Commentary: Finance Act 2024

1. Q: What is the effective date for the amendments made in the Finance Act, 2024? A: The amendments made in the fiscal laws by the Finance Act, 2024, are effective from July 1, 2024, unless otherwise specified.
2. Q: What is the surcharge applicable for individuals and AOPs with taxable income exceeding Rs 10 million? A: For every individual and Association of Persons (AOP) with taxable income exceeding Rs 10 million, a surcharge at the rate of 10% of the income tax on their taxable income is payable.
3. Q: Are there any changes in the tax rates for salaried individuals proposed through the Finance Bill, 2024? A: There are no changes in the tax rates for salaried individuals as proposed through the Finance Bill, 2024.
4. Q: How is the surcharge on taxable income calculated for individuals earning Rs 12 million? A: For an individual earning Rs 12 million, the normal income tax is Rs 2,765,000, and a surcharge of 10% on the income tax, amounting to Rs 276,500, is also payable.
5. Q: Does the surcharge apply to incomes under the final tax regime or special tax rates? A: The surcharge does not apply to incomes falling within the purview of the final tax regime or for which special tax rates are prescribed, such as capital gains on listed securities and immovable properties.
6. Q: Is the surcharge applicable on super tax for taxpayers with income exceeding Rs 150 million? A: For taxpayers liable to pay super tax due to their income crossing Rs 150 million, the surcharge applies only to their normal income tax liability, not on the super tax amount.
7. Q: What changes were made to the tax rates for non-salaried individuals and AOPs in the Finance Bill, 2024? A: There are no changes in the tax rates for non-salaried individuals and AOPs proposed through the Finance Bill, except for professional firms, which had their maximum rate reduced from 45% to 40%.
8. Q: What is the impact of the Finance Bill changes on non-salaried individuals with an income of Rs 1,200,000? A: For non-salaried individuals with an income of Rs 1,200,000, the income tax for Tax Year 2024 is Rs 75,000 (6.25%), and for Tax Year 2025, it is Rs 90,000 (7.50%).
9. Q: How has the Finance Act, 2024, affected the taxation of exporters of goods? A: The Finance Act introduced a new provision in section 147 requiring specified withholding agents to collect 1% advance income tax from exporters of goods, replacing the collection of advance tax under section 154 proposed through the Finance Bill.
10. Q: What is the revised tax impact on exporters and other persons post-Finance Act, 2024? A: The revised tax impact on exporters is that they are now subject to a 1% advance income tax collected by banks, EPZA, or Exporters/Export houses at the time of realisation of export proceeds.
11. Q: What special tax regime is prescribed for builders and developers in the Finance Act, 2024? A: The Finance Act, 2024, prescribes a special tax regime for builders and developers, with taxable profits computed as 10% of gross receipts for construction and sale of buildings, 15% for development and sale of plots, and 12% for income derived from both activities.
12. Q: Are builders or developers established by an Act of Parliament covered by the special tax regime? A: No, builders or developers established by an Act of Parliament or Provincial Assembly, engaged in activities for the benefit of employees or providing housing and ancillary facilities, are not covered by this special tax regime.
13. Q: What changes were made regarding the issuance of exemption certificates by the Commissioner? A: The proposal to withdraw the Commissioner’s power to issue tax withholding exemption certificates was dropped, but for payments to resident and non-resident persons not subject to minimum tax, the power to issue exemption certificates remains restricted.
14. Q: How has the Finance Act addressed the minimum tax on Special Economic Zone entities? A: The Finance Act re-inserted a specific clause exempting Special Economic Zone entities from the minimum tax regime based on turnover, clarifying their exemption status.
15. Q: What amendments were made to the treatment of sales promotion, advertisement, and publicity expenditure? A: The disallowance of 25% of sales promotion, advertisement, and publicity expenditure is now restricted to cases where the taxpayer fails to substantiate that no benefit has accrued to the associate owning specified intangibles.
16. Q: What is the reduced CGT rate for stock funds with dividend receipts less than capital gains? A: The CGT rate for stock funds, where dividend receipts are less than capital gains, was reduced from 20% to 15%.
17. Q: What constitutes ‘significant economic presence’ for non-residents in Pakistan? A: Significant economic presence for non-residents in Pakistan includes transactions with persons in Pakistan exceeding a prescribed amount, systematic soliciting of business activities, or digital interaction with users in Pakistan, irrespective of the location of the agreement or services rendered.
18. Q: Are non-residents covered by double tax treaties affected by the ‘significant economic presence’ amendment? A: Non-residents covered by applicable double tax treaties are not affected by the ‘significant economic presence’ amendment, as treaty provisions override domestic tax legislation.
19. Q: What new powers have been given to the Commissioner for best judgment assessments? A: The Commissioner can now determine taxable income based on sectoral benchmark ratios notified by the Board, including financial, production, gross profit, net profit, recovery, and wastage ratios.
20. Q: How is the year of discovery defined for concealed foreign assets or income? A: The year of discovery for concealed foreign assets or income is defined as the year in which the Commissioner issues a notice requiring the person to explain the nature and source of such assets or income.
21. Q: Are assets of a spouse included in the wealth statement for the purpose of the Commissioner’s power? A: Assets of a spouse are included in the wealth statement only if the spouse is dependent, as clarified by an explanation added through the Finance Act.
22. Q: What is the enhanced rate of advance tax collection for late filers on property transactions? A: The enhanced rate of advance tax collection for late filers on property transactions applies only to those who filed their returns for the last three preceding tax years after the respective due dates.
