Sources told Business Recorder here on Monday that following Presidential assent of the Finance Bill 2017-18, the SROs approved by the ECC would get one-year extension up to June 30, 2018. These SROs issued by the FBR and duly approved by the ECC would expire on June 30, 2017. If the date of expiry of SROs has not been extended, the same would expire on June 30, 2017. In order to give protection to these decisions of the ECC in the form of SROs for another one year, the Finance Bill 2017-18 has made amendments to Customs Act 1969, Income Tax Ordinance 2001, Sales Tax Act, 1990 and Federal Excise Act, 2005. When the President would give his assent to the Finance Bill 2017-18, the said amendments would be enforced immediately and not from July 1, 2017, sources added.
A chartered accountant company said that the process of providing exemption and tax concessions in the Second Schedule is subject to the prescribed procedure. In the present circumstances such process requires the approval of the federal government, which as held by the Supreme Court of Pakistan could only be the Prime Minister and his Cabinet. Now, the process of exemptions and tax concessions can be initiated by the Federal Board of Revenue with the approval of the Minister In-charge subject to approval of Economic Co-ordination Committee. Consequently any notification issued from July 1, 2016 onwards is validated through this amendment up to June 30, 2018. Similar amendments have also been made in Customs, Sales Tax and Federal Excise Act.
Another tax expert said that presently, the federal government, pursuant to the approval of the Economic Co-ordination Committee of the Cabinet, is empowered to amend the Second Schedule to the Ordinance in order to provide or withdraw exemptions and tax concessions or to provide conditions in respect thereof. All such amendments made during the financial year are required to be placed before the National Assembly for ratification. However, in case such notification issued by the federal government is not ratified by the Parliament, it stands rescinded at the end of the financial year in which it was issued. Keeping in view the long drawn process of getting the exemptions legislated, the said powers of the federal government and the procedure thereof was criticised by different quarters. In order to address the concern, the Bill proposes to empower the FBR to grant exemptions and concessions subject to the approval of the Minister In-charge of the federal government. Such an amendment, in our view, will streamline the process of exemption and tax concession. Further, in relation to the time bound validity of the exemption issued by the federal government that have not received ratification from the Parliament, the Bill proposes to sanction their validity up till 30 June 2018, expert added.
The amendment to Custom''s Act 1969 said: "Provided that all such notifications, except those earlier rescinded, shall be deemed to have been in force with effect from first day of July 2016 and shall continue to be in force till June 30, 2018, if not earlier rescinded. Provided further that all notifications issued on or after first day of July, 2016 shall continue to be in force till June 30, 2018, if not earlier rescinded."
The amendments in the Sales Tax Act, 1990 said: Provided that all such notifications, except those earlier rescinded, shall be deemed to have been in force with effect from 1st July, 2016 and shall continue to be in force till June 30, 2018, if not earlier rescinded. Provided further that all notifications issued on or after first day of July, 2016 shall continue to be in force till June 30, 2018, if not earlier rescinded."
Amendment in Income Tax Ordinance 2001: Provided that all such notifications, except those earlier rescinded, shall be deemed to have been in force with effect from the first day of July 2016 and shall continue to be in force till the thirtieth day of June, 2018, if not earlier rescinded: Provided further that all notifications issued on the first day of July 2016 shall continue to be in force till June 30, 2018, if not earlier rescinded.
Amendments of the Federal Excise Act, 2005: Provided that all such notifications, except those earlier rescinded, shall be deemed to have been in force with effect from July 1, 2016 and shall continue to be in force till 30 June, 2018, if not earlier rescinded. Provided further that all notifications issued on or after 1st July 2016 shall continue to be in force till 30th June rescinded.
Copyright Business Recorder, 2017