rules made thereunder.

 

(4)        For the purposes of this section or section 40, the audit of records includes audit of the tax affairs of the registered person under this Act and the rules.

 

CHAPTER VI

RETURNS

 

52.       Return.---(1) Every registered person shall furnish, not later than the due date, a true, correct and properly filled-up return in the prescribed form to a designated bank or any other office specified by the Authority, indicating the tax due and paid during a tax period and such other information or particulars as may be specified.

 

 

(2)        Notwithstanding anything contained in sub-section (1), the Authority may, by notification in the official Gazette, require any registered person or class of registered persons to submit returns on a quarterly, six monthly or annual basis in lieu of monthly return.

 

(3)           Notwithstanding anything contained in sub-section (1), the Authority may, by notification in the official Gazette, require any registered person to submit such returns, as may be prescribed, for any period in addition to other returns required to be filed by such person.

 

(4)        A return filed electronically on the web or any magnetic media or any other computer readable media as may be specified by the Authority shall be deemed to be a return for the purpose of sub-sections (1), (2) or (3) and the Authority may, by notification in the official Gazette, specify the criteria for eligibility of the data of such returns and e-intermediaries who shall digitize the data of such returns and transmit the same electronically under their digital signatures.

 

(5)        If there is a change in the rate of the 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 be furnished.

 

(6)        A registered person may, after prior permission from the Collector, file a revised return within six months of filing a return under sub-sections (1), (2) or (3), to correct any omission or wrong declaration made therein and to deposit any amount of the tax not paid or short paid.

 

53.       Special returns.---In addition to the return or returns specified under section 52, the Collector may require any person, whether registered or not, to furnish a return, whether on his own behalf or as an agent or trustee in the prescribed form and such person shall furnish the return not later than the date specified in this regard.

 

54.       Final return.---If a person applies for de-registration in terms of section 46, he shall before such deregistration, furnish a final return to the Authority or the Collector in the specified form in such manner and at such time as may be directed by the Authority or the Collector.

 

55.       Return deemed to have been made.---A return purporting to be made on behalf of a person by his duly appointed representative, agent or e-intermediary shall, for all purposes of this Act or the rules, be deemed to have been made by such person or under his authority unless proved to the contrary.

 

 

 

 

CHAPTER VII

APPOINTMENT OF OFFICERS AND THEIR POWERS

 

56.       Appointment of officers.---(1) For the purposes of this Act and the rules, the Authority may, in the prescribed manner and by notification in the official Gazette, appoint in relation to any area or cases specified in the notification, any person to be-

 

(a)        a Collector;

 

(b)        a Collector (Appeals);

 

(c)        an Additional Collector;

 

(d)       a Deputy Collector;

 

(e)        an Assistant Collector;

 

(f)        an Audit Officer;

 

(g)        an Inspector or

 

(h)        any other officer with any other designation.

 

 

[3][(2)    An officer appointed under sub-section (1), shall exercise such powers, pecuniary and territorial jurisdiction and discharge such duties as are conferred on him under this Act and the regulations made under this Act and shall also be empowered and competent to exercise all powers and discharge all duties or functions conferred upon any officer subordinate to him.]

 

[4][(3)    The Authority may, by general or special order impose such limitation, restriction or conditions on the exercise of such powers and discharge of such duties or functions as it may deem fit.]

 

[5][56-A            Distribution of Powers.---(1) The Authority may, by Notification and subject to such limitations or conditions, as may be specified therein, empower by name or designation-

 

(a)       an Additional Collector to exercise any of the powers of the Collector (Appeals) till the regular appointment of Collector (Appeal) as specified in section 79 of this Act;

(b)       an Additional Collector to exercise or perform any of the power or function of the Collector;

 

(c)       a Deputy Collector to exercise or perform any of the powers or function of the Additional Collector;

 

(d)       an Assistant Collector to exercise or perform any of the powers or function of the Deputy Collector; and

 

(e)       any other officer to exercise or perform any of the powers or function of the Assistant Collector.

 

(2)       The officer to whom any powers are delegated under this section shall not further delegate such powers.

 

(3)       The officer designated or empowered as Collector (Appeals) shall not hear and decide the cases adjudicated by him in terms of section 56 of this Act.]

 

57.       Special Judges.---(1) Government may, in consultation with High Court, by notification in the official Gazette, appoint any person who is serving or has served as District and Sessions Judge for a period of at least five years as Special Judge and, where it appoints more than one Special Judge, it shall specify in the notification the headquarters of each Special Judge and the territorial limits within which he shall exercise jurisdiction under this Act and the rules.

 

(2)        If a Special Judge is, for any reasons, unable to perform his duties under this Act or the rules, the District and Sessions Judge of the District shall perform the duties of the Special Judge for the District.

 

58.       Cognizance of offence.---(1) The Special Judge may, within the limits of his jurisdiction, take cognizance of any offence punishable by him upon-

 

(a)        a report in writing made by an officer, not below the rank of Assistant Collector, with the approval of the Collector, or by an officer especially authorized in this behalf by the Authority;

(b)        receiving a complaint or information of facts constituting such offence made or communicated by any person; or

 

(c)        his knowledge acquired during any proceedings before him.

 

(2)        If the Special Judge receives a report under clause (a) of sub-section (1), he shall proceed with the trial of the accused.

(3)        If the Special Judge receives a complaint or information under clause (b) of sub-section (1), on the basis of his own knowledge, the Special Judge shall, before issuing a summon or warrant for appearance of the person, hold a preliminary inquiry for the purpose of ascertaining the truth or falsehood of the complaint, information or knowledge or direct any Magistrate or any officer to hold such inquiry and submit a report, and such Magistrate or officer, shall conduct such inquiry and make a report accordingly.

 

(4)        If, after conducting such an inquiry or after considering the report of such Magistrate or officer, the Special Judge is of the opinion that-

 

(a)        there  is  insufficient  ground  for  proceeding,  he  may  dismiss  the complaint, or

 

(b)        there is sufficient ground for proceeding, he may proceed against the person complained  in accordance with law.

 

(5)        A Special Judge or a Magistrate or an officer holding an inquiry under sub-section (3) may hold such inquiry, as nearly as possible, in accordance with the provisions of section 202 of the Code of Criminal Procedure, 1898 (V of 1898).

 

59.       Application of the Code of Criminal Procedure, 1898.---(1) The provisions of the Code of Criminal Procedure, 1898 (V of 1898), so far as they are not inconsistent with the provisions of this Act, shall apply to all proceedings of the court of a Special Judge and such court shall be deemed to be a Court of Sessions for the purposes of the said Code and the provisions of Chapter XXII-A of the Code, so far as applicable and with necessary modifications, shall apply to the trial of cases by the Special Judge under this Act.

 

(2)        For the purposes of sub-section (1), the Code of Criminal Procedure, 1898 (V of 1898) shall have effect as if an offence punishable under this Act was one of the offences referred to in sub-section (1) of section 337 of the Code.

 

60.       Exclusive jurisdiction of Special Judge.---No court other than the Special Judge having jurisdiction  shall try an offence punishable under this Act.

 

 

61.       Place of sitting.---A Special Judge shall ordinarily hold sittings at his headquarters provided that keeping in view the general convenience of the parties or the witnesses, he may hold sittings at any other place.

 

62.       Persons who may conduct prosecution.---(1) An officer not below the rank of an Assistant Collector shall be competent to conduct prosecution before a Special Judge for and on behalf of the Government.

 

(2)        A prosecution conducted under this Act before the Special Judge may only be withdrawn by the Authority on the direction or after concurrence of the Government.

 

63.       Appeal to the High Court.---(1) Any person, including the Government, the Authority , or any officer of the Authority, aggrieved by any order passed or decision made by a Special Judge under this Act or under the Code of Criminal Procedure , 1898 (V of 1898),may, subject to the provisions of Chapters XXXI and XXXII of the said Code, within sixty days from the date of the order of the decision, prefer an appeal to the High Court.

 

(2)        Except as otherwise provided in sub-section (1), the provisions of the Limitation Act, 1908 (V of 1908), shall apply to an appeal preferred under sub-section (1).

 

CHAPTER VIII

OFFENCES AND PENALTIES

 

64.       Offences and penalties.---(1) If a person commits any offence described in column 2 of the Table below shall, in addition to and not in derogation of any punishment to which he may be liable under any other law, be liable to the penalty mentioned against that offence in column 3.

 

(2)        The sections referred to in column 4 of the said Table shall be deemed to be meant for illustrative purposes only and the corresponding offence described in column 2 may fall and be prosecuted under other sections of this Act as well.

 

S. No.

Offences

Penalties

Section

1

2

3

4

1

Any person who is required to apply for registration under this Act fails to make an  application  for  registration  before providing any taxable services.

 

Such person shall be liable to pay a penalty of ten thousand rupees or five per cent of the amount of the tax he would have been liable to pay had he been registered, whichever is higher.

In   the   case   of   non-compliance   of compulsory  registration, the minimum penalty shall be ten thousand rupees:

If such person who is required to get himself registered under this Act, fails to get registered within ninety days of providing taxable services, he shall be further liable, upon conviction by a Special Judge, to imprisonment for a term which may extend to one year, or with fine which may extend to the amount of the tax he would have been
liable to pay had he been registered, or with both.

 

41

2

Where  any  person  fails  to  furnish  a return  within the due date  or furnishes it after the due date.

 

 

 

 

 

Such person shall be liable to pay a penalty of five thousand rupees provided if a return is not filed within fifteen days of the due date, a penalty of hundred rupees for each day of default shall be levied.

 

52

3

Where a person fails to issue tax invoice.           

Such person shall be liable to pay a penalty of five thousand rupees or three per cent of the tax   involved, whichever is    higher.                    

 

47

4

Where any person fails to deposit the amount of  the  tax  due  or  any  part thereof in time or manner laid down under this Act or the rules.