23. Q: Was the proposal to withdraw the 25% tax credit for full-time teachers and researchers accepted? A: No, the proposal to withdraw the 25% tax credit for full-time teachers and researchers was not accepted, and the tax credit continues to be available.
24. Q: What is the revised rate of default surcharge as per the Finance Act? A: The revised rate of default surcharge is 12% per annum or KIBOR plus 3%, whichever is higher.
25. Q: What are the penalties for non-compliance with FBR general orders for disconnection of utilities? A: The penalties for non-compliance are Rs 50 million for the first default and Rs 100 million for each subsequent default, effective from the date notified by the Board.
26. Q: What amendments were made regarding the two-tier appeal system in the Finance Act? A: Amendments include extending the transfer period of pending cases to December 31, 2024, specifying decision periods, and applying stay deposit conditions on CIRA orders.
27. Q: What new provisions were introduced to establish the Tax Fraud Investigation Wing (TFIW)? A: Provisions were introduced to establish TFIW with units for fraud intelligence, investigation, legal, accounting, digital forensics, and administration, with functions notified by FBR.
28. Q: What exemptions were provided to Special Purpose Vehicles (SPVs) buying Diversified Payment Rights? A: Income of SPVs buying Diversified Payment Rights is exempt from tax, and withholding tax provisions on payments to non-residents do not apply to such SPVs.
29. Q: How was the definition of ‘associate’ amended in the Finance Act? A: The definition of ‘associate’ was amended to align with section 85 of the Income Tax Ordinance, 2001, with necessary editorial corrections.
30. Q: What changes were made to the definition of ‘input tax’ in the Sales Tax Act? A: The definition of ‘input tax’ was amended to empower the Board to exclude certain services subject to provincial sales tax from admissibility through notification.
31. Q: What new elements were included in the definition of ‘tax fraud’? A: The definition now includes making taxable supplies without registration and intentional acts or omissions causing tax loss under the Sales Tax Act.
32. Q: What conditions apply for abatement of best judgment assessments in sales tax matters? A: Abatement of best judgment assessments occurs if the return is filed within sixty days of the assessment order, along with the deposit of due tax.
33. Q: What powers does the Chief Commissioner have regarding ‘Blacklisting’ and ‘Suspension’ orders? A: The Chief Commissioner can examine and modify ‘Blacklisting’ and ‘Suspension’ orders passed by the Commissioner, with such orders not appealable before the Appellate Tribunal.
34. Q: How was the ambiguity regarding payments through banking channels addressed? A: The ambiguity was clarified to specify that the threshold of Rs 50,000 is with reference to payments made to a single supplier in a tax period.
35. Q: Was the proposal to authorize investigative audit for tax fraud retained in the Finance Act? A: No, the proposal for investigative audit was dropped, but a new section authorizing the establishment of TFIW was included.
36. Q: What penalty amendments were introduced in the Finance Act? A: The Finance Act introduced further amendments to strengthen penal provisions, including editorial corrections and retaining certain penalties proposed through the Finance Bill.
37. Q: Which exemptions from sales tax were retained in the Finance Act? A: Exemptions retained include imports and supplies for cardiology, oncology, and charitable hospitals, as well as zero rating for raw materials for manufacturing exercise books.
38. Q: What new exemptions were introduced in the Finance Act regarding sales tax? A: New exemptions include supply/import of electricity to Azad Jammu and Kashmir, import of certain medications, bovine semen, and milk supplied by corporate dairy farms.
39. Q: What exemptions for erstwhile tribal areas were extended in the Finance Act? A: Exemptions for supplies and imports in tribal areas were extended till June 30, 2025, withdrawing the proposal for reduced rates.
40. Q: How are locally manufactured hybrid electric vehicles taxed under the Finance Act? A: Locally manufactured hybrid electric vehicles are subject to reduced sales tax rates of 8.5% for vehicles up to 1800 cc and 12.75% for vehicles from 1801 cc to 2500 cc until June 30, 2026.
41. Q: What is the increased rate of Federal Excise Duty (FED) on Portland cement? A: The rate of FED on Portland cement was increased from Rs 2 per kg to Rs 4 per kg.
42. Q: What FED has been levied on lubricating oil as per the Finance Act? A: FED at the rate of 5% ad valorem has been levied on lubricating oil under specific tariff headings.
43. Q: What changes were made to the minimum price restriction on cigarette brands? A: The minimum price restriction for cigarettes was reduced from 60% of the retail price to 55%, with revised descriptions for different tiers.
44. Q: What is the revised FED on international air travel services? A: FED on international air travel services was increased, with rates varying based on the class of travel and IATA Traffic Conference Areas, effective from July 1, 2024.
45. Q: What is the new Table III introduced in the Federal Excise Duty schedule? A: Table III aligns the chargeability of FED on items not covered by import/manufacturing of excisable goods or rendering of excisable services, including allotment/transfer of immovable property and sugar supply.
46. Q: How is CVT on farmhouses and residential houses in Islamabad Capital Territory determined? A: CVT is imposed based on area, with Rs 500,000 for farmhouses between 2000-4000 square yards, Rs 1,000,000 for larger farmhouses, and similar rates for residential houses.
47. Q: What are the maximum rates of Petroleum Levy (PL) after the Finance Act amendments? A: The maximum rates of PL were reduced from the proposed rates, with specific rates for different petroleum products such as HSDO, motor gasoline, and HOBC.
48. Q: How does the Finance Act, 2024, address the taxation of sugar supply? A: FED at Rs 15 per kg is levied on the supply of white crystalline sugar by any person to a manufacturing, processing, and packaging entity.
