Finance Bill 2026

BILL

to give effect to the financial proposals of the Federal Government for the year

beginning on the first day of July, 2026, and to amend certain laws

WHEREAS, it is expedient to make provisions to give effect to the financial proposals of the Federal Government for the year beginning on the first day of July, 2026, and to amend certain laws for the purposes hereinafter appearing;

It is hereby enacted as follows:-

1. Short title and commencement. ─ (1) This Bill shall be called the Finance Bill, 2026.

(2) It shall, unless otherwise provided, come into force on the first day of July, 2026.

2. Amendments of the West Pakistan Motor Vehicles Taxation Act, 1958 (WP Act XXXII of 1958).- In the West Pakistan Motor Vehicles Taxation Act, 1958 (WP Act XXXII of 1958) as in force in the Islamabad Capital Territory, in the Schedule, for the Tables 2, 3, 4 and 5, the following shall be substituted, namely:-

“SCHEDULE

[see section 3]

Table 2

Token Tax on Motor Vehicles

Table 3 Motor Cabs

Table 4

Public Service Vehicle

Table 5

Commercial Vehicle/Loading Vehicles

3. Amendments of the Petroleum Products (Petroleum Levy and Climate Support Levy) Ordinance, 1961 (XXV of 1961).- In the Petroleum Products (Petroleum Levy and Climate Support Levy) Ordinance, 1961 (XXV of 1961), the following further amendments shall be made, namely:-

4. in section 2,-

   • (a) for clause (1), the following shall be substituted, namely:-

     • “(1) “company” means an oil marketing company and includes a person engaged in the manufacturing, refining or reclaiming of lubricating oil from used lubricating oil under a license granted by OGRA;”;

   • (b) after the omitted clause (4D), the following new clauses shall be inserted, namely:

     • “(4E) “Oil Marketing Company” means a company, other than lubricant marketing company, engaged in purchasing or obtaining of petroleum products from refineries or blending plants or through sources abroad for selling, distributing or marketing, directly through his agents or dealers at his dispensing outlets or filling stations; and

     • (4F) “OGRA” means the Oil and Gas Regulatory Authority of Pakistan established under the under the Oil and Gas

Regulatory Authority Ordinance, 2002 (Ordinance XVII of 2002);”;

• (c) for clause (7), the following shall be substituted, namely:-

  • “(7) “refinery” means a facility or industrial plant where crude oil is refined to produce petroleum products.”;

2. in section 3,-

   • (a) for sub-section (1), the following shall be substituted, namely:“(1) The payment of Petroleum Levy and Climate Support Levy shall deemed to be a license condition of every company, refinery or licensee from the date of issue of license by OGRA and such company, refinery or licensee shall pay to the Federal Government, Petroleum levy and Climate Support Levy on petroleum products at such rates as may respectively be notified by the Federal Government in the official Gazette, from time to time.”; and

   • (b) sub-section (3) shall be omitted;

3. after section 3A, the following new sections shall be added, namely: - “3B. Late payment surcharge.- (1) Where any amount of the Petroleum Levy and Climate Support Levy are not paid within the prescribed due date i.e. the date of filing of Sales Tax or Federal Excise Returns in case of local production and date of payment of custom duty in case of imported products, the defaulting company, refinery or licensee shall, in addition to the amounts due, be liable to pay late payment surcharge calculated in the manner as specified in sub-section (1) of section 40D of the Public Finance Management Act, 2019.

3C. Recovery of amounts due under this Ordinance.- (1) Notwithstanding anything contained in the Public Finance Management Act, 2019 and subject to sub-section (2) of this Act, if the Petroleum Levy and Climate Support Levy due or the late payment surcharge are not paid within ninety days, the relevant department responsible for collecting the Petroleum Levy and Climate Support Levy under subsection (2) of section 3A of this Act, may request the Commissioner (Inland Revenue) to exercise powers of recovery in the same manner as income tax arrears under Part IV of Chapter X of the Income Tax Ordinance, 2001 (XLIX of 2001) or rules made thereunder in this behalf:

Provided that the Commissioner (Inland Revenue) shall have no authority to grant extension of time to the notice of recovery or allow payments of outstanding levies under this Ordinance including late payment surcharge in instalments of equal or varying amounts.

(2) The relevant department under sub-section (2) of section 3A of this Act, as it deems fit and proper, may either, separately or simultaneously, initiate recovery of the Petroleum Levy and Climate Support Levy, or, the late payment surcharge, as the case may be.

