GOVERNMENT OF PAKISTAN
REVENUE DIVISION
CENTRAL BOARD OF REVENUE

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C.No.1(10)WHT/2004        

Islamabad, July 13, 2004

 

Circular No. 13 of 2004

(Income Tax)

 

Subject:         WITHHOLDING TAX ON IMPORT OF PLANT MACHINERY & EQUIPMENT.

 

Previously an industrial undertaking could import machinery for its own use without payment of withholding tax on production of exemption certificate from Commissioner of Income Tax. A facility has now been created vide SRO.441(I)/2004 dated 12.6.2004 whereby withholding tax under section 148 of the Income Tax Ordinance, 2001 will not be collected on the import of plant, machinery and equipment, which is entitled for:

i)        a reduced rate of 5% of customs-duty under Chapter 84 of the First Schedule of Customs Act, 1969, (IV of 1969); or

ii)       exempt from customs duty or subject to a lower rate of duty under relevant notifications;

2.       In order to implement the facility provided by the aforementioned SRO, a new clause (31A) in Part IV of Second Schedule to the Income Tax Ordinance, 2001 (through the Finance Act, 2004) has been inserted exempting the import of plant, machinery and equipment specified in the said clause from withholding tax, without any exemption certificate from the Commissioner of Income Tax.

(MUHAMMAD ASHFAQ AHMAD)
SECRETARY (WITHHOLDING TAXES