49. Q: What specific amendments were made to the income tax appeals process? A: Amendments include changes in the transfer and decision timelines for appeals, stay deposit conditions, and clarification on the jurisdiction of the High Court for references.
50. Q: What units comprise the Tax Fraud Investigation Wing (TFIW)? A: TFIW includes units for fraud intelligence, investigation, legal, accounting, digital forensics, and administration, with functions specified by FBR notification.

51. Q: How is the exemption for Diversified Payment Rights transactions defined in the Finance Act? A: Exemption is provided for income of Special Purpose Vehicles (SPVs) purchasing Diversified Payment Rights from Authorized Dealers in Pakistan, and the withholding tax provisions on payments to non-residents do not apply to such SPVs.
52. Q: How does the Finance Act redefine the term ‘associate’? A: The term ‘associate’ has been redefined to align with section 85 of the Income Tax Ordinance, 2001, including necessary editorial amendments for consistency.
53. Q: What is the amendment regarding the admissibility of input tax in the Sales Tax Act? A: The definition of ‘input tax’ was amended to allow the Board to exclude certain services subject to provincial sales tax from admissibility through notifications with specific conditions, restrictions, or limitations.
54. Q: How was the definition of ‘tax fraud’ expanded in the Finance Act? A: The definition was expanded to include intentionally understating or underpaying tax liability, overstating entitlement to tax credit or refund, making taxable supplies without registration, and causing loss of tax through intentional acts or omissions.
55. Q: What is the amended abatement condition for best judgment assessments in sales tax? A: Abatement of best judgment assessments will only occur if the return is filed within sixty days of the assessment order, along with the payment of due tax.
56. Q: What powers does the Chief Commissioner have regarding blacklisting and suspension orders? A: The Chief Commissioner can examine and modify blacklisting and suspension orders passed by the Commissioner, with such orders not being appealable before the Appellate Tribunal.
57. Q: How was the ambiguity regarding payments through banking channels resolved? A: The threshold of Rs 50,000 for payments not made through banking channels is now clearly specified to be with reference to payments made to a single supplier in a tax period.
58. Q: Was the proposal for investigative audit in tax fraud cases retained? A: No, the proposal for investigative audit was dropped, but a new section was included authorizing the establishment of a Tax Fraud Investigation Wing for handling tax fraud cases.
59. Q: What changes were made to the penalty provisions in the Finance Act? A: Amendments were made to strengthen penal provisions, including editorial corrections and retaining certain penalties proposed through the Finance Bill.
60. Q: What exemptions from sales tax were retained in the Finance Act? A: Exemptions for imports and supplies for cardiology, oncology, charitable hospitals, and raw materials for manufacturing exercise books were retained.
61. Q: What new sales tax exemptions were introduced in the Finance Act? A: New exemptions include supply/import of electricity to Azad Jammu and Kashmir, import of certain medications, bovine semen, and milk supplied by corporate dairy farms.
62. Q: How were exemptions for erstwhile tribal areas addressed in the Finance Act? A: Exemptions for supplies and imports in tribal areas were extended until June 30, 2025, withdrawing the proposal for reduced rates.
63. Q: What are the sales tax rates for locally manufactured hybrid electric vehicles? A: Reduced sales tax rates for locally manufactured hybrid electric vehicles are 8.5% for vehicles up to 1800 cc and 12.75% for vehicles from 1801 cc to 2500 cc until June 30, 2026.
64. Q: What is the revised rate of Federal Excise Duty on Portland cement? A: The Federal Excise Duty on Portland cement was increased to Rs 4 per kg.
65. Q: What is the Federal Excise Duty on lubricating oil as per the Finance Act? A: FED at the rate of 5% ad valorem is levied on lubricating oil under specific tariff headings.
66. Q: How were the minimum price restrictions on cigarette brands changed? A: The minimum price restriction for cigarettes was reduced from 60% of the retail price to 55%, with revised descriptions for different tiers.
67. Q: What are the new FED rates for international air travel services? A: FED on international air travel services was increased, with specific rates for different classes and IATA Traffic Conference Areas, effective from July 1, 2024.
68. Q: What is the purpose of the newly introduced Table III in the FED schedule? A: Table III aligns the chargeability of FED on items not covered by import/manufacturing of excisable goods or rendering of excisable services, including allotment/transfer of immovable property and sugar supply.
69. Q: How is CVT on farmhouses and residential houses in Islamabad Capital Territory determined? A: CVT is imposed based on area, with Rs 500,000 for farmhouses between 2000-4000 square yards, Rs 1,000,000 for larger farmhouses, and similar rates for residential houses.
70. Q: What are the maximum rates of Petroleum Levy after the Finance Act amendments? A: The maximum rates of Petroleum Levy were reduced from the proposed rates, with specific rates for different petroleum products such as HSDO, motor gasoline, and HOBC.
71. Q: How is the supply of white crystalline sugar taxed under the Finance Act? A: FED at Rs 15 per kg is levied on the supply of white crystalline sugar by any person to a manufacturing, processing, and packaging entity.
72. Q: What specific amendments were made to the income tax appeals process? A: Amendments include changes in the transfer and decision timelines for appeals, stay deposit conditions, and clarification on the jurisdiction of the High Court for references.
73. Q: What units comprise the Tax Fraud Investigation Wing (TFIW)? A: TFIW includes units for fraud intelligence, investigation, legal, accounting, digital forensics, and administration, with functions specified by FBR notification.
74. Q: How is the exemption for Diversified Payment Rights transactions defined in the Finance Act? A: Exemption is provided for income of Special Purpose Vehicles (SPVs) purchasing Diversified Payment Rights from Authorized Dealers in Pakistan, and the withholding tax provisions on payments to non-residents do not apply to such SPVs.