(3) Any irregularity or infirmity in the recovery proceedings under this section shall not be grounds of challenge before a tribunal or courts of law.

(4) The Commissioner (Inland Revenue) shall be bound to submit a report every fortnight to the divisions concerned to whom subjects of finance and petroleum are allocated under the Rules of Business, 1973

on the progress of recovery proceedings, and failure to recover the amounts due shall be explained in writing.

(5) Prior to commencement of the Finance Act, 2026, where any amount of the Petroleum Levy and Climate Support Levy or the late payment surcharge are due under sections 40B and 40D of the Public Finance Management Act, 2019, it shall be recoverable under this section.”;

4. after section 4, the following new section (4A) shall be inserted, namely:- “4A. Mandatory reporting mechanism for petroleum levy and climate support levy payments.- (1) Every company, refinery or licensee under this Ordinance shall submit monthly statement regarding the payment of the Petroleum Levy and Climate Support Levy on sale of petroleum products. The statement shall be supported by documentary evidence including monthly sales invoice submitted to the Federal Board of Revenue established under the Federal Board of Revenue Act, 2007 (Act No. IV of 2007) including any other document required by the relevant department from time to time.

(2) Every company, refinery or licensee under this Ordinance shall furnish an annual audited certificate to the Petroleum Division, issued by the Authorized Audit Firm, certifying the accuracy of the levy and or levies accrued and paid under this Ordinance.

Explanation: For purposes of this section, Authorized Audit Firm means an audit firm registered with the Audit Oversight Board under the Securities and Exchange Commission of Pakistan Act, 1997 (XLII of 1997).

• (3) The costs and expenses of such audit shall be borne solely by the

relevant company, refinery or licensee.”;

5. Omission of the Second Schedule, Ordinance XXV of 1961.- In the said Ordinance, the Second Schedule shall be omitted.

6. Omission of the Fourth Schedule, Ordinance XXV of 1961.- In the said Ordinance, the Fourth Schedule shall be omitted.

7. The Customs Act, 1969 (IV of 1969).- In the Customs Act, 1969 (IV of 1969), the following further amendments shall be made, namely: -

   • (1) in section 2, after clause (ssss), a new clause shall be added, namely: - “( ssssa ) “ State warehouse ” means any place authorized by the Collector of Customs to store the detained, seized or confiscated goods, as the case may be”;

   • (2) in section 19, in sub-section (5), in the second proviso, for the figure “2026”, the figure "2027" shall be substituted;

   • (3) in section 32, -

     • (a) in sub-section (3), in the first proviso, the words “in a case” shall be omitted; and

     • (b) in sub-section (3A), in the proviso, the words “in a case” shall be omitted;

   • (4) in section 80, in sub-section (4), -

     • (a) after the word “examined”, a comma shall be inserted and thereafter the word “scanned” shall be inserted; and

     • (b) in the proviso, after the word “examined”, the words “or scanned” shall be inserted;

   • (5) in section 82, -

• (a) in sub-section (1), -

  • (i) for the words “Federal Government”, the word “Board” shall be substituted; and

  • (ii) in the first proviso, after the word “waive”, the words “or reduce” shall be inserted and for the full stop at the end a colon shall be substituted and thereafter the following new proviso shall be added, namely: -

    • “Provided further that the Board may notify the

    • rules to regulate the implementation of above provisions, including the process of appeal against imposed penalties and the Customs stations, goods or class of goods, where the provisions of sub-section (1) shall not be applicable.”; and

• (b) in sub-section (2), after the fifth proviso, the following new proviso shall be added, namely; -

“Provided also that the Board may authorize any person, to auction any auctionable goods, in the manner as notified by the Board.”;

• (6) in section 156, in sub section (1), in the Table. -

  • (a) against S.No. 7A, in the third column, for the words “five hundred thousand”, the words “ten million” shall be substituted;

  • (b) after S.No.62, the following S.No. shall be added, namely: -

• (c) against S.No. 83, in the second column, for the existing entry, the following shall be substituted, namely: -

“If an officer of any authority who is duty bound under section 170 to deposit the impugned goods with customs, neglects so to do.”;

• (7) in section 157, after sub-section (2), the following explanation shall be added, namely: -

“Explanation : - The word “removal” includes, and shall be deemed to have always included, every act of carrying, transporting, depositing, harbouring, keeping, concealing, retailing, or any other act involving movement of smuggled goods.”;

