Section

S. # of the Proposed Change Nature of Impact Recommendation / Remarks

Law
1 Income In Income Tax Ordinance Under The advance tax Recommendation:
Tax Section 148: collected under Clarification to this effect would be
Ordinanc section 148 for import helpful and appreciated
e – (A) in sub-section (1),— of capital goods and
Section (a) after the word “Schedule” raw material by an 1. Insert in end of subsection
148 and the expression “in respect of industrial undertaking (7) of section148 of
income tax ordinance,
Twelfth goods classified in Parts I to III of for its own use will
2001:
Schedule the Twelfth Schedule” shall be now be treated as
inserted; and minimum “Provided that this sub
(b) for the full stop at the end, a tax. However, at the section, in case of
colon shall be substituted and time of the import industrial undertakings
thereafter the following proviso the classification of importing raw material,
shall be added, namely:— capital goods and components and sub-
86 “Provided that the Board raw material relates assemblies for own use in
may, by a notification in the to the activity to be manufacturing shall not
official Gazette, add in the undertaken by the apply to Part III of the
Twelfth Schedule any entry taxpayer will not be Twelfth Schedule.
thereto or omit any entry clear. While the intent 2. Proviso to be added in
therefrom or amend any entry of the legislation is Division II of Part V of
therein.”; understood to be to Chapter X after (b):
reduce incidence of
“In case of industrial
(B) in sub-section (7), taxation on the local
undertakings importing
(a) after the words “import of”, industry and make
raw material, components
the expression “goods on which local manufacturing
and sub-assemblies for
tax is required to be collected attractive, the the manufacturing of auto
under this section at the rate of inadvertent omission parts duly verified by the
1% or 2% by an industrial of a mechanism to engineering development
undertaking for its own use.” establish link board for its own
shall be inserted; and between imports and consumption, shall be the
(b) the hyphen and clauses (a), the subsequent use one applicable to the
(c), (d) and (e), occurring has created an category (1% or 2% as
thereafter shall be omitted; anomaly where most the case may).”
of the imports of the
auto vending industry
will now attract a
duty of 5.5% as the
final tax liability. This
high incidence of
taxation is not
sustainable as the
profit margin of this
industry is far below
this threshold.