75. Q: How does the Finance Act redefine the term ‘associate’? A: The term ‘associate’ has been redefined to align with section 85 of the Income Tax Ordinance, 2001, including necessary editorial amendments for consistency.
76. Q: What is the amendment regarding the admissibility of input tax in the Sales Tax Act? A: The definition of ‘input tax’ was amended to allow the Board to exclude certain services subject to provincial sales tax from admissibility through notifications with specific conditions, restrictions, or limitations.
77. Q: How was the definition of ‘tax fraud’ expanded in the Finance Act? A: The definition was expanded to include intentionally understating or underpaying tax liability, overstating entitlement to tax credit or refund, making taxable supplies without registration, and causing loss of tax through intentional acts or omissions.
78. Q: What conditions apply for abatement of best judgment assessments in sales tax matters? A: Abatement of best judgment assessments occurs if the return is filed within sixty days of the assessment order, along with the deposit of due tax.
79. Q: What powers does the Chief Commissioner have regarding blacklisting and suspension orders? A: The Chief Commissioner can examine and modify blacklisting and suspension orders passed by the Commissioner, with such orders not being appealable before the Appellate Tribunal.
80. Q: How was the ambiguity regarding payments through banking channels resolved? A: The threshold of Rs 50,000 for payments not made through banking channels is now clearly specified to be with reference to payments made to a single supplier in a tax period.
81. Q: Was the proposal for investigative audit in tax fraud cases retained? A: No, the proposal for investigative audit was dropped, but a new section was included authorizing the establishment of a Tax Fraud Investigation Wing for handling tax fraud cases.
82. Q: What penalty amendments were introduced in the Finance Act? A: Amendments were made to strengthen penal provisions, including editorial corrections and retaining certain penalties proposed through the Finance Bill.
83. Q: Which sales tax exemptions were retained in the Finance Act? A: Exemptions for imports and supplies for cardiology, oncology, charitable hospitals, and raw materials for manufacturing exercise books were retained.
84. Q: What new sales tax exemptions were introduced in the Finance Act? A: New exemptions include supply/import of electricity to Azad Jammu and Kashmir, import of certain medications, bovine semen, and milk supplied by corporate dairy farms.
85. Q: How were exemptions for erstwhile tribal areas addressed in the Finance Act? A: Exemptions for supplies and imports in tribal areas were extended until June 30, 2025, withdrawing the proposal for reduced rates.
86. Q: What are the sales tax rates for locally manufactured hybrid electric vehicles? A: Reduced sales tax rates for locally manufactured hybrid electric vehicles are 8.5% for vehicles up to 1800 cc and 12.75% for vehicles from 1801 cc to 2500 cc until June 30, 2026.
87. Q: What is the revised rate of Federal Excise Duty on Portland cement? A: The Federal Excise Duty on Portland cement was increased to Rs 4 per kg.
88. Q: What is the Federal Excise Duty on lubricating oil as per the Finance Act? A: FED at the rate of 5% ad valorem is levied on lubricating oil under specific tariff headings.
89. Q: How were the minimum price restrictions on cigarette brands changed? A: The minimum price restriction for cigarettes was reduced from 60% of the retail price to 55%, with revised descriptions for different tiers.
90. Q: What are the new FED rates for international air travel services? A: FED on international air travel services was increased, with specific rates for different classes and IATA Traffic Conference Areas, effective from July 1, 2024.
91. Q: What is the purpose of the newly introduced Table III in the FED schedule? A: Table III aligns the chargeability of FED on items not covered by import/manufacturing of excisable goods or rendering of excisable services, including allotment/transfer of immovable property and sugar supply.
92. Q: How is CVT on farmhouses and residential houses in Islamabad Capital Territory determined? A: CVT is imposed based on area, with Rs 500,000 for farmhouses between 2000-4000 square yards, Rs 1,000,000 for larger farmhouses, and similar rates for residential houses.
93. Q: What are the maximum rates of Petroleum Levy after the Finance Act amendments? A: The maximum rates of Petroleum Levy were reduced from the proposed rates, with specific rates for different petroleum products such as HSDO, motor gasoline, and HOBC.
94. Q: How is the supply of white crystalline sugar taxed under the Finance Act? A: FED at Rs 15 per kg is levied on the supply of white crystalline sugar by any person to a manufacturing, processing, and packaging entity.
95. Q: What specific amendments were made to the income tax appeals process? A: Amendments include changes in the transfer and decision timelines for appeals, stay deposit conditions, and clarification on the jurisdiction of the High Court for references.
96. Q: What units comprise the Tax Fraud Investigation Wing (TFIW)? A: TFIW includes units for fraud intelligence, investigation, legal, accounting, digital forensics, and administration, with functions specified by FBR notification.
97. Q: How is the exemption for Diversified Payment Rights transactions defined in the Finance Act? A: Exemption is provided for income of Special Purpose Vehicles (SPVs) purchasing Diversified Payment Rights from Authorized Dealers in Pakistan, and the withholding tax provisions on payments to non-residents do not apply to such SPVs.
98. Q: How does the Finance Act redefine the term ‘associate’? A: The term ‘associate’ has been redefined to align with section 85 of the Income Tax Ordinance, 2001, including necessary editorial amendments for consistency.
99. Q: What is the amendment regarding the admissibility of input tax in the Sales Tax Act? A: The definition of ‘input tax’ was amended to allow the Board to exclude certain services subject to provincial sales tax from admissibility through notifications with specific conditions, restrictions, or limitations.