• (8) for section 170, the following shall be substituted, namely: -

“ 170. Procedure in respect of goods seized or detained by other authorities.- Notwithstanding anything contained in any other law for the time being in force, when any goods liable to confiscation under this Act are detained or seized by any other authority on any violation,

irrespective of any pending proceedings under the laws of that authority, the customs authorities upon confirmation that such goods are liable to confiscation shall intimate that authority in writing and that authority shall be bound to deposit the impugned goods with customs for further processing under this Act.”;

• (9) in section 179, after sub-section (5), the following sub-section shall be added, namely: -

“(6) Notwithstanding anything contained in this Act, or any other law for the time being in force, the Board may notify a procedure for faceless adjudication whereby adjudication proceedings shall be conducted without any face-to-face interaction between the adjudicating officer and the respondent. The virtual mode shall be in such manner as may be prescribed by the Board from time to time.”;

• (10) in section 185A, after sub-section (5), the following sub-section (6) shall be added, namely: -

“(6) Where a Special Judge during trial of an offence punishable under this Act, is satisfied that there is any reasonable grounds for believing that the accused has committed an illegal transfer of funds into or out of Pakistan, he may order the freezing of the assets of the accused, whether in his possession or in the possession of any other person on his behalf.”;

• (11) after section 196J, the following section shall be added, namely; -

“196JJ. Independent case scrutiny committee.- (1) Any Civil petition,

reference, civil petition for leave to appeal or review petition before the High Court, the Federal Constitutional Court or the Supreme Court of

Pakistan shall only be filed by the Collector or Director of Customs, or any officer of Customs not below the rank of Deputy Collector or Deputy Director authorized by the Collector or Director of Customs, in writing, subject to approval by an independent case scrutiny committee, as constituted by the Board under sub-section (3).

(2) The Board may constitute one or more such committees and assign them jurisdiction which shall exercise the powers and functions in a manner, and from the date, as may be notified by the Board.

(3) The independent case scrutiny committee shall comprise

of the following Members, namely: -

• (a) a retired judge of superior judiciary who shall also act as Chairman of the Committee;

(b) an advocate having not less than fifteen years of experience in customs and commercial litigation before the High Court or Supreme Court of Pakistan; and

• (c) a serving or retired officer not below the rank of Director or Collector of Customs.

(4) The members shall receive such renumeration as may be prescribed by rules.

(5) Recommendations of the committee shall be binding upon the concerned Collector or Director of Customs.

• (6) No suit, prosecution or other legal proceedings shall lie

against the members of the committee in relation to the decisions made under this section.”;

• (12) in section 215, in clause (c), for the full stop at the end, the expression “ ;or ” shall be substituted and thereafter the following new clause shall be added, namely: -

  • “(d) in the manner prescribed for service of a summons under the Code of Civil Procedure, 1908 (Act V of 1908).”;

• (13) The amendment set out in the First Schedule to this Act shall be made in the First Schedule to the Customs Act, 1969 (IV of 1969): and

• (14) The Fifth Schedule to the Customs Act, 1969 (IV of 1969), shall be substituted in the manner provided for in the Second Schedule to this Act.

5. Amendments in the Sales Tax Act, 1990.- In the Sales Tax Act, 1990 (VII of 1990), the following further amendments shall be made, namely: -

   • (1) in section 2,-

     • (a) after clause (1A), the following new clauses shall be inserted, namely:-

       • “(1AA) “advance receipt invoice” means an invoice in the format as may be notified by the Board from time to time;

(1AAA) “algorithmic settlement mechanism” means algorithmic settlement mechanism provided under section 26AAA of this Act”

(b) after the omitted clause (9AA), the following new clause shall be inserted, namely:-

• “(9AB) “electronic invoicing system” means such electronic system or mechanism as may be prescribed or approved by the Board for issuance and recording of sales tax invoices in electronic form;”;

(c) after clause (17), the following new clause shall be inserted, namely:-

• (17A) “National faceless centre” means National faceless centre as defined in section 32C of the Act;”;

• (d) after clause (22), the following new clause shall be inserted, namely:-

“(22)(1A) “production monitoring system” means any system or technology, used for the purposes of monitoring production and sale of goods, whether in real-time or otherwise, including such systems or technologies as may be prescribed by the Board from time to time;

• (e) in clause (43A),-

  • (i) in sub-clause (d), after the expression, “wholesaler-cumretailer”, the expression “having turnover more than two hundred million” shall be inserted;