 

(a)  Such person shall be liable to pay a penalty of ten thousand rupees or five per cent of the tax payable      for that period, whichever is higher.

(b)  If the amount of the tax due is not paid even after the expiry of a period of sixty days of issuance of the notice for such payment by an officer, not below the  rank  of  Assistant  Collector,  the  person shall be further liable, upon conviction by a Special Judge,  to  imprisonment  for  a  term  which  may extend to three years, or with fine which may extend to the amount of the unpaid tax, or with both.

(c)  No penalty shall be levied if any miscalculation is made for the first time during a year.

 

19, 20, 26, 27,

33, 34 and 88

5

Any person   who   fails to   maintain records required under this Act or the
rules.

 

Such person shall pay a penalty of ten thousand rupees or five per cent of the total tax payable for the tax period for which he has failed to maintain the required record, whichever is higher.

 

47, 48 and 49

6

Where a registered person , without

any    reasonable cause, fails to,;  

 

(a)         Produce any  record which he is bound to maintain under this Act or the rules made  thereunder,-or

(b)            Furnish any information which he is liable to furnish under this Act or the rules made there under, When a notice in the respect is received   from the Authority or any officer of the Authority directing him to produce such records or furnish such information.

 

 

 

 

 

Where such a person is a company, it shall be liable to pay a penalty of ten thousand rupees.

Where such person is not a company, he shall be liable to pay a penalty of five thousand rupees.

Where such person fails to produce the record within sixty days of receipt of a notice, he shall be liable to pay the penalty prescribed for the offence at serial No.5 above.

 

 

 

 

 

 

 

 

 

 

 

 

 

47, 49, 69 and 73

 

 

 

 

 

7

Any   person   who   knowingly   or fraudulently-

 

(a)  submits a false or forged document to any officer of the Authority; or

 

(b)  destroys, alters, mutilates or  falsifies  the records including a tax invoice; or

 

(c)  makes a false statement, false  declaration, false representation, false personification, or gives any false information.

 

 

Such person shall be liable to pay a penalty of twenty five thousand rupees or one hundred per cent of the tax payable for the tax period to which the offence relates, whichever is higher.

Such person shall further be liable, upon conviction by a Special Judge, to imprisonment for a term which may extend to five years or with fine which may extend to an amount equal to the tax payable for the tax period to which the offence relates, or with both.

 

General

 

8

Where   any   person   who   denies   or obstructs the access of an authorized officer   to   the   business   premises,  registered office or to any other place
where records are kept, or otherwise  refuses access to accounts or records.

 

Such person shall be liable to pay a penalty of twenty five thousand rupees or one hundred per cent of the tax payable for the tax period to which the offence relates, whichever is higher.

Such persons shall, further be liable, upon conviction by a Special Judge, to imprisonment for a term which may extend to five years, or with a fine which may extend to an amount equal to the tax payable for the tax period to which the offence relates, or with both.

 

48, 49 and 72

 

9

Where any person commits, causes to commit  or  attempts  to  commit  tax fraud,  or  abets  or  connives  in  the  commission   of   tax   fraud   equal   to twenty five thousand rupees or more.

 

Such person shall be liable to pay a penalty of up to five hundred thousand rupees, but not less than twenty five thousand rupees, or one hundred per cent of the tax payable for the tax period to which the offence relates, whichever is higher.

 

Such person shall, further be liable, upon conviction by a Special Judge, to imprisonment for a term which may extend to seven years, or with fine which may extend to an amount equal to the tax payable for the tax period to which the offence relates, or with both.

 

2(53)

 

10

Where any person violates any embargo placed   on   providing   of   service   in connection with recovery of the tax.

 

Such person shall be liable to pay a penalty of twenty five thousand rupees or ten per cent of the amount of the tax sought to be recovered, whichever is higher.

Such person shall, further be liable, upon conviction by a Special Judge, to imprisonment for a term which may extend to one year, or with fine which may extend to amount equal to the amount of the tax sought to be recovered, or with both.

 

87

 

11

Where any person obstructs any officer of the Authority in the performance of
his official duties under this Act or the
rules.

 

Such person shall be liable to pay a penalty of twenty five thousand rupees or one hundred per cent of the tax payable for the tax period to which the offence relates, whichever is higher.

Such person shall be further liable, upon conviction by a Special Judge, to imprisonment for a term which may extend to one year or with fine not exceeding fifty thousand rupees or with both.

 

General

12

Where any person who fails to fulfill any of   the   conditions,   limitations   or restrictions prescribed in a notification issued under any of the provisions of this Actor the rules.

 

Such person shall be liable to pay a penalty of five thousand rupees or three per cent of the tax payable for the tax period to which the offence relates, whichever is higher.

 

General

13

Where any person who contravenes any provision of this Act or the rules for which no penalty has specifically been provided in this section.

 

Such person shall be liable to pay a penalty of ten thousand rupees or three per cent of the tax payable for the tax period to which the offence relates, whichever is higher.

 

General

14

Where any person repeats an offence

for which a penalty is provided under this Act

Such person shall be liable to pay twice the amount of penalty provided under this Act for the said offence.

 

General

15

Where any person-

(a)  knowingly   and   without   lawful
authority gains access to or attempts to gain access to the computerized system; or

(b)  unauthorizedly uses or discloses or
publishes or otherwise disseminates

information   obtained   from   the computerized system; or

(c)  falsifies any record or information
stored in the computerized system; or

(d)  knowingly or dishonestly damages

or   impairs   the   computerized system; or

(e) knowingly or dishonestly damages  or impairs any duplicate tape or disc or other medium on which any information   obtained   from   the computerized  system  is  kept  or stored; or

(f)  unauthorizedly  uses  unique  user identifier of any other registered user to authenticate a transmission of information to the computerized system; or

(g) fails to comply with or contravenes  any of the conditions prescribed for security of unique user identifier.

 

 

Such person shall pay a penalty of twenty five thousand rupees or one hundred per cent of the amount equal to the loss caused to the tax revenue.

Such person shall further be liable, upon conviction by the Special Judge, to imprisonment for a term which may extend to three years, or with fine which may extend to an amount equal to the loss caused to the tax revenue, or with both.

 

General

16

Where any officer of the Authority Acts or conducts himself in a manner resulting in vexatious prosecution or undue detriment of a tax payer.         

Such person shall be liable upon conviction by special Judge to imprisonment for a term which may extend to three years or with fine not exceeding fifty thousand rupees or both.  

General

 

65.       Default surcharge.---(1) Notwithstanding  anything contained in the provisions of section 40, if a registered person does not pay the tax due or any part thereof, whether willfully or otherwise, on time or in the manner specified under this Act, rules or notifications or procedures issued thereunder, he shall, in addition to the tax due and any penalty under section 64, pay default surcharge at the rate mentioned below:

 

(a)        the person liable to pay any amount of tax or charge shall pay default surcharge at the rate of inter-bank rate plus three per cent per annum of the amount of the tax due; and

 

(b)        in case, the default is on account of tax fraud, the person who has committed tax fraud shall pay default surcharge at the rate of two per cent per month, of the amount of tax evaded, till such time the entire liability including the amount of default surcharge is paid.

 

(2)        For the purpose of calculation of default surcharge, the period of default shall be reckoned from the sixteenth day following the due date of the tax period to which the default relates, to the day preceding the date on which the tax due is actually paid.

 

Explanation: For the purpose of this section, the tax due does not include the amount of penalty.

 

66.       Exemption from penalty and default surcharge.---(1) The Government may, by a notification in the official Gazette, exempt any registered person or any taxable service from payment of the whole or any part of the penalty and default surcharge subject to such conditions and limitations as may be specified.

 

            (2)        The Government at the end of each financial year shall lay before the Council all the notifications made under sub section (1).

 

67.       Compounding of offences.---Notwithstanding anything contained in any other provision of this Act, where any person has committed any offence warranting prosecution under this Act, the Authority may, either before or after the institution of any proceedings for the prosecution of such offence, compound the offence and terminate the proceedings if such person pays the amount of the tax due along with such default surcharge and penalty as is determined by the Authority under the provisions of this Act and the rules.

 

68.       Recovery of tax not levied or short-levied.---(1) Where by reason of inadvertence, error, misconstruction or for any other reason, any tax or charge has not been levied or has been short levied, the person liable to pay such amount of the tax or charge shall be served with a notice, within three years of the relevant tax period requiring him to show cause for nonpayment of the amount specified in the notice.

 

(2)        Where by reason of some collusion, abetment, deliberate attempt, mis-statement, fraud, forgery, false or fake documents-

 

(a)        any tax or charge has not been paid or is, short paid, the person liable to pay such tax shall be served with  a notice within five years of relevant tax period, requiring him to show cause for non-payment of such tax; and

 

(b)        any amount of the tax is refunded which is not due, the person obtaining such refund shall be served with a notice within five years of the receipt of such refund to show cause against the recovery of such refund.

 

(3)        The officer shall, after considering the objections of the person served with a notice under subsections (1) or (2) or if the objections are not received within the stipulated period, determine the amount of the tax or charge payable by him and such person shall pay the amount so determined.

 

(4)        Any order under sub-section (3) shall be made within one hundred and twenty days of issuance of the notice to show cause or within such extended period as the officer may, for reasons to be recorded in writing, fix provided that such extended period shall not ordinarily exceed sixty days.

 

(5)        In computing the period specified in sub-section (4), any period during which the proceedings are adjourned on account of a stay order or proceedings under section 89 or the time taken through adjournments by the petitioner not exceeding thirty days, shall be excluded.

 

69.       Power to summon persons to give evidence and produce documents.---(1) An officer may summon any person whose attendance he considers necessary either to tender evidence or to produce documents or any other thing in any audit, inquiry, investigation or proceedings which such officer is making for any of the purposes of this Act and the rules.