100. Q: How was the definition of ‘tax fraud’ expanded in the Finance Act? A: The definition was expanded to include intentionally understating or underpaying tax liability, overstating entitlement to tax credit or refund, making taxable supplies without registration, and causing loss of tax through intentional acts or omissions.
101. Q: What conditions apply for abatement of best judgment assessments in sales tax matters? A: Abatement of best judgment assessments occurs if the return is filed within sixty days of the assessment order, along with the deposit of due tax.
102. Q: What powers does the Chief Commissioner have regarding blacklisting and suspension orders? A: The Chief Commissioner can examine and modify blacklisting and suspension orders passed by the Commissioner, with such orders not being appealable before the Appellate Tribunal.
103. Q: How was the ambiguity regarding payments through banking channels resolved? A: The threshold of Rs 50,000 for payments not made through banking channels is now clearly specified to be with reference to payments made to a single supplier in a tax period.
104. Q: Was the proposal for investigative audit in tax fraud cases retained? A: No, the proposal for investigative audit was dropped, but a new section was included authorizing the establishment of a Tax Fraud Investigation Wing for handling tax fraud cases.
105. Q: What penalty amendments were introduced in the Finance Act? A: Amendments were made to strengthen penal provisions, including editorial corrections and retaining certain penalties proposed through the Finance Bill.
106. Q: Which sales tax exemptions were retained in the Finance Act? A: Exemptions for imports and supplies for cardiology, oncology, charitable hospitals, and raw materials for manufacturing exercise books were retained.
107. Q: What new sales tax exemptions were introduced in the Finance Act? A: New exemptions include supply/import of electricity to Azad Jammu and Kashmir, import of certain medications, bovine semen, and milk supplied by corporate dairy farms.
108. Q: How were exemptions for erstwhile tribal areas addressed in the Finance Act? A: Exemptions for supplies and imports in tribal areas were extended until June 30, 2025, withdrawing the proposal for reduced rates.
109. Q: What are the sales tax rates for locally manufactured hybrid electric vehicles? A: Reduced sales tax rates for locally manufactured hybrid electric vehicles are 8.5% for vehicles up to 1800 cc and 12.75% for vehicles from 1801 cc to 2500 cc until June 30, 2026.
110. Q: What is the revised rate of Federal Excise Duty on Portland cement? A: The Federal Excise Duty on Portland cement was increased to Rs 4 per kg.
111. Q: What is the Federal Excise Duty on lubricating oil as per the Finance Act? A: FED at the rate of 5% ad valorem is levied on lubricating oil under specific tariff headings.
112. Q: How were the minimum price restrictions on cigarette brands changed? A: The minimum price restriction for cigarettes was reduced from 60% of the retail price to 55%, with revised descriptions for different tiers.
113. Q: What are the new FED rates for international air travel services? A: FED on international air travel services was increased, with specific rates for different classes and IATA Traffic Conference Areas, effective from July 1, 2024.
114. Q: What is the purpose of the newly introduced Table III in the FED schedule? A: Table III aligns the chargeability of FED on items not covered by import/manufacturing of excisable goods or rendering of excisable services, including allotment/transfer of immovable property and sugar supply.
115. Q: How is CVT on farmhouses and residential houses in Islamabad Capital Territory determined? A: CVT is imposed based on area, with Rs 500,000 for farmhouses between 2000-4000 square yards, Rs 1,000,000 for larger farmhouses, and similar rates for residential houses.
116. Q: What are the maximum rates of Petroleum Levy after the Finance Act amendments? A: The maximum rates of Petroleum Levy were reduced from the proposed rates, with specific rates for different petroleum products such as HSDO, motor gasoline, and HOBC.
117. Q: How is the supply of white crystalline sugar taxed under the Finance Act? A: FED at Rs 15 per kg is levied on the supply of white crystalline sugar by any person to a manufacturing, processing, and packaging entity.
118. Q: What specific amendments were made to the income tax appeals process? A: Amendments include changes in the transfer and decision timelines for appeals, stay deposit conditions, and clarification on the jurisdiction of the High Court for references.
119. Q: What units comprise the Tax Fraud Investigation Wing (TFIW)? A: TFIW includes units for fraud intelligence, investigation, legal, accounting, digital forensics, and administration, with functions specified by FBR notification.
120. Q: How is the exemption for Diversified Payment Rights transactions defined in the Finance Act? A: Exemption is provided for income of Special Purpose Vehicles (SPVs) purchasing Diversified Payment Rights from Authorized Dealers in Pakistan, and the withholding tax provisions on payments to non-residents do not apply to such SPVs.
121. Q: How does the Finance Act redefine the term ‘associate’? A: The term ‘associate’ has been redefined to align with section 85 of the Income Tax Ordinance, 2001, including necessary editorial amendments for consistency.
122. Q: What is the amendment regarding the admissibility of input tax in the Sales Tax Act? A: The definition of ‘input tax’ was amended to allow the Board to exclude certain services subject to provincial sales tax from admissibility through notifications with specific conditions, restrictions, or limitations.
123. Q: How was the definition of ‘tax fraud’ expanded in the Finance Act? A: The definition was expanded to include intentionally understating or underpaying tax liability, overstating entitlement to tax credit or refund, making taxable supplies without registration, and causing loss of tax through intentional acts or omissions.
124. Q: What conditions apply for abatement of best judgment assessments in sales tax matters? A: Abatement of best judgment assessments occurs if the return is filed within sixty days of the assessment order, along with the deposit of due tax.