  • (ii) sub-clauses (f) and (g) shall be omitted;

  • (iii) after omitted sub-clause (ga), the following new sub-clause shall be inserted, namely:-

“(gb) a retailer having turnover exceeding two hundred

million rupees either by way of declaration or from worked back value of turnover from tax deduction

under section 236G or 236H of Income Tax Ordinance, 2001 (XLIV of 2001) during the immediately preceding twelve consecutive months; and” and

(iv) in sub-clause (h), for full stop at the end, a colon shall be substituted and thereafter the following proviso shall be added, namely:-

“Provided that the Board may also exclude any person or class of persons through a notification in the official gazette.”.;

(f) in clause (44), after sub-clause (a), the following explanation shall be added, namely:-

“ Explanation.- For the removal of doubt, the term goods are delivered or made available mean the goods become ready for dispatch from the business premises including but not limited to factory, warehouse, godown or branch.”; and

(g) in clause (46), in sub-clause (j), in the first proviso, at the end, for the colon, the full stop shall be substituted and thereafter the following expression shall be added, namely:-

“For this purpose of valuation, the Board may use the valuation of such goods as notified by Pakistan Bureau of Statistics immediately before the start of tax period. The Board may also where deems fit outsource the functions of valuation of goods to third party in the mode and manner as may be prescribed:”;

• (2) in section 6, in sub-section (2), after the first proviso, for full stop at the end, a colon shall be substituted and thereafter the following new proviso shall be added, namely:-

“Provided further that in the case of steel melters, steel re-rollers and composite units, the tax shall be collected on the basis of per unit electricity consumption at the rate as prescribe by the Board, through notification in the official Gazette. The tax so collected shall be adjustable and the excess amount, if any, shall be refunded on monthly basis through Board’s automated refund system to those registered persons who integrate with the Board’s prescribed production monitoring and digital invoicing systems.”;

• (3) in section 8B, in sub-section (1), in the second proviso, for full stop at the end, a colon shall be substituted and thereafter the following new proviso shall be added, namely:-

“Provided further also that the Board may by notification in the official Gazette, reduce or enhance the limit provided in this sub-section for any registered person on the basis of compliance or non-compliance with the production monitoring, digital invoicing, e-bility, POS, or any other electronic system prescribed by the Board for digital integration of data.”;

• (4) in section 9, for full stop at the end, a colon shall be substituted and thereafter the following proviso shall be added, namely:-

“Provided that the issuance of debit and credit notes shall be governed by the mechanism including electronic adjustments, as may be prescribed by the Board.”;

(5) after section 11G, the following new section shall be inserted, namely:- “11H. Faceless audit and assessment.- (1) Notwithstanding anything to the contrary contained in any other provision of this Act, any audit under sections 25 and 72B, any order made under section 11E, and rectification under section 57 with respect to the cases referred to in subsection (2), may be made in a faceless manner as may be prescribed by the Board from time to time.

• (2) The faceless assessment under sub-section (1) shall be made in respect of such persons or class of persons, or incomes or class of incomes, or cases or class of cases, as may be specified by the Board.

(3) The provisions of section 25 shall apply to the audit conducted in faceless manner under this section:

Provided that where opportunity of being heard is to be provided to the taxpayer during the course of this audit or a statement under oath is required to be obtained from a taxpayer or any other person under section 37 of this Act, the same shall be done through E-hearing:

Provided further that the identity of the officer, including facial and voice identity, conducting such E-hearing shall be kept confidential.”;

• (6) in section 21, in sub-section (2), after the word “invoices”, the expression “, has committed non-compliance of sub-sections (5) and (6) of section 23 or section 40C” shall be inserted;

• (7) in section 23, in sub-section (1),-

  • (i) for the words “supply shall issue a serially numbered tax invoice”

the expression “as well as exempt supply shall issue a tax invoice

including an advance receipt invoice, bearing a verifiable and unique FBR invoice number” shall be substituted; and

• (ii) in clause (b), after the Explanation, for the existing provisos, the following shall be substituted, namely:-

“Provided that the Board may notify any person or class of persons who may be allowed to issue an advance receipt invoice within the notified system:

Provided further that the condition of verifiable and unique FBR invoice number shall be applicable from a time as notified by the Board.”;

• (8) in section 25,-

  • (i) after sub-section (8), the following new sub-sections shall be inserted, namely:-

“(8A) If, at any stage of the proceedings before him, if the Commissioner is of the opinion that having regard to, -