 

(2)        Any person summoned under sub-section (1) shall be bound to attend either in person or by an authorized agent, as the officer may direct.

 

(3)        Notwithstanding anything contained in sub-sections (1) and(2), a person who is exempt from personal appearance in a Court under sections 132 and 133 of the Code of Civil Procedure 1908 (V of 1908), shall not be required to appear in person.

 

(4)        Any proceedings under this Act or the rules before an officer shall be deemed to be judicial proceedings within the meaning of sections 193 and 228 of the Pakistan Penal Code 1860 (XLV of 1860).

 

70.       Power to arrest and prosecute.---(1) An officer authorized by the Authority by notification in the official Gazette in this behalf, who on the basis of material evidence has reasonable cause to believe that any person has committed a tax fraud or any offence warranting prosecution under this Act, may cause arrest of such person.

 

(2)        All arrests made under this Act shall be carried out in accordance with the relevant provisions of the Code of Criminal Procedure, 1898 (V of 1898).

(3)        Where the person suspected of tax fraud or any offence warranting prosecution under this Act is a company, every director or officer of that company whom the officer has reason to believe is personally responsible for actions of the company contributing to the tax fraud or any offence warranting prosecution under this Act, shall be liable to arrest provided that such arrest shall not absolve the company from the liabilities of payment of the tax, default surcharge and any penalty imposed or due under this Act.

 

71.       Procedure to be followed on arrest of a person.---(1) When an officer arrests a person under section 60, he shall immediately intimate the fact of arrest of that person to the Special Judge who may direct such officer to produce that person at such time and place and on such date as the Special Judge considers expedient.

 

(2)        Notwithstanding anything contained in sub-section (1), any person arrested under this Act shall be produced before the Special Judge or, if there is no Special Judge within a reasonable distance, to the nearest Magistrate within twenty-four hours of such arrest, excluding the time necessary for the journey from the place of arrest to the court of the Special Judge or of the Magistrate.

 

(3)        When any person is produced under sub-section (2), before the Special Judge, the Special Judge may, on the request of such person, after perusing the record, if any and after giving the prosecution an opportunity of being heard, admit him to bail on his executing a bond, with or without sureties, or refuse to admit him to bail and direct his detention at such place as he deems fit.

 

(4)        Nothing contained herein shall preclude the Special Judge from cancelling the bail of any such person at a subsequent stage if, for any reason, he considers such cancellation necessary, but before passing such order he shall afford such person an opportunity of being heard, unless for reasons to be recorded he considers that the affording of such opportunity shall defeat the purpose of this Act.

 

(5)        When such person is produced under sub-section (2) before a Magistrate, such Magistrate may, after authorizing his detention in such custody at such place and for such period as he considers necessary or proper for facilitating his earliest production before the Special Judge, direct his production before the Special Judge on a date and time to be fixed by him or direct such person to be forthwith taken to, and produced before the Special Judge and he shall be so taken or produced.

 

(6)        Nothing in sub-sections (2), (3) and (4), shall preclude the Special Judge or the Magistrate from remanding any such person to the custody of the officer holding an inquiry or investigation against that person if such officer makes a request in writing to that effect, and the Special Judge or the Magistrate, after perusing the record, if any, and hearing such person, is of the opinion that for the completion of inquiry or investigation it is necessary to make such order but the total period of such custody shall not exceed fourteen days.

 

(7)        When any person is arrested under this Act, the arresting officer shall record the fact of arrest and other relevant particulars in the register specified in sub-section (11) and shall immediately proceed to inquire into the charge against such person and if he completes the inquiry within twenty-four hours of his arrest, and he may, after producing such person before the Special Judge or the Magistrate, make a request for his further detention in his custody.

 

(8)        While holding an inquiry under sub-section (7), the officer shall exercise the same powers as are conferred upon or exercisable by an officer incharge of a police station under the Code of Criminal Procedure, 1898 (V of 1898), but such officer shall exercise such powers subject to the foregoing provisions of this section while holding an inquiry under this Act.

 

(9)        If the officer, after holding an inquiry, is of the opinion that there is no sufficient evidence or reasonable ground for suspicion against such person, he shall release him on his executing a bond, with or without sureties, and shall direct such person to appear, as and when required, before the Special Judge, and make a report to the Special Judge for the discharge of such person and shall make a full report of the case to his immediate superior.

 

(10)      The Special Judge to whom a report has been made under sub-section (8) may, after the perusal of record of the inquiry, and hearing the prosecution, agree with such report and discharge the accused or, if he is of the opinion that there is sufficient ground for proceedings against such person, proceed with his trial and direct the prosecution to produce evidence.

 

(11)      The officer holding an inquiry under this section shall maintain a register to be called register of arrests and detentions in the form prescribed by the Government in which he shall enter the name and other particulars of every person arrested under this Act, together with the time and date of arrest, the details of the information received, the details of things, goods or documents, recovered from his custody, the name of the witnesses and the explanation, if any, given by him and the manner in which the inquiry has been conducted from day to day; and, such register or authenticated copies of its entries shall be produced before the Special Judge, whenever it is directed by the Special Judge.

 

(12)      After completing the inquiry, the officer shall, as early as possible, submit to the Special Judge a complaint in the same form and manner in which the officer incharge of a police station submits a report before a Court.

 

(13)      Any Magistrate of the first class may record any statement or confession during inquiry or investigations under this Act in accordance with the provisions of section 164 of the Code of Criminal Procedure, 1898 (V of 1898).

 

72.       Authorized officers to have access to premises, stocks, accounts and records.---(1) Any officer, authorized in this behalf by the Authority by notification in the official Gazette, shall have free and full access to the business premises, registered office or any other place where any business records or documents required under this Act and the rules are kept or maintained by any registered person or a person liable for registration or whose business activities are covered under this Act and the rules or who may be required for any inquiry or investigation in any tax fraud committed by him or his agent or any other person; and such officer may, at any time, inspect the records, data, documents, correspondence, accounts, statements, utility bills, bank statements, information regarding nature and sources of funds or assets with which his business is financed, and any other records or documents, including those which are required under any other law maintained in any form or mode and may take into his custody such records, statements, diskettes or documents, in original or copies, in such form as the officer may deem fit against a signed receipt.

 

(2)        The registered person, his agent or any other person specified in sub-section (1), shall answer any question or furnish such information or explanation as may be asked by the authorized officer.

 

(3)        All other Government departments, local bodies, autonomous bodies, corporations or such other institutions shall supply requisite information and render necessary assistance to the authorized officer in the course of inquiry or investigation under this section.

 

73.       Obligation to produce documents and provide information.---(1) Notwithstanding anything contained in this Act or any other law, any person required to maintain any record under this Act and the rules, shall, on demand by an officer, not below the rank of an Assistant Collector, by notice in writing, as and when specified in the notice-

 

(a)        produce for examination, such documents or records which the officer considers necessary or relevant to the audit, inquiry or investigation under this Act;

 

(b)        allow the officer to take extracts from or make copies of such documents or records; and

 

(c)        appear before the officer and answer any question put to him concerning the documents and records relating to the audit, inquiry or investigation referred to in clause (a).

 

 

(2)        An officer conducting an audit, inquiry or an investigation under this Act and the rules, may require in writing any person, department, company or organization to furnish such information as is held by that person, department, company or organization, which, in the opinion of the officer, is relevant to such audit, inquiry or investigation.

 

(3)        The Authority may require, in writing, any person, department, company or   organization, to provide any information or data held by that person, department, company or organization, which, in the opinion of the Authority, is required for purposes of formulation of policy or administering or implementing this Act and the rules.

 

(4)        Every person, department, company or organization shall furnish the information requisitioned by the Authority or the officer under sub-sections (2) or (3), within the time specified in the notice issued by the Authority.

 

74.       Searches under warrants.---(1) Where any officer has reason to believe that any documents or things which in his opinion, may be useful for, or relevant to, any proceedings under this Act are kept in any place, he may after obtaining a warrant from the Magistrate or from the Collector, enter that place and cause a search to be made at any time.

 

(2)        All searches made under sub-section (1) shall be carried out in accordance with the relevant provisions of the Code of Criminal Procedure, 1898 (V of 1898).

 

75.       Posting of an officer to business premises.- (1) Subject to such conditions and restrictions as it deems fit to impose, the Authority may post an officer to the premises of a registered person to monitor the provision of services by such registered person.

 

(2)        Notwithstanding anything contained in sub-section (1), if a Collector, on the basis of material evidence, has reasons to believe that a registered person is involved in evasion of the tax or tax fraud, he may, by recording the grounds in writing, post an officer of the Authority to the premises of such registered person to monitor provision of services by such person.

 

(3)        A person to whose premises, an officer of the Authority is posted under this section, shall provide at his own cost, all facilities required to meet the departmental requirements of such posting as determined by the Authority or the Collector.

 

76.       Powers of adjudication.---(1) In respect of cases involving determination of tax liability, assessment of the tax, charging of default surcharge, imposition of penalty and recovery of amount erroneously refunded or any other contravention or violation including tax fraud under this Act or the rules, the jurisdiction and powers of adjudication of the officers shall be as follows:

 

(a)        Additional Collector: Cases without any restriction as to the amount of the tax involved or amount erroneously refunded;

 

(b)        Deputy Collector: Cases where the amount of the tax involved or the amount erroneously refunded exceeds one million rupees, but does not exceed two and a half million rupees;

 

(c)        Assistant Collector: Cases where the amount of the tax involved or the amount erroneously refunded does not exceed one million rupees; and

 

(d)       Other officers of the Authority: Such cases, other than those mentioned above, as may be prescribed.

 

(2)        The Collector may adjudicate any case falling in the jurisdiction and powers of any officer subordinate to him and appeal against the order passed by the Collector in such case shall lie to the Appellate Tribunal.