125. Q: What powers does the Chief Commissioner have regarding blacklisting and suspension orders? A: The Chief Commissioner can examine and modify blacklisting and suspension orders passed by the Commissioner, with such orders not being appealable before the Appellate Tribunal.
126. Q: How was the ambiguity regarding payments through banking channels resolved? A: The threshold of Rs 50,000 for payments not made through banking channels is now clearly specified to be with reference to payments made to a single supplier in a tax period.
127. Q: Was the proposal for investigative audit in tax fraud cases retained? A: No, the proposal for investigative audit was dropped, but a new section was included authorizing the establishment of a Tax Fraud Investigation Wing for handling tax fraud cases.
128. Q: What penalty amendments were introduced in the Finance Act? A: Amendments were made to strengthen penal provisions, including editorial corrections and retaining certain penalties proposed through the Finance Bill.
129. Q: Which sales tax exemptions were retained in the Finance Act? A: Exemptions for imports and supplies for cardiology, oncology, charitable hospitals, and raw materials for manufacturing exercise books were retained.
130. Q: What new sales tax exemptions were introduced in the Finance Act? A: New exemptions include supply/import of electricity to Azad Jammu and Kashmir, import of certain medications, bovine semen, and milk supplied by corporate dairy farms.
131. Q: How were exemptions for erstwhile tribal areas addressed in the Finance Act? A: Exemptions for supplies and imports in tribal areas were extended until June 30, 2025, withdrawing the proposal for reduced rates.
132. Q: What are the sales tax rates for locally manufactured hybrid electric vehicles? A: Reduced sales tax rates for locally manufactured hybrid electric vehicles are 8.5% for vehicles up to 1800 cc and 12.75% for vehicles from 1801 cc to 2500 cc until June 30, 2026.
133. Q: What is the revised rate of Federal Excise Duty on Portland cement? A: The Federal Excise Duty on Portland cement was increased to Rs 4 per kg.
134. Q: What is the Federal Excise Duty on lubricating oil as per the Finance Act? A: FED at the rate of 5% ad valorem is levied on lubricating oil under specific tariff headings.
135. Q: How were the minimum price restrictions on cigarette brands changed? A: The minimum price restriction for cigarettes was reduced from 60% of the retail price to 55%, with revised descriptions for different tiers.
136. Q: What are the new FED rates for international air travel services? A: FED on international air travel services was increased, with specific rates for different classes and IATA Traffic Conference Areas, effective from July 1, 2024.
137. Q: What is the purpose of the newly introduced Table III in the FED schedule? A: Table III aligns the chargeability of FED on items not covered by import/manufacturing of excisable goods or rendering of excisable services, including allotment/transfer of immovable property and sugar supply.
138. Q: How is CVT on farmhouses and residential houses in Islamabad Capital Territory determined? A: CVT is imposed based on area, with Rs 500,000 for farmhouses between 2000-4000 square yards, Rs 1,000,000 for larger farmhouses, and similar rates for residential houses.
139. Q: What are the maximum rates of Petroleum Levy after the Finance Act amendments? A: The maximum rates of Petroleum Levy were reduced from the proposed rates, with specific rates for different petroleum products such as HSDO, motor gasoline, and HOBC.
140. Q: How is the supply of white crystalline sugar taxed under the Finance Act? A: FED at Rs 15 per kg is levied on the supply of white crystalline sugar by any person to a manufacturing, processing, and packaging entity.
141. Q: What specific amendments were made to the income tax appeals process? A: Amendments include changes in the transfer and decision timelines for appeals, stay deposit conditions, and clarification on the jurisdiction of the High Court for references.
142. Q: What units comprise the Tax Fraud Investigation Wing (TFIW)? A: TFIW includes units for fraud intelligence, investigation, legal, accounting, digital forensics, and administration, with functions specified by FBR notification.
143. Q: How is the exemption for Diversified Payment Rights transactions defined in the Finance Act? A: Exemption is provided for income of Special Purpose Vehicles (SPVs) purchasing Diversified Payment Rights from Authorized Dealers in Pakistan, and the withholding tax provisions on payments to non-residents do not apply to such SPVs.
144. Q: How does the Finance Act redefine the term ‘associate’? A: The term ‘associate’ has been redefined to align with section 85 of the Income Tax Ordinance, 2001, including necessary editorial amendments for consistency.
145. Q: What is the amendment regarding the admissibility of input tax in the Sales Tax Act? A: The definition of ‘input tax’ was amended to allow the Board to exclude certain services subject to provincial sales tax from admissibility through notifications with specific conditions, restrictions, or limitations.
146. Q: How was the definition of ‘tax fraud’ expanded in the Finance Act? A: The definition was expanded to include intentionally understating or underpaying tax liability, overstating entitlement to tax credit or refund, making taxable supplies without registration, and causing loss of tax through intentional acts or omissions.
147. Q: What conditions apply for abatement of best judgment assessments in sales tax matters? A: Abatement of best judgment assessments occurs if the return is filed within sixty days of the assessment order, along with the deposit of due tax.
148. Q: What powers does the Chief Commissioner have regarding blacklisting and suspension orders? A: The Chief Commissioner can examine and modify blacklisting and suspension orders passed by the Commissioner, with such orders not being appealable before the Appellate Tribunal.
149. Q: How was the ambiguity regarding payments through banking channels resolved? A: The threshold of Rs 50,000 for payments not made through banking channels is now clearly specified to be with reference to payments made to a single supplier in a tax period.
150. Q: Was the proposal for investigative audit in tax fraud cases retained? A: No, the proposal for investigative audit was dropped, but a new section was included authorizing the establishment of a Tax Fraud Investigation Wing for handling tax fraud cases.
