INTRODUCTION

 

The President of Pakistan promulgated Tax Laws (Amendment) Ordinance 2019 on October 9, 2019.

 

COMMENTARY

 

  1. AMENDMENTS OF THE CUSTOM ACTS:

 

First Schedule, Chapter 99, sub-chapter V (Column 1, PCT Code 9917)

 

  1. Benefits of exemption also extended to “Gwadar International Terminals Limited and “Gwadar Marine Services Limited”.
  2. The benefit restricted to “the ships used in the port and its terminals” have been extended to “all visiting ships including foreign and local and fishing vessels at Gwadar Port”.
  • Likewise, imports by certain business activities like packaging, distribution, warehousing, warehousing, light end assembly and re assembly etc. and other similar or related business activities and such commercial activities as are required to support the Gwadar free zone Area shall also enjoy the exemptions for a period of 23 year with effect from 1st July 2016.

 

  1. AMENDMENTS OF THE SALES TAX ACT 1990

 

  1. Zero rating benefit in terms of Section 4 of the Sales Tax Act, 1990 is extended by adding certain entries at serial number 13 & 14 to “Fifth Schedule” with certain conditions.

 

  • Supplies of raw material, components and goods for further manufacture of goods in the Gwadar Free Zone and export thereof, provided that in case of supply to tariff area of Pakistan, tax shall be charged on the value assesses on the Goods Declaration for import.
  • Supplies of locally manufactured plant and machinery of certain specifications to manufacturers in the Gwadar Free Zone subject to the conditions, restrictions and procedure as given in the Ordinance.

 

  1. The scope of benefit of exemption available under serial number 100A of Sixth Schedule of Sales Tax, 1990 for the supply of Ship Bunker Oils bought and sold to ships calling on/visiting Gwadar Port has been restricted only to companies as mentioned in the said caluse.
  • A new serial number “100D” is inserted in “Sixth Schedule” to extend the benefit of exemption available under this Schedule to the Machinery, Equipment, Materials and goods imported for exclusive use in Gwadar Free Zone or for exports subject to conditions mentioned therein.

 

  1. AMENDMENTS OF THE INCOME TAX ORDINANCE 2001

 

  1. Exemption contained in Second Schedule, Part-I, Clause 126A on the income of certain persons has been extended to “Gwadar Free Zone”. The said exemption is on income for a period of 23 years starting from Feb 06, 2007.
  2. Likewise similar exemption contained in Clause 126AB of the said part of said Schedule on income from “profit on debt” has been extended to “China Overseas Ports Holding Company Pakistan (Private) Limited, Gwadar international Terminals Limited, Gwadar Marine Services limited and Gwadar Free Zone Company Limited. The said exemption is for 23 years starting from July 01, 2016.
  3. Similar exemption contained in Clause 126AC of the same Part and same Schedule on income of “contractors & sub-contractors” of certain persons has been extended to “Gwadar Free Zone” as well. This exemption is also for 23 years starting from July 01, 2016.

 

DOCUMENT LINK

20191099105536367TaxLawsOrdinance2019