 

(3)        The Authority may regulate the system of adjudication including transfer of cases and extension of time limit.

 

Explanation: For the purposes of this section, the tax means the principal amount of the tax other than default surcharge and in case where only default surcharge is involved, the amount of default surcharge.

 

77.       Revision by the Collector.---(1) The Collector may, of his own motion or on an application made in writing by a registered person for revision, call for and examine the record of any proceedings under this Act in which an order has been passed by an officer subordinate to him.

 

(2)        If after examining the record under sub-section (1), the Collector is not satisfied with the legality or propriety of any order passed by an officer, the Collector may pass such order as he may think fit.

 

(3)        No order imposing or enhancing any penalty or fine requiring payment of a greater amount of the tax than the originally levied amount shall be passed unless the person affected by such order has been given an opportunity of showing cause and of being heard.

 

 

(4)        The Collector shall not revise any order under sub-section (2) if-

 

(a)        an appeal under section 80 is pending or the matter has been referred for resolution under section 89;

 

(b)        where an appeal against the order lies under section 79, the time within which such appeal may be made has not expired or the person has not waived of in writing his right of appeal;

(c)        in the case of an application made by a person, the application has not been made within ninety days of  the date on which such order was served on the person, unless the Collector is satisfied that the person was prevented by sufficient cause from making the application within the time allowed; and

 

(d)       in the case where the Collector has on his own motion called for and examined an order passed by a subordinate officer, more than five years have lapsed from the date of the original order.

 

(5)        No application for revision of an assessment shall be made under sub-section (1) unless the amount of the tax due under the assessment that is not in dispute has been paid by the taxpayer.

 

78.       Revision by the Authority.---(1) The Authority may, of its own motion, call for and examine the record of any departmental proceedings under this Act or the rules for the purpose of satisfying itself as to the legality or propriety of any decision or order passed therein by an officer, other  than Collector (Appeal).

 

(2)        If after examining the record under sub-section (1), the Authority is not satisfied with the legality or propriety of any decision or order passed by an officer, it may pass such order as it may think fit.

 

(3)        No order imposing or enhancing any penalty, fine or requiring payment of a greater amount of the tax than the originally levied amount shall be passed unless the person affected by such order has been given an opportunity of showing cause and of being heard.

 

(4)        No proceeding under this section shall be initiated in a case where an appeal under section 79 is pending or the matter has been referred for resolution under section 89.

 

(5)        No order shall be made under this section after the expiry of five years from the date of the original decision or order of the subordinate officer referred to in sub-section (1).

CHAPTER IX

APPEALS

 

79.       Appeals.---(1) Any person, other than the Authority or any of its employees, aggrieved by any decision or order passed under section 76 by an officer of the Authority other than Collector may, within thirty days of the date of receipt of such decision or order, prefer an appeal to the Collector (Appeals).

(2)        An appeal under sub-section (1) shall-

 

(a)        be in the prescribed form;

(b)        be verified in the prescribed manner;

(c)        state precisely the grounds upon which the appeal is made;

(d)       be accompanied by the fee specified in sub-section (3); and

(e)        be lodged with the Collector (Appeals) within the time set out in sub-section (1).

 

(3)        The prescribed fee shall be-

 

(a)        where the appellant is a company, one thousand rupees; or

 

(b)        where the appellant is not a company, five hundred rupees.

 

(4)        The Collector (Appeals) may, upon application in writing by the appellant, admit an appeal after the expiration of the period specified in sub-section (1) if the Collector (Appeals) is satisfied that the appellant was prevented by sufficient cause from lodging the appeal within that period.

 

80.       Procedure in appeal.---(1) The Collector (Appeals) shall give notice of the day fixed for the hearing of the appeal to the appellant and to the officer of the Authority against whose order the appeal has been made.

 

(2)        The Collector (Appeals) may adjourn the hearing of the appeal from time to time.

 

(3)        The Collector (Appeals) may, before the hearing of an appeal, allow the appellant to file any new ground of appeal not specified in the grounds of appeal already filed by the appellant where the Collector (Appeals) is satisfied that the omission of the ground from memorandum of the appeal was not willful or unreasonable.

 

(4)        The Collector (Appeals) may stay the recovery of any tax due by virtue of the decision or order being appealed against and any such order made by the Collector (Appeals) shall remain operative for not more than fifteen days during which period a notice shall be issued to the respondent and after hearing the parties, the order staying recovery may be confirmed, varied or vacated as the Collector (Appeals) deems fit but the stay order so confirmed or varied shall remain operative for not more than sixty days, including any period for which the recovery may have been stayed prior to the confirmation or variation of the stay order.

 

(5)        The  Collector (Appeals)  may,  before  disposing  of  an  appeal,  call  for  such  particulars, documents, records or information as the Collector (Appeals) may require respecting the matters arising in the appeal or cause further inquiry to be made by the officer of the Authority.

81.       Decision in appeal.----(1) In disposing of an appeal lodged under section 79, the Collector (Appeals) may pass such order as he thinks fit, confirming, varying, altering, setting aside or annulling the decision or order appealed against.

 

(2)        In deciding an appeal, the Collector (Appeals) may make such further inquiry as may be necessary provided that he shall in no case remand any matter for de novo consideration.

 

(3)        The Collector (Appeals) shall not increase the amount of any tax payable by the appellant unless the appellant has been given an opportunity of showing cause against such increase.

 

(4)        The Collector (Appeals) shall communicate his order to the appellant and the Authority.

 

(5)        An order passed by the Collector (Appeals) under sub-section (1) shall be passed not later than one hundred and twenty days from the date of filing of appeal or within such extended period, not exceeding sixty days, as the Collector (Appeals) may, for reasons to be recorded in writing, fix.

 

(6)        In computing the aforesaid time period, any period during which the proceedings are adjourned on account of a stay order or proceedings under section 89 or the time taken through adjournments by the appellant shall be excluded.

 

(7)        Where the Collector (Appeals) has not made an order under sub-section (1) before the expiration of one hundred and eighty days from the end of the month in which the appeal was lodged, the Collector (Appeals) shall transfer his appeal to the Appellate Tribunal and the Tribunal shall decide the appeal under this Act as if it has been filed against the order of the Collector (Appeals).

 

(8)        While transferring the undecided appeal to the Appellate Tribunal, the Collector (Appeals)shall attach his comprehensive report explaining the circumstances and reasons due to which the appeal could not be decided within time.

 

(9)        For the purpose of sub-section (5), any period during which the hearing of an appeal is adjourned on the request of the appellant shall be excluded in the computation of the period mentioned in the sub-section.

 

CHAPTER X

APPELLATE TRIBUNAL

 

82.       Appellate Tribunal.---(1) The Appellate Tribunal shall consist of such number of judicial and technical members as the Government may, from time to time, determine.

 

(2)        The Government shall appoint judicial members of the Appellate Tribunal from amongst the District and Sessions Judges in consultation with Peshawar High Court, Peshawar.

 

(3)        A person may be appointed as a technical member of the Appellate Tribunal if he is

 

(a)        a Collector(Appeals) in the Authority or the Federal Board of Revenue having at least two years experience in that capacity; or

 

(b)        a Collector in the Authority or the Federal Board of Revenue, other than the Collector mentioned at(a), having at least three years experience as Collector of the Authority or the Federal Board of Revenue; or

 

(c)        an officer of Excise and Taxation Department of the Government with at least three years service inBS-20 or above; and

 

(d)       less than fifty-seven years of age.

 

(4)        The Government shall designate the senior most judicial member of the Appellate Tribunal as its Chairperson.

 

83.       Conduct of business by Appellate Tribunal.---(1) The Appellate Tribunal may exercise its powers and discharge its functions in the prescribed manner in such Benches as the Chairperson may constitute from amongst the members of the Appellate Tribunal.

 

(2)        Subject to the provisions of section 84, the Appellate Tribunal shall have the power to regulate its own procedure, and the procedure of the Benches of the Appellate Tribunal in all matters relating to the discharge of its functions including the places at which the Benches shall hold their sittings.

 

84.       Appeal to the Appellate Tribunal.---(1) Where the taxpayer or the officer not below the rank of Additional Collector objects to any order passed by the Collector (Appeals), including an order under sub-section (4) of section 79 [6][and order passed by the Collector or Authority under any of the provisions of this Act], the taxpayer or the officer may appeal to the Appellate Tribunal against such order.

 

(2)        An appeal under sub-section (1) shall be-

 

(a)        in the prescribed form;

 

(b)        verified in the prescribed manner;

 

(c)        accompanied, except in case of an appeal preferred by an officer, by the fee specified in sub-section (3); and

 

(d)       preferred to the Appellate Tribunal within sixty days of the date of receipt of the order of the Collector (Appeals) by the tax payer or the officer.

 

(3)        The fee for an appeal shall be three thousand rupees.

 

(4)        The Appellate Tribunal may, upon application in writing, admit an appeal after the expiration of the period specified in clause (d) of sub-section (2) if it is satisfied that the person appealing was prevented by sufficient cause from filing the appeal within that period.

 

85.       Disposal of appeals by the Appellate Tribunal.---(1) The Appellate Tribunal may, before disposing of an appeal, call for such particulars, documents, records or information as it may require in respect of the matters arising from the appeal or cause further inquiry to be made by any officer of the Authority.

 

(2)        The Appellate Tribunal shall afford an opportunity of being heard to the parties to the appeal and, in case of default by any of the parties on the date of hearing, the Tribunal may, if it deems fit, dismiss the appeal in default, or may proceed ex-parte to decide the appeal on the basis of the available record but the Appellate Tribunal shall decide the appeal within six months from the date of filing of the appeal.

