S.R.O. 960(1)/2021 dated 2nd August, 2021

Insertion of New Rule 19H in the Income Tax Rules 2002


Federal Board of Revenue vide S.R.O. 960(1)/2021 dated 2nd August, 2021 inserted new Rule i.e.19H for the purposes of subsections (5), (6) and (7) of section 101 A:

Section 101A of the Income Tax Ordinance 2001 deals with “Gain on Disposal of assets outside Pakistan”.

Section 101A defines that any gain from the disposal or alienation outside Pakistan of an asset located in Pakistan of a non-resident company shall be Pakistan – Source and such gain shall be chargeable to tax.

Rule 19H applies for the purpose of Subsections (5), (6) and (7) of Section 101A to prescribe;

  1. Fair market value of the assets for the purposes of sub-section (5) of section 101A;
  • Determination of reasonable attribution of income of the nonresident in respect of assets located in Pakistan for the purposes of sub-section (6) of section 101A; and
  • Documents and statement for information required to be furnished to the Commissioner under sub-section (7) of section 101A.

Sub-Rule (2) of Rule 19H

For the purpose of Sub-Section (5) of Section 101A, the asset is “Share or Interest located in Pakistan” and Sub-Rule (2) of Rule 19H which differentiates the asset being traded on stock exchange or not and so it valuation technique and also defines valuation of interest of AOP which are summarized below. Further Sub-Rule (2) of Rule 19H overrides the provisions of Section 68 “Fair Market Value”.

Listed shares/securities-            Transaction value as recorded in stock exchange on the date of transaction (immediately preceding day value if shares were not traded on date of transaction)

Unlisted shares/securities-         By using following formula

                                                (A+B+C-D)F/F                         where

                                                A=        Book value of all assets other than component B

                                              B=          Fair value as determined under Section 68 of immovable property, jewellery, painting, drawing, postage stamp, coin or medallion, an antique etc.      

                                              C=          Fair market value of shares as computed under this sub rule.

                                              D=          Book value of all liabilities as shown on balance sheet excluding provisions, contingent liabilities, undeclared dividend, provision for taxation and capital and reserves.

                                              E=          Paid value of equity shares

                                              F=          Paid up equity share capital

Non equity unlisted shares-     Open market price

Interest by member of AOP    By using following formula

                                              A-B                  where

                                              A=          Capital contribution by member in AOP

                                              B=          share of member in the value of AOP as in excess of capital contribution

  • Value of AOP shall be computed in accordance with an internationally accepted valuation methodology.
  • if Commissioner is not satisfied with valuation, he may appoint an expert as is considered necessary for valuation.
  • If the transaction value if higher than the value as determined under this rule, than the value of share shall be taken as transaction value of shares. 

Sub-Rule (3) of Rule 19H

For the purpose of Sub-section (6) of section 101A, where entire assets of the non-resident company are not located in Pakistan, Sub-Rule 3 of Rule 19H defines to compute Income Attributable to Assets Located in Pakistan, by taking ratio of fair market value of assets located in Pakistan to fair value of all assets of the company as computed under these rules.

Sub-Rule (4) of Rule 19H

Sub-Rule (4) of the Rule 19H states for the purpose of Sub-Section (7) of the Section 101A, that whereby the taxpayer is required to furnish information or under these rules or transferor of the share or interest in the company or the entity fails to provide the information required, the commissioner may compute the gain in such manner as deems appropriate on the basis of whatever information available or obtained from any person or source.

Sub-Rule (5) of Rule 19H

Sub-Rule (5) of the Rule 19H states that every taxpayer, through which a non-resident company holds, directly or indirectly, assets, the value of which is derived, wholly or principally from the assets located in Pakistan and the non-resident company disposes of the asset, the taxpayer shall furnish to the Commissioner within sixty days of the transaction of disposal or alienation of the asset by the non-resident company, the information and documents as specified in Form A of Rule 19H.

Further states that where the said period of sixty days has already expired before coming into force of this rule, and the transaction has been made after first of July, 2018, the information and documents specified in Form A shall be furnished within thirty days of coming into force of this rule. (Form A is annexed with Rule 19H)

Sub-Rule (6) of Rule 19H

Sub-Rule (6) of the Rule 19H states that the provisions of Division IV of Part V of Chapter X and section 205 shall apply, mutatis mutandis, to the person required to deduct tax under sub-section (8) of section 101 A and company required to collect tax under sub-section (9) of section 101A.


Federal Board of Revenue issued Sales Tax General Order No.07 of 2021 dated 3rd August, 2021 to notify procedure for Licensing of Brand Name under Section 40E of Sales Tax Act. 1990 for Specified Sectors as mentioned in Rule 150ZF of Sales Tax Rules, 2006 (STR 2006);

Specified Sector Goods as per Rule 150ZF of STR 2006 are as follows: –

  • Tobacco Products;
  • Beverages;
  • Sugar;
  • Fertilizer;
  • Cement; and
  • Petroleum Products

This general order requires all existing and new manufacturers of above specified sectors to register their brand of each product with FBR before selling the same in the market as from the date of application of this general order No Manufacturer is allowed to sell their products in the market without having their brand registered with FBR (However, they may be allowed to sell the product from the date of application’s submission).

To register brand with FBR, every manufacturer will have to submit an application to the Project Director (Track and Trace System), FBR, along with the supportive documents. The application shall include all the details and operations regarding their business / activity as mentioned in Sub – Rule 3 (which are self-explanatory) or any other information / document as Project Director deemed necessary.

After the submission of application by manufacturer, Project Office, TTS shall review the application and schedule a mandatory hearing with the manufacturer within 7 working days of the receipt of application.

In case of any discrepancy found in application, Project Director shall issue a letter to the manufacturer about the missing / incomplete details. The Manufacturer will have to respond to the letter within a week to avoid cancellation of its application.

If all of the information and documents are complete and Project Director is satisfied, Project Director will forward the application along with its recommendations to Member (IR-Operations) for approval.

Member (IR-Operations) will notify Project Director regarding his decision on application which can be approved / rejected. Afterwards, Project Director shall issue Brand Registration Certificate to the manufacturer.

During the application process, if any information / document is found to be incorrect / fake, the registration process may be suspended immediately and manufacturer shall be issued a Show cause notice to stop all the activities related to the manufacturing and sale of the rejected / not approved brand.

If any un-registered brand’s product is found in the market, the IREN shall have the authority to confiscate all of the available stock in the market.