151. Q: What penalty amendments were introduced in the Finance Act? A: Amendments were made to strengthen penal provisions, including editorial corrections and retaining certain penalties proposed through the Finance Bill.
152. Q: Which sales tax exemptions were retained in the Finance Act? A: Exemptions for imports and supplies for cardiology, oncology, charitable hospitals, and raw materials for manufacturing exercise books were retained.
153. Q: What new sales tax exemptions were introduced in the Finance Act? A: New exemptions include supply/import of electricity to Azad Jammu and Kashmir, import of certain medications, bovine semen, and milk supplied by corporate dairy farms.
154. Q: How were exemptions for erstwhile tribal areas addressed in the Finance Act? A: Exemptions for supplies and imports in tribal areas were extended until June 30, 2025, withdrawing the proposal for reduced rates.
155. Q: What are the sales tax rates for locally manufactured hybrid electric vehicles? A: Reduced sales tax rates for locally manufactured hybrid electric vehicles are 8.5% for vehicles up to 1800 cc and 12.75% for vehicles from 1801 cc to 2500 cc until June 30, 2026.
156. Q: What is the revised rate of Federal Excise Duty on Portland cement? A: The Federal Excise Duty on Portland cement was increased to Rs 4 per kg.

158. Q: How were the minimum price restrictions on cigarette brands changed? A: The minimum price restriction for cigarettes was reduced from 60% of the retail price to 55%, with revised descriptions for different tiers.
159. Q: What are the new FED rates for international air travel services? A: FED on international air travel services was increased, with specific rates for different classes and IATA Traffic Conference Areas, effective from July 1, 2024.
160. Q: What is the purpose of the newly introduced Table III in the FED schedule? A: Table III aligns the chargeability of FED on items not covered by import/manufacturing of excisable goods or rendering of excisable services, including allotment/transfer of immovable property and sugar supply.
161. Q: How is CVT on farmhouses and residential houses in Islamabad Capital Territory determined? A: CVT is imposed based on area, with Rs 500,000 for farmhouses between 2000-4000 square yards, Rs 1,000,000 for larger farmhouses, and similar rates for residential houses.
162. Q: What are the maximum rates of Petroleum Levy after the Finance Act amendments? A: The maximum rates of Petroleum Levy were reduced from the proposed rates, with specific rates for different petroleum products such as HSDO, motor gasoline, and HOBC.
163. Q: How is the supply of white crystalline sugar taxed under the Finance Act? A: FED at Rs 15 per kg is levied on the supply of white crystalline sugar by any person to a manufacturing, processing, and packaging entity.
164. Q: What specific amendments were made to the income tax appeals process? A: Amendments include changes in the transfer and decision timelines for appeals, stay deposit conditions, and clarification on the jurisdiction of the High Court for references.
165. Q: What units comprise the Tax Fraud Investigation Wing (TFIW)? A: TFIW includes units for fraud intelligence, investigation, legal, accounting, digital forensics, and administration, with functions specified by FBR notification.
166. Q: How is the exemption for Diversified Payment Rights transactions defined in the Finance Act? A: Exemption is provided for income of Special Purpose Vehicles (SPVs) purchasing Diversified Payment Rights from Authorized Dealers in Pakistan, and the withholding tax provisions on payments to non-residents do not apply to such SPVs.
167. Q: How does the Finance Act redefine the term ‘associate’? A: The term ‘associate’ has been redefined to align with section 85 of the Income Tax Ordinance, 2001, including necessary editorial amendments for consistency.
168. Q: What is the amendment regarding the admissibility of input tax in the Sales Tax Act? A: The definition of ‘input tax’ was amended to allow the Board to exclude certain services subject to provincial sales tax from admissibility through notifications with specific conditions, restrictions, or limitations.
169. Q: How was the definition of ‘tax fraud’ expanded in the Finance Act? A: The definition was expanded to include intentionally understating or underpaying tax liability, overstating entitlement to tax credit or refund, making taxable supplies without registration, and causing loss of tax through intentional acts or omissions.
170. Q: What conditions apply for abatement of best judgment assessments in sales tax matters? A: Abatement of best judgment assessments occurs if the return is filed within sixty days of the assessment order, along with the deposit of due tax.
171. Q: What powers does the Chief Commissioner have regarding blacklisting and suspension orders? A: The Chief Commissioner can examine and modify blacklisting and suspension orders passed by the Commissioner, with such orders not being appealable before the Appellate Tribunal.
172. Q: How was the ambiguity regarding payments through banking channels resolved? A: The threshold of Rs 50,000 for payments not made through banking channels is now clearly specified to be with reference to payments made to a single supplier in a tax period.
173. Q: Was the proposal for investigative audit in tax fraud cases retained? A: No, the proposal for investigative audit was dropped, but a new section was included authorizing the establishment of a Tax Fraud Investigation Wing for handling tax fraud cases.
174. Q: What penalty amendments were introduced in the Finance Act? A: Amendments were made to strengthen penal provisions, including editorial corrections and retaining certain penalties proposed through the Finance Bill.
175. Q: Which sales tax exemptions were retained in the Finance Act? A: Exemptions for imports and supplies for cardiology, oncology, charitable hospitals, and raw materials for manufacturing exercise books were retained.
176. Q: What new sales tax exemptions were introduced in the Finance Act? A: New exemptions include supply/import of electricity to Azad Jammu and Kashmir, import of certain medications, bovine semen, and milk supplied by corporate dairy farms.