 

(3)        The Appellate Tribunal may stay the recovery of any tax due by virtue of the decision or order being appealed against and any such order made by the Appellate Tribunal shall remain operative for no more than thirty days during which period a notice shall be issued to the respondent and after hearing the parties, the order staying recovery may be confirmed, varied or vacated as the Appellate Tribunal deems fit but the stay order so confirmed or varied shall remain operative for not more than six months including any period for which the recovery may have been stayed prior to the confirmation or variation of the stay order.

 

(4)        In deciding the appeal, the Appellate Tribunal may, without prejudice to the powers specified in sub-section (2), make an order to-

 

 

(a)        affirm, modify or annul the order being appealed against; or

 

(b)        remand the case to the officer or the Collector (Appeals) for making such inquiry or taking such action as the Tribunal may direct.

 

(5)        The Appellate Tribunal shall communicate its order to the taxpayer and the Collector.

 

(6)        Save as provided in any other law, the decision of the Appellate Tribunal on an appeal shall be final.

 

86.       Reference to the High Court.–(1) A reference to the High Court shall lie only if a question of law is involved in a case.

 

(2)        Any person or the Authority may, within sixty days from the date of communication of the final order of the Appellate Tribunal, prefer a reference in the prescribed form alongwith a statement of the facts of the case and the question of law involved in the case.

 

(3)        The High Court may dismiss a reference inlimine if it is satisfied that the reference does not contain any question of law for determination.

 

(4)        The reference under this section shall be heard by a Bench of at least two Judges of the High Court and the provisions of section 98 of the Code of Civil Procedure 1908 (Act No. V of 1908) shall, as far as possible, apply to such reference.

 

(5)        The High Court shall send a copy of the judgment under the seal of the Court to the Appellate Tribunal.

 

(6)        Notwithstanding that a reference has been filed in the High Court, the tax shall be paid in accordance with the order of the Appellate Tribunal.

 

(7)        If the tax liability is reduced by the High Court and the Authority decides to seek leave to appeal to the Supreme Court, the Authority may, within thirty days of the receipt of the judgment of the Court, apply to the High Court to postpone the refund until the decision by the Supreme Court.

 

(8)        Section 5 of the Limitation Act 1908 (IXof1908) shall apply to a reference under sub-section (1).

 

 

 

(9)        A court fee of rupees one thousand shall be affixed on a reference under this section except when it is filed by the Authority.


 

CHAPTER XI

RECOVERY OF ARREARS

 

87.       Recovery of arrears of tax.---(1) Subject to sub-section (2), where any amount of the tax is due from any person, an Officer of the Authority not below the rank of assistant Collector may-

 

(a)        deduct the amount from any money owing to the person from whom such amount is recoverable and which may be at the disposal or in the control of such officer or any officer of the Authority;

 

(b)        require by a notice in writing any person who holds or may subsequently hold any money for or on account of the person from whom tax is recoverable to pay to such officer the amount specified in the notice;

           

(c)        require by a notice in writing any bank to attach that person’s bank accounts and remit in money  there from;

 

(d)       place embargo on any business premises of such person till such amount is paid or received;

 

(e)        seal the person’s business premises till such time as the amount of the tax is paid or recovered in full;

 

(f)        attach and sell or sell without attachment any movable or immovable property of the person from whom the tax is due; and

 

(g)        recover such amount by attachment and sale of any movable or immovable property of the guarantor, person,  company, bank or financial institution where a guarantor or any other person, company, bank or financial institution fails to make payment under such guarantee, bond or instrument.

 

(2)        If any arrears of tax, default surcharge, penalty or any other amount which is payable by any person cannot be recovered in any manner whatsoever, the Authority or the Collector,  if so authorized by the Authority, may, for reasons to be recorded in writing, write off the arrears or amount in the prescribed manner.

 

 

88.       Deposit of the tax demand while appeal is pending.---Where in any appeal, the decision or order appealed against relates to any tax demanded under this Act, the person who has filed the appeal shall, pending the appeal, deposit the amount of the tax admitted by the tax payer based on the return filed under section 52 or as may be determined by the Collector (Appeals) or the Appellate Tribunal where such return has not been filed.

 

89.       Alternative dispute resolution.---(1) Notwithstanding any other provisions of this Act or the rules, any registered person aggrieved in connection with any dispute pertaining to-

 

(a)        the liability of the tax against the registered person;

 

(b)        the extent of waiver of default surcharge and penalty; and

 

(c)        relaxation of any procedural or technical irregularities and condonation of any prescribed limitation of time; and

 

(d)       any other specific relief required to resolve the dispute, may apply to the Authority for the appointment of a committee for the resolution of any dispute,  to be mentioned in detail in the application.

 

(2)        Notwithstanding anything contained in sub-section (1), the Authority shall not accept an application under sub-section (1) where criminal proceedings have been initiated or where the Authority is of the opinion that the interpretation of a question of law having a larger impact on revenue or on a number of similar cases is involved.

 

(3)           The Authority may, after examination of the application of a registered person, appoint a committee of not less than three persons within thirty days of receipt of such application, consisting of an officer of the Authority not below the rank of an Additional Collector and nominees from a notified panel to be notified by the Authority from time to time consisting of chartered or cost accountants, advocates, representatives of trade bodies or associations, retired officers of the rank of not less than BS-20, retired judges, or any other reputable taxpayers, for the resolution of the dispute.

 

(4)        The committee constituted under sub-section (3) shall examine the issue and may, if it deems fit, conduct an inquiry, seek expert opinions, direct any officer of the Authority or any other person to conduct an audit and shall make recommendations to the Authority within ninety days of its constitution in respect of the dispute.

 

(5)     If the committee fails to make recommendations within the said period, the Authority may dissolve the committee and constitute a new committee which shall decide the matter within a further period of ninety days and even if after the expiry of that period the dispute is not resolved, the matter shall be taken up before the appropriate forum provided under this Act for decision.

 

(6)        The Authority may, on the recommendation of the committee, pass such order, as it may deem appropriate within forty-five days of the receipt of the recommendations of the committee.

 

(7)        The registered person may make payment of the tax as determined by the Authority in its order under sub-section (6), and such order of the Authority shall be submitted before the forum, Appellate Tribunal or the Court where the matter is pending adjudication for consideration of orders as deemed appropriate.

CHAPTER XII

AGENTS, REPRESENTATIVES AND E-INTERMEDIARIES

 

90.       Agent.---(1) For the purpose of this Act and subject to sub-sections (2) and (3), the expression ‘agent’ in respect of a registered person, means-

 

(a)        where the person is an individual under a legal disability, the guardian or manager who receives or is entitled  to receive income, financial gains or benefits, funds, money or property on behalf, or for the benefit of, the individual;

 

(b)        where the person is a company other than a Trust, a Provincial Government, or local authority in Pakistan, a director or a manager or secretary or accountant or any similar officer of the company;

(c)        where the person is a Trust declared by a duly executed instrument in writing, whether testamentary or otherwise, any trustee of the trust;

 

(d)       where the person is Federal Government, a Provincial Government, or local authority in Pakistan, any individual responsible for accounting for the receipt and payment of money or funds on behalf of the Federal, Provincial Government or the local authority;

 

(e)        where the person is an association of persons, a director or a manager or secretary or accountant or any similar officer of the association or, in the case of a firm, any partner in the firm;

 

(f)        where the person is a public international organization, or a foreign government or political sub-division of a foreign government, any individual responsible for accounting for the receipt and payment of moneys or funds in Pakistan on behalf of the organization, government, or political subdivision of the government;

 

(2)        Where Court of Wards, Administrator General, Official Trustee, or any receiver or manager appointed by, or under any order of a Court receives or is entitled to receive income on behalf, or for the benefit of any person, such Court of Wards, Administrator General, Official Trustee, receiver or manager shall be the agent of the person for the purpose of this Act.

 

(3)        Notwithstanding anything contained in this section, any registered person may expressly or impliedly authorize another person to be his agent for all or any of the purposes this Act.

 

91.       Liability and obligations of agents.---(1) Every agent of a person shall be responsible for performing any duties or obligations imposed by or under this Act and the rules, on such person, including the payment of the tax.

 

(2)        Subject to sub-section (5), the tax that by virtue of sub-section (1), is payable by an agent of a registered person shall be recoverable from the agent only to the extent of assets of the registered person that are in the possession or under the control of the agent.

 

(3)        Every agent of a registered person who pays any tax owing to the registered person shall be entitled to recover the amount so paid from the registered person or to retain the amount so paid out of any moneys of the registered person that are in the agent’s possession or under the agent’s control.

 

(4)        Any agent, or any person who apprehends that he may be assessed as an agent, may retain out of any money payable by him to the person on whose behalf he is liable to pay the tax  a sum equal to his estimated liability under this Act, and in the event of disagreement between the principal and such an agent or a person as to the amount to be so retained, such an agent or person may obtain from the Collector a certificate in manners specified by the Authority, stating the amount to be so retained pending final determination of the tax liability and the certificate so obtained shall be his conclusive authority for retaining that amount.

 

(5)        Every agent shall be personally liable for the payment of any tax recoverable from the registered person if, while the amount remains unpaid, the agent-

 

(a)        alienates, charges or disposes of any moneys received or accrued in respect of which the tax is payable; or

 

(b)        disposes of or parts with any moneys or funds belonging to the registered person that is in possession of the agent or which comes to the agent after the tax is payable, if such tax could legally have been paid from or out of such moneys or funds.

 

(6)        Nothing in this section shall relieve any person from performing any duties imposed by or under this Act on the person which the agent of the person has failed to perform.

 

(7)        A registered person shall be responsible for any and all acts done by his agent.

 

92.       Appearance by authorized representative.---A registered person required to appear before the Appellate Tribunal or an officer in connection with any proceedings under this Act may, in writing, authorize any person having such qualification as may be prescribed by the Authority, to represent him or appear on his behalf.

