Federal Board of Revenue (Revenue Division) had issued Income Tax Notification dated August 12, 2020, whereby further amendments has been made in Income Tax Rules, 2002 (Rules) by inserting a new part “Part 1A” in Chapter IX, after Part I, of the Rules.
A paradigm shift has been introduced vide Finance Act, 2020 in case of advance tax on imports whereby focus has been shifted from person specific rates of taxation to goods specific rates. A new Twelfth Schedule has been introduced containing three parts whereby rates of 1%, 2% and 5.5.% has been prescribed in respect to goods falling in Part I, II and III respectively of the said Schedule.
Through the aforesaid newly inserted Part IA, rules has been prescribed for addition, omission or amendments of entries in the Twelfth Schedule and application of reduced rate on goods falling under Part III of the said schedule imported by persons as raw material for its ow use.
As per the Rules, a Committee on Imported Goods shall be formed who will be empowered to add, omit or amend any entry in the Twelfth Schedule.
Moreover, the newly added Part IA also provides Rules for applying and approval of exemption for non-deduction of tax under section 148 of the Ordinance or a reduced rate certificate. The Commissioner or an officer authorized by the Commissioner may at any time inspect goods, stocks or records to verify particulars submitted by the taxpayer at the time of applying for exemption or reduced rate certificate.
The self-explanatory notification is attached herewith for your information. Please contact in case any further clarification is required in this regard.
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