177. Q: How were exemptions for erstwhile tribal areas addressed in the Finance Act? A: Exemptions for supplies and imports in tribal areas were extended until June 30, 2025, withdrawing the proposal for reduced rates.
178. Q: What are the sales tax rates for locally manufactured hybrid electric vehicles? A: Reduced sales tax rates for locally manufactured hybrid electric vehicles are 8.5% for vehicles up to 1800 cc and 12.75% for vehicles from 1801 cc to 2500 cc until June 30, 2026.
179. Q: What is the revised rate of Federal Excise Duty on Portland cement? A: The Federal Excise Duty on Portland cement was increased to Rs 4 per kg.
180. Q: What is the Federal Excise Duty on lubricating oil as per the Finance Act? A: FED at the rate of 5% ad valorem is levied on lubricating oil under specific tariff headings.
181. Q: How were the minimum price restrictions on cigarette brands changed? A: The minimum price restriction for cigarettes was reduced from 60% of the retail price to 55%, with revised descriptions for different tiers.
182. Q: What are the new FED rates for international air travel services? A: FED on international air travel services was increased, with specific rates for different classes and IATA Traffic Conference Areas, effective from July 1, 2024.
183. Q: What is the purpose of the newly introduced Table III in the FED schedule? A: Table III aligns the chargeability of FED on items not covered by import/manufacturing of excisable goods or rendering of excisable services, including allotment/transfer of immovable property and sugar supply.
184. Q: How is CVT on farmhouses and residential houses in Islamabad Capital Territory determined? A: CVT is imposed based on area, with Rs 500,000 for farmhouses between 2000-4000 square yards, Rs 1,000,000 for larger farmhouses, and similar rates for residential houses.
185. Q: What are the maximum rates of Petroleum Levy after the Finance Act amendments? A: The maximum rates of Petroleum Levy were reduced from the proposed rates, with specific rates for different petroleum products such as HSDO, motor gasoline, and HOBC.
186. Q: How is the supply of white crystalline sugar taxed under the Finance Act? A: FED at Rs 15 per kg is levied on the supply of white crystalline sugar by any person to a manufacturing, processing, and packaging entity.
187. Q: What specific amendments were made to the income tax appeals process? A: Amendments include changes in the transfer and decision timelines for appeals, stay deposit conditions, and clarification on the jurisdiction of the High Court for references.
188. Q: What units comprise the Tax Fraud Investigation Wing (TFIW)? A: TFIW includes units for fraud intelligence, investigation, legal, accounting, digital forensics, and administration, with functions specified by FBR notification.
189. Q: How is the exemption for Diversified Payment Rights transactions defined in the Finance Act? A: Exemption is provided for income of Special Purpose Vehicles (SPVs) purchasing Diversified Payment Rights from Authorized Dealers in Pakistan, and the withholding tax provisions on payments to non-residents do not apply to such SPVs.
190. Q: How does the Finance Act redefine the term ‘associate’? A: The term ‘associate’ has been redefined to align with section 85 of the Income Tax Ordinance, 2001, including necessary editorial amendments for consistency.
191. Q: What is the amendment regarding the admissibility of input tax in the Sales Tax Act? A: The definition of ‘input tax’ was amended to allow the Board to exclude certain services subject to provincial sales tax from admissibility through notifications with specific conditions, restrictions, or limitations.
192. Q: How was the definition of ‘tax fraud’ expanded in the Finance Act? A: The definition was expanded to include intentionally understating or underpaying tax liability, overstating entitlement to tax credit or refund, making taxable supplies without registration, and causing loss of tax through intentional acts or omissions.
193. Q: What conditions apply for abatement of best judgment assessments in sales tax matters? A: Abatement of best judgment assessments occurs if the return is filed within sixty days of the assessment order, along with the deposit of due tax.
194. Q: What powers does the Chief Commissioner have regarding blacklisting and suspension orders? A: The Chief Commissioner can examine and modify blacklisting and suspension orders passed by the Commissioner, with such orders not being appealable before the Appellate Tribunal.
195. Q: How was the ambiguity regarding payments through banking channels resolved? A: The threshold of Rs 50,000 for payments not made through banking channels is now clearly specified to be with reference to payments made to a single supplier in a tax period.
196. Q: Was the proposal for investigative audit in tax fraud cases retained? A: No, the proposal for investigative audit was dropped, but a new section was included authorizing the establishment of a Tax Fraud Investigation Wing for handling tax fraud cases.
197. Q: What penalty amendments were introduced in the Finance Act? A: Amendments were made to strengthen penal provisions, including editorial corrections and retaining certain penalties proposed through the Finance Bill.
198. Q: Which sales tax exemptions were retained in the Finance Act? A: Exemptions for imports and supplies for cardiology, oncology, charitable hospitals, and raw materials for manufacturing exercise books were retained.
199. Q: What new sales tax exemptions were introduced in the Finance Act? A: New exemptions include supply/import of electricity to Azad Jammu and Kashmir, import of certain medications, bovine semen, and milk supplied by corporate dairy farms.

200. Q: How were exemptions for erstwhile tribal areas addressed in the Finance Act? A: Exemptions for supplies and imports in tribal areas were extended until June 30, 2025, withdrawing the proposal for reduced rates.

You may also like

8 Misconceptions About Pakistani Law on Self-Defence

Judicial Attitudes to Corporate Governance in Pakistan: A Review of Recent Cases

Legal Advice on Corporate Governance Landscape in Pakistan For Non-Listed Companies (NLCs)

Legal Advice on Enforcement of Foreign Judgments in Pakistan: A Guide for Private Clients and Foreign Companies (Section 13 & 44-A CPC)