 

93.       E-intermediaries to be appointed.---(1) Subject to such conditions, limitations and restrictions as the Authority may specify, the Authority may, by a notification in the official Gazette, notify a person as e-intermediary to electronically file returns and other electronic documents under this Act and the rules, on behalf of a registered person.

 

(2)        A registered person may authorize in writing an e-intermediary to electronically file returns or any other documents on his behalf as specified in sub-section (1).

 

(3)        The return or such other documents filed by an e-intermediary on behalf of a registered person shall be deemed to have been filed by that registered person.

 

(4)        Where this Act requires anything to be done by a registered person and if such thing is done by an e-intermediary authorized by the registered person under sub-section (2), unless the contrary is proved, such thing shall be deemed to have been done with the knowledge and consent of the registered person so that in any proceedings under this Act, the registered person shall be liable as if the thing has been done by him.

 

(5)        Where an e-intermediary, authorized by a registered person under sub-section (2) to act on his behalf, knowingly or willfully submits false or incorrect information or document or declaration with an intent to avoid payment of the tax due or any part thereof, such e-intermediary shall be jointly and severally responsible for recovery of the amount of tax short paid as a result of such incorrect or false information or document or declaration, without prejudice to any other action that may be taken against him or the registered person under the relevant provisions of the law.

 

(6)        The Authority may, by notification in the official Gazette, prescribe rules for the conduct and transaction of business of e-intermediaries, including their appointment, suspension and cancellation of appointment, subject to such conditions and restrictions as specified in such rules.

 

Part IV

Infrastructure Development Cess

 

94.       Levy of cess for special maintenance and development of infrastructure.---(1) Notwithstanding anything contained in [7][this Act or any other law or rules, for the time being in force] or judgment, order or decree of any Court, there shall be levied and collected by the [8][Excise and Taxation Department of Government], a cess for special maintenance and development of  infrastructure for smooth and safer movement of goods entering or leaving the Province from or for outside country, through land, air or sea at the rates and in the manner as may be prescribed.

           

Explanation : For the purpose of this section, the word “infrastructure” includes roads, streets , bridges, culverts, lights on passage, beaches, public parks, place of public recreation and convince, eating places, landscape, forests, fisheries, delta conservation, lakes breeding  places of aquatic  life, wildlife and its sanctuaries, public schools, vocational and technical training centers and projects, libraries, museums and similar institutions controlled  and financed y the Province, control of traffic for smooth flow and after movement of goods,  public order, police force, patrol for safety of  goods, stands for loading and unloading of goods, parking places, markets, water supply, hospitals and dispensaries and development, improvement, maintenance and protection of such matters.

 

(2)        The proceeds of the cess shall be deposited in the Provincial Consolidated fund and to be utilized by the Provincial Government for general maintenance and development of infrastructure and other activities ancillary thereto in such manner as may be prescribed.

 

[9][(3)     The Government may, by notification in official Gazette, exempt any goods from levy of the Cess under this section, subject to such conditions, limitation or restrictions as it may specify in the said notification:

 

Provided that all such notifications issued during a financial year shall be laid before the Provincial Assembly at the time of presenting finance bill.]

 

PART V

Chapter - I

GENERAL ADMINISTRATION

 

95.       Computerized system.---(1) The Authority may prescribe the use or cause to use of a computerized system for carrying out the purposes of this Act and the rules including the receipt of applications for registration, returns and such other declarations or information required to be provided under this Act and the rules from such date and for such registered persons or class of persons as the Authority may, by notification in the official Gazette, specify.

 

(2)        The Authority may regulate the conduct and transaction of business in relation to the submission of returns or other information to the Authority by the persons required to transmit or receive any information through the computerized system, including matters such as the grant of authorization, suspension and cancellation of authorization and for security of the information transmitted or received through the computerized system.

 

(3)        Unless otherwise provided, the information received in the computerized system from or on behalf of any registered person shall, for all official and legal purposes, be deemed to have been furnished by and received from such registered person.

 

(4)        The business information gathered through computerized system shall be confidential to be used only for official and legal purposes and no unauthorized person shall claim or be provided any access to such information.

 

96.       Service of orders and decisions.---(1) Subject to this Act, any notice, order or requisition required to be served on an individual for the purposes of this Act shall be treated as properly served on the individual if-

 

(a)        personally served on the individual or, in the case of an individual under a legal disability, the agent of the individual;

 

(b)        sent by registered post or courier service to the individual’s usual or last known address in Pakistan; or

 

(c)        served on the individual in the manner prescribed for service of a summons under the Code of Civil Procedure, 1908 (V of 1908).

 

(2)        Subject to this Act, any notice order or requisition required to be served on any person, other than an individual to whom sub-section (1) applies, for the purposes of this Act, shall be treated as properly served on the person if-

 

(a)        personally served on the agent of the person;

 

(b)        sent by registered post or courier service to the person’s registered office or address for service of notices under this Act in Pakistan or where the person does not have such office or address, the notice is sent by registered post to any office or place of business of the person in Pakistan; or

 

(c)        served in the manner prescribed for service of a summons under the Code of Civil Procedure, 1908 (V of 1908).

 

(3)        Where an association of persons is dissolved, any notice, order or requisition required to be served under this Act, on the association or a member of the association, may be served on any person who was the principal officer or a member of the association immediately before such dissolution.

 

(4)        Where a business stands discontinued, any notice, order or requisition required to be served under this Act, on the person discontinuing the business, may be served on the person personally or on any individual who was the person’s agent at the time of discontinuance.

 

(5)        The validity of any notice issued under this Act or the validity of any service of a notice shall not be called into question after the notice has been complied with, in any manner.

 

(6)        Any registered person may indicate, in the manner prescribed by the Authority, that he wishes to electronically receive all or specific communications, including notifications, orders, assessments and requisitions from the Authority, the Appellate Tribunal or any officer of the Authority.

 

(7)        The Authority may, by notification in the official Gazette, direct that all or specific communications, including notifications, orders, assessments and requisitions from the Authority, the Appellate Tribunal or any officer to a specific registered person or class of registered persons shall be made electronically.

 

(8)         For purposes of sub-sections (6) and (7), a registered person shall be considered to have received the electronic communication within seventy two hours of the sending of the electronic communication by the Authority, Appellate Tribunal or the officer of the Authority.

 

(9)         For purposes of sub-sections (6), (7) and (8), an electronic communication includes a communication sent by email.

 

97.       Issuance of duplicate of the tax documents.---An officer of the Authority not below the rank of the Assistant Collector may, on payment of one hundred rupees, issue an attested copy of any document filed by a registered person with the Authority.

 

98.       Computation of limitation period.---In computing the period of limitation prescribed for any appeal or application under this Act, the day on which the order complained of was served and, if the concerned person was not furnished with a copy of the order, the time requisite for obtaining a copy of such order shall be excluded.

 

99.       Condonation of time-limit.---(1) Where any time or period has been specified under any of the provisions of this Act or the rules within which any act or thing, including submission of an application, filing of a return or payment of tax, is to be done, the Authority may permit such application to be made or such act or thing to be done within such time or period as it may consider appropriate.

 

(2)        The Authority shall not condone a time limitation which results in increase of any tax payable, penalty or default surcharge levied unless the tax payer has been given a reasonable opportunity of being heard. 

 

(3)             The Authority may, by notification in the official Gazette, and subject to such limitations or conditions as may be specified therein, empower any Collector or an officer of the Authority to exercise the powers under sub section (2) in any case or class of cases.

 

100.     Correction of clerical errors.---(1) Any clerical or arithmetical error in any assessment, adjudication order or decision  may, at any time, be corrected by the officer of the Authority who made the assessment or adjudication or passed such order or decision by his successor in office, through an order made under this section.

 

(2)        Before any correction is made under sub-section (1), a notice shall be given to the registered person likely to be affected by such correction.

 

101.     Deposit of Taxes collected.---Subject to the provisions contained in the fiscal law, collections whereof is assigned to the Authority, the Authority shall deposit all the proceeds from the tax, so collected, in the Provincial Consolidated Fund or the Public Account, as the case may be.

 

102.     Research and Development.–--The Authority may, conduct or cause to be conducted such studies researches and surveys as it may deem necessary to broaden the tax-base, widen tax coverage under any fiscal law, facilitate tax payer and to assess the feasibility of any fiscal effort of the Government.

 

103. Annual report.---(1) The Authority shall, within three months of the close of a financial year, submit to the Government an annual report.

 

 

(2)        The report shall consist of

 

(a)        the statement of accounts;

 

(b)        a comprehensive statement of the work, activities, target achievement and performance of the Authority during the preceding financial year; and

 

(c)        such other matters as may be prescribed and as the Authority may consider appropriate.

 

(3)        The Government shall, within two months of receiving the report from the Authority, give notice for laying there port in the Provincial Assembly of the Khyber Pakhtunkhwa, and shall lay the report before the Assembly in its first available session.

 

(4)        The Government may also require the Authority to submit monthly reports in the prescribed form in respect of recovery targets and matter incidental thereto.

 

104.     Officers of the Authority to follow orders.---(1) All officers of the Authority and other persons employed in the administration of this Act and the rules shall observe and follow the orders, instructions and directions of the Authority.

 

(2)        No such orders, instructions or directions shall be given so as to interfere with the powers or discretion of officers of the Authority in the exercise of their judicial or quasi-judicial functions.

 

105.     Representation.--–(1) Any person aggrieved by any action or decision taken for the enforcement of the any fiscal law other than the sales tax on services or by any act of maladministration, corruption and misconduct by any employee of the Authority or by any unnecessary delay or hardship caused due to any administrative process may file a representation to the Director General.

 

(2)        The Director General or any other officer designated by the Director General shall, after affording an opportunity of hearing to the parties, make such order as may be necessary in the interest of justice and inform the applicant accordingly.

CHAPTER II

MISCELLANEOUS

 

106.     Directions from the Government.---Government may, from time to time, give such general or specific directions to the Authority, as may be necessary for the efficient performance of its functions and achieving the objectives of the Act and the Authority shall implement such directions.

107.     Delegation by the Government.---(1) Government may delegate any of its powers to the Authority on such terms and conditions as the Government may determine.

 

(2)        Government may, by notification, assign or delegate to the Authority any powers or functions under any fiscal law.

 

108.     Delegation by the Authority.---The Authority may, with the concurrence of the Council, delegate any of its functions and powers to any of it employees or any department, agency or employee of the Government.

 

109.     Power to issue orders, instructions and directions.---The Authority may issue such orders, instructions and directions, not inconsistent with this Act and the rules, to all officers of the Authority, as it may deem necessary to implement, administer or enforce the provisions of this Act and the rules.

 

110.     Assistance to the Authority.---All departments, agencies, organizations, entities, formations and bodies of the  Federal or Provincial Governments shall, on request, be under obligation to extend necessary and due cooperation and assistance to the Authority in the performance of its functions under this Act, rules or regulations.

 

111.     Bar of suits, prosecution and other legal proceedings.---(1) No suit shall be brought in any civil court to set aside or modify any order passed, any assessment made, any tax levied, any penalty or default surcharge imposed or collection of any tax made under this Act.

 

(2)        No suit, prosecution or other legal proceeding shall lie against the Government, Authority, its officers or against any public servant in respect of any order passed in good faith under this Act.

 

(3)        Notwithstanding anything contained in any other law, no investigation or inquiry shall be undertaken or initiated by any government agency against any officer or official for anything done in his official capacity under this Act, except with the permission of the Authority.

 

112.     Act to override other laws.---The provisions of this Act shall have effect notwithstanding anything to the contrary contained in any other law.

 

113.     Power to make rules.---(1) Government may, by notification in the official Gazette, make rules for carrying out the purposes of the provisions of this Act.

 

(2)        The rules made under this Act shall be collected, arranged and published along with general orders and departmental instructions, directions, notifications and rulings, if any, at appropriate intervals and sold to the public at a reasonable price.

 

[10][114  power to make regulations,-Except where any specific provision is provided under this Act which requires the approval of the Council, the Authority may, make regulations or specify procedures, not inconsistent with the rules, to give effect to the purposes of this Act.]

 

115.     Removal of difficulties.---(1) Government may pass such orders for removing any difficulty or for bringing the provisions of this Act into effective operation and may direct that the provisions of this Act shall, during such period as may be specified in the order, have effect subject to such adaptations whether by way of modification or addition or omission as it may deem to be necessary or expedient.

 

(2)        The power under this section shall not be exercised after the expiry of five years from the commencement of this Act.

 

116.     Continuance in Force.---(1) All orders made, proceeding taken and acts done by the Federal Board of Revenue which were in force and in effect before the commencement of this Act, shall continue in force unless modified pursuant to any provision of this Act or the rules and regulations made hereunder.

 

(2)        All existing rules, regulations, procedure, notification, statutory rules and orders including statutory regulatory orders  and orders in effect or adopted in by the Federal Board of Revenue shall continue to be in force unless they are inconsistent with any provision of this Act and shall to continue to be in force until rescinded, altered, revised or amended by the competent authority under the provision of this Act or rules made here under.

 

(3)        Subject to the provision to this Act, reference to Federal Board of Revenue, wherever occurring in any law or the rules, regulations orders statutory rules including statutory regulatory orders or notifications etc, for the time being in force in respect of Sales Tax on Services shall be read is reference to the Authority.   

 

117.     Repeal and savings.---(1) The Khyber Pakhtunkhwa Sales Tax Ordinance, 2000 (Ord. III of 2000) is hereby repealed.

 

(2)        Any proceeding under the repealed Ordinance pending on the date notified under sub-section (3) of section 1 before any authority, forum or any court by way of  adjudication, assessment, appeal, reference, revision or prosecution shall be continued and disposed of as if this Act has not come into force.

 

(3)        Where the Government or the Authority takes any action, makes any decision or orders, issues any instructions, directions, clarifications or notifications in pursuance of or in exercise of powers conferred by any provision of any law in respect of any matter relating to the tax and allied issues covered under this Act or the rules, such actions, decisions, orders, instructions, directions, clarifications rules, regulation and notifications shall be deemed to have been validly issued to serve the purposes of this Act and the rules.

 

(4)        Where so directed by the Government, any tax payable but not paid under the Khyber Pakhtunkhwa Sales Tax Ordinance, 2000 (Ord. III of 2000) may be recovered under this Act, but without prejudice to any action already taken for the recovery of the amount under the said Ordinance.

 

PART –VI

Amendment of West Pakistan Urban Immovable

Property Tax Act, 1958.

 

118.     Amendment of W.P. Act No. V of 1958.---In the West Pakistan Urban Immovable Property Tax Act, 1958 (W.P. Act No. V of 1958), in section 4, for sub-section (2), the following shall be substituted, namely:

 

            “(2)      Notwithstanding anything to the contrary contained in section 3, there shall not be levied and charged any tax under this Act, in relation to buildings and lands occupied by industrial units in any area declared
by Government as “Industrial Estates”, for a period of five years with effect from 1st day of July, 2013.”.


FIRST SCHEDULE

(Classification of Services)

(see sub-section (47) of section 2)

 

Classification Description

 

(1)                                (2)

 

98.01               Services provided by hotels, restaurants, marriage halls, lawns, clubs and caterers.

 

9801.1000       Services provided by hotels

 

9801.2000       Services provided by restaurants

 

9801.3000       Services provided by marriage halls and lawns

 

9801.4000       Services provided by clubs

 

9801.5000       Services provided by caterers, suppliers of food and drinks

 

9801.6000       Ancillary services provided by hotels, restaurants, marriage halls, lawns, caterers

 

9801.7000       Services provided by messes and hostels

 

9801.9000       Other

 

98.02               Advertisements

 

9802.1000       Advertisements on T.V.

 

9802.2000       Advertisements on radio

 

9802.3000       Advertisements on closed circuit T.V.

 

9802.4000       Advertisements in newspapers and periodicals

 

9802.5000       Advertisements on cable T.V. network

 

Advertisements on poles

 

Advertisements on bill boards

 

[11][9802.6000

Advertisements on poles.

 

9802.7000

 

Advertisements on billboards.

 

9802.8000

 

Sale of Space for Advertisement services.]

 

9802.9000       Other

 

[12][9802.9010

TV, Radio & Production Services.

 

9802.9020

Broadcasting Services.]

 

 

98.03               Facilities for travel

 

9803.1000       Travel by air of passengers within the territorial jurisdiction of Pakistan

 

9803.1100       Travel by air of passengers embarking on international journey from Pakistan

 

9803.2000       Domestic travel by train

 

9803.2100       International travel by train

 

[13][9803.3000 Facilities for travel by road]

 

9803.9000       Others

 

98.04               Services provided for inland carriage of goods.

 

9804.1000       Carriage of goods by air

 

9804.2000       Carriage of goods by train

 

[14][9804.3000 cargo services by road

 

9804.9000       Other

 

98.05               Services provided by persons authorized to transact business on behalf of others.

9805.1000       Shipping agents

 

9805.2000       Stevedores

 

9805.2100       Ship management service

 

9805.3000       Freight forwarding agents

 

9805.4000       Customs agents

 

9805.5000       Travel agents

 

9805.5100       Tour operators

 

9805.6000       Recruiting agents

 

9805.7000       Advertising agents

 

9805.8000       Ship chandlers

 

9805.9000       Share transfer agent

 

9805.9100       Sponsorship services

 

9805.9200       Business support services

 

9805.9090       Other

 

98.06               Services provided in matters of hire.

 

9806.1000       Purchase or sale of moveable or immovable goods or property

 

9806.2000       Property dealers

 

9806.3000       Car/automobiles dealers

 

9806.9000       Dealers of second hand goods other than automobiles other

 

9807.0000       Services provided by property developers and promoters.

 

9808.0000       Courier services

 

9809.0000       Services provided by persons engaged in contractual execution of work or furnishing supplies.

 

9810.0000       Services provided for personal care by beauty parlors/clinics, slimming clinics and others.

 

9811.0000       Services provided by laundries, dry cleaners.

 

 

98.12               Telecommunication services.

 

9812.1000       Telephone services

 

9812.1100       Fixed line voice telephone service

 

9812.1200       Wireless telephone

 

9812.1210       Cellular telephone

 

9812.1220       Wireless Local Loop telephone

 

9812.1300       Video telephone

 

9812.1400       Payphone cards

 

9812.1500       Prepaid calling cards

 

9812.1600       Voice mail service

 

9812.1700       Messaging service

 

9812.1710       Short Message service (SMS)

 

9812.1720       Multimedia message service (MMS)

 

9812.1910       Shifting of telephone connection

 

9812.1920       Installation of telephone extension

 

9812.1930       Provision of telephone extension

 

9812.1940       Changing of telephone connection

 

9812.1950       Conversion of NWD connection to non NWD or vice versa

 

9812.1960       Cost of telephone set

 

9812.1970       Restoration of telephone connection

9812.1990       Others

 

9812.2000       Bandwidth services

 

9812.2100       Copper line based

 

9812.2200       Fibre-optic based

 

9812.2300       Co-axial cable based

 

9812.2400       Microwave based

 

9812.2500       Satellite based

 

[15][9812.2600   Voice over I.P services

 

9812.2700       Teleconferencing services

 

9812.2800       3G/4G LTE services]

 

9812.2900       Others

 

9812.3000       Telegraph

 

9812.4000       Telex

 

9812.5000       Telefax

 

9812.5010       Store and forward fax services

 

9812.5090       Others

 

9812.6000       Internet services

 

9812.6100       Internet services including email services

 

9812.6110       Dial-up internet services

 

9812.6120       Broadband services for DSL connection

 

9812.6121       Copper line based

 

9812.6122       Fibre-optic based

9812.6123       Co-axial cable based

 

9812.6124       Wireless based

 

9812.6125       Satellite based

 

9812.6129       Others

 

9812.6130       Internet/email/Data/SMS/MMS services on WLL networks

 

9812.6140       Internet/email/Data/SMS/MMS services on cellular mobile networks

 

9812.6190       Others

 

9812.6200       Data Communication Network services (DCNS)

 

9812.6210       Copper Line based

 

9812.6220       Co-axial cable based

 

9812.6230       Fibre-optic based

 

9812.6240       Wireless/Radio based

 

9812.6250       Satellite based

 

9812.6290       Others

 

9812.6300       Value added data services

 

9812.6310       Virtual private Network services (VPN)

 

9812.6320       Digital Signature service

 

9812.6390       Others

 

9812.9000       Audio text services

 

9812.9100       Tele-text services

 

9812.9200       Trunk radio services

 

9812.9300       Paging services

 

9812.9400       Voice paging services

9812.9410       Radio paging services

 

9812.9490       Vehicle tracking services

 

9812.9500       Burglar alarm services

 

9812.9090       Others

 

98.13               Services provided by banking companies, insurance companies, cooperative financing societies modarbas, musharikas, leasing companies, foreign exchange dealers, non-banking financial institutions and other persons dealing in any such services.

 

9813.1000       Services provided in respect of insurance to a policy holder by an insurer, including a reinsure.

 

9813.1100       Goods insurance

 

9813.1200       Fire insurance

 

9813.1300       Theft insurance

 

9813.1400       Marine insurance

 

9813.1500       Life insurance

 

9813.1600       Other insurance

 

9813.2000       Services provided in respect of advances and loans

 

9813.3000       Services provided in respect of leasing

 

9813.3010       Financial leasing

 

9813.3020       Commodity or equipment leasing

 

9813.3030       Hire-purchase leasing

 

9813.3090       Other

 

9813.3900       Services provided in respect of musharika financing

 

9813.4000       Services provided by banking companies in relation to:

 

9813.4100       Guarantee

9813.4200       Brokerage

 

9813.4300       Letter of credit

 

9813.4400       Issuance of pay order and demand draft

 

9813.4500       Bill of exchange

 

9813.4600       Transfer of money including telegraphic transfer, mail transfer and electronic transfer

 


9813.4700       Bank guarantee

 

9813.4800       Bill discounting commission

 

9813.4900       Safe deposit lockers

 

9813.4910       Safe vaults

 

9813.5000       Issuance, processing and operation of credit and debit cards

 

9813.6000       Commission and brokerage of foreign exchange dealings

 

9813.7000       Automated Teller Machine operations, maintenance and management

 

9813.8000       Service provided as banker to an issue

 

9813.8100       Other

 

9813.9000       Service provided by a foreign exchange dealer or exchange company or money changer

 

98.14               Services provided by architects, town planners, contractors, property developers or promoters, interior decorators.

 

9814.1000       Architects or town planners

 

9814.2000       [16][Contracting services rendered by the contractors of buildings, electro-mechanical works, turn-key projects and similar other works, excluding individual house construction contracts.]

 

9814.3000       Property developers or promoters

 

9814.4000       Landscape designers

 

9814.9000       Other

 

98.15               Services provided by professionals and consultants etc.

9815.1000       Medical practitioners and consultants

 

9815.2000       Legal practitioners and consultants

 

9815.3000       Accountants and auditors

 

9815.4000       Management consultants

 

9815.5000       Technical, scientific, engineering consultants

 

9815.6000       Software or IT based system development consultants

 

[17][9815.7000

Cosmetic and Plastic Surgery Services.]

 

[18][9815.8000 Visa processing services including advisory or consultancy services for foreign education or for migration]

 

9815.9000       Other consultants

 

9816.0000       Services provided by pathological laboratories.

 

98.17               Services provided by medical diagnostic laboratories including X-Rays, CT Scan, M.R. Imaging etc.

 

9817.1000       Scientific laboratories

 

9817.2000       Mechanical laboratories

 

9817.3000       Chemical laboratories

 

9817.4000       Electrical or electronic laboratories

 

9817.9000       Other such laboratories

 

 

 

98.18               Services provided by specialized agencies.

 

9818.1000       Security agency

 

9818.2000       Credit rating agency

 

9818.3000       Market research agency

 

9818.9000       Other such agencies

 

98.19               Services provided by specified persons or businesses

 

9819.1000       Stockbrokers

 

9819.1100       Under writers

 

9819.1200       Indenters

 

9819.1300       Commission agents

 

9819.1400       Packers

 

9819.2000       Money exchanger

 

9819.3000       Rent a car

 

9819.4000       Prize bond dealers

 

9819.5000       Surveyors

 

9819.6000       Designers

 

9819.7000       Outdoor photographer

 

9819.8000       Art painter

 

[19][9819.8700

Video Tape and Production Services.]

 

9819.9000       Cable TV operators

 

9819.9100       Auctioneers

 

9819.9200       Public relations services

 

9819.9300       Management consultants

 

9819.9400       Technical testing and analysis service

 

9819.9500       Service provided by a registrar to an issue

 

[20][9819.9600

Copy Right Services.

 

9819.9800

 

Sound Record Service.]

9819.9090       Others

 

98.20               Services provided by specialized workshops or undertakings

 

9820.1000       Auto-workshops

 

9820.2000       Workshops for industrial machinery construction and earth-moving machinery or other special purpose machinery etc.

 

9820.3000       Workshops for electric or electronic equipments or appliances etc including computer hardware

 

9820.4000       Car washing or similar service stations

 

[21][9820.5000

Services provided by motor vehicle workshops, mechanic shops, air conditioning fitting service and cleaning centres.]

 

 

9820.9000       Other workshops

 

98.21               Services provided in specified fields.

 

9821.1000       Healthcare center, gyms or physical fitness center etc.

 

9821.2000       Indoor sports and games center

 

9821.3000       Baby care center

 

9821.4000       Body massage center

 

9821.5000       Pedicure center

 

98.22               Services provided for specified purposes.

9822.1000       Fumigation services

 

9822.2000       Maintenance or cleaning services

 

9822.3000       Janitorial services

 

9822.4000       Dredging or desilting services

 

9822.9000       Other similar services

 

9823.0000       Franchise services

 

9824.0000       Construction services

 

9825.0000       Consultancy services

 

9826.0000       Management services including fund and asset management services

 

9827.0000       Market research agencies

 

9828.0000       Program producers

 

9829.0000       Brokerage (other than stock) and indenting services

 

9830.0000       Race Clubs

 

9831.0000       General insurance agents

 

9832.0000       Exhibition or convention services

 

9833.0000       Data processing and provision of information, services of engineers, handling and storage of goods

 

9834.0000       Fashion designers

 

9835.0000       Cable operators

 

9836.0000       Internet café

 

9837.0000       Pandal and shamiana service

 

9838.0000       Airport services

 

9839.0000       Intellectual property services

 

9840.0000       Forward contract services

 

9841.0000       Packaging services

 

9842.0000       Services provided in matters of hire

 

9843.0000       Purchase or sale of moveable or immovable goods or property

 

9844.0000       Property dealers and realtors

 

9845.0000       Automobile dealers

 

9846.0000       Dealers of second hand goods other than automobiles

 

9847.0000       Cosmetic and plastic surgery

 

9848.0000       Beauty parlor and beauty clinics

 

9849.0000       HR consultants

 

9850.0000       Corporate law consultants

 

9851.0000       Tax consultants

 

9852.0000       Human resources & personnel development services

 

9853.0000       Coaching centers

 

9854.0000       Vocational centers

 

9855.0000       Actuarial services

 

9856.0000       Training services

 

9857.0000       Tracking services

 

9858.0000       Security alarm services

 

9859.0000       Human resource development

 

9860.0000       Building maintenance and service provider

 

9861.0000       Quality control services (ISO certification authority)

 

9862.0000       Services provided by motels, guest houses and farm houses.

9863.0000       Debt collection agencies

 

9864.0000       Amusement parks

 

9865.0000       Call centers

 

9866.0000       Film and drama studios including mobile stage shows or cinemas

 

9867.0000       Entertainment services

 

9868.0000       Services provided in respect of manufacturing or processing on toll basis.

 

[22][9869.0000

Container terminal services.

 

9870.0000

Manpower recruitment and labour supply services.

 

9871.0000

Port operating services.

 

9872.0000

Public Bonded Warehouse.

 

9873.0000

Services provided in respect of mining of minerals, oil and gas including related surveys and allied activities.

 

9874.0000

Event Management Services.]

 

[23][9875.0000   Electric power transmission or distribution services]

 

[24][9876.0000 Valuation services including competency and eligibility Testing services]


 

“SCHEDULE II”

[See Section 19]

 

S#

Description of Service

Rate of Tax

1.

[25][Services provided or rendered by hotels, restaurants marriage halls, pandals and shamiana services, lawns, caterers, motels, guest houses, by whatever name called, including any other services ancillary thereto.

 

Fifteen Percent (15%)]

2.

Services provided or rendered for personal care by beauty parlors, beauty clinics, [26][health care centres, health clubs, gyms, physical fitness centres, body massage centres and pedicure centres.

Fifteen percent (15%)]

3.

Services provided and rendered by laundries and dry cleaners.

[27][Fifteen percent (15%)]

4.

Telecommunication Services-

1.             Telephone services.

2.             Fixed line voice telephone service.

3.             Wireless telephone.

4.             Cellular telephone.