• (a) the nature and complexity of the accounts; or

• (b) volume of the accounts; or

• (c) doubts about the correctness of the accounts; or

• (d) multiplicity of transactions in the accounts; or

• (e) specialized nature of business activity of the registered person, and interests of the revenue, is of the opinion that it is necessary so to do, he may, after giving the registered person a reasonable opportunity of being heard, and with the previous approval of the Chief Commissioner, direct

the registered person to get either any or all of the following:-

• (i) accounts re-audited by an accountant, and to furnish a report of such audit duly signed and verified by such accountant including answers to the specific queries as the Commissioner may require; or

• (ii) inventory re-valued by a cost accountant, and to furnish a report of such inventory valuation duly signed and verified by such cost accountant including answers to the specific queries as the Officer of Inland Revenue may require;

  • Explanation: - The accountant or the cost accountant, as referred to in this sub-section shall be nominated by the Commissioner for the purposes of the said sub-section from amongst the panel of such accountants or cost accountants nominated by the Board.”; and

(8B) After completion of the audit, the officer of Inland Revenue shall, after obtaining the registered person’s explanation on all the issues raised in the audit, issue an audit report containing audit observations and finding.”;

(ii) in sub-section (9), for the words “completion of the audit”, the words “issuing the audit report” shall be substituted; and

• (iii) in sub-section (11),-

• (a) for the words “wishes to deposit”, the word “deposits” shall be substituted; and

• (b) in the second proviso, for the words “full amount”, the words “fifty percent” shall be substituted;

(9) after section 30A, the following new section shall be inserted, namely:- “30AA. Faceless jurisdiction. - (1) Notwithstanding anything contained in this Act, the Inland Revenue tax authorities appointed in National faceless center shall perform all or such functions, and exercise all or such powers under this Act as may be assigned to them in respect of such persons, or classes of persons, for such tax periods of a person through algorithms developed by the Board.

• (2) The jurisdiction so assigned may be exclusive or concurrent.

(3) The Board may transfer jurisdictions in respect of persons or classes of persons, for a specific tax period, for which the jurisdiction has already been assigned under this section, from National faceless center to the officer of Inland Revenue having jurisdiction under section 30 of this Act, on the recommendation of the Chief Commissioner or on its own accord.

(4) The Chief Commissioner appointed in the National faceless center may request the Board to direct the officer of Inland Revenue having jurisdiction under section 30 or any other Authority under this Act, as it may deem fit, to conduct physical verification including nature and size of the business, assets, investments, expenditures, and any other information or verification required by the Chief Commissioner for conducting any proceedings assigned to the National faceless centre:

Provided that the Board may exercise its power of allocation of verification through an algorithm based system.

(5) Notwithstanding anything contained in any law for the time being in force, the identity of the authority exercising jurisdiction in the National faceless centre shall be kept confidential from the registered person, the authorized representative of the registered person, and any unauthorized person.

(6) No notice, order , or other communication by an authority appointed at the National faceless centre shall be called in question or set aside merely on the ground that such authority did not have jurisdiction over the taxpayer under section 30 of this Act, or lack of notified delegation of power under section 32 of this Act, or because of the fact that identity of the authority has been kept confidential from the taxpayer as per sub-section (5).”;

• (10) after section 30DDDA, the following new section shall be inserted, namely:-

“30DDDB. Directorate General (Field Compliance) Inland Revenue.- (1) The Directorate General (Field Compliance) Inland Revenue shall consist of a Director General and as many Directors, Additional Directors, Deputy Directors, Assistant Directors and such other officers as the Board may, by notification in the official Gazette, appoint.

• (2) The Board may, by notification in the official Gazette,--

  • (a) specify the functions and jurisdiction of the Directorate General and its officers; and

• (b) confer the powers of authorities specified in section 30

upon the Directorate General and its officers.”

• (11) after section 32B, the following new section shall be inserted, namely:-

“32C. National faceless centre.- (1) Notwithstanding anything to the contrary contained in any of the provisions of this Act, the Board may, for the purposes of proceedings under this Act in faceless manner, establish a National faceless center (hereinafter referred to as “the Centre”) and specify its jurisdiction, powers, and functions.

• (2) The centre shall comprise a Director General and as many officers of Inland Revenue along with support staff, as the Board may deem fit for the purposes of this section.

• (3) The Board may design algorithms for assigning any function or jurisdiction under this section to any of the authorities mentioned in subsection (2).

• (4) The centre shall comprise as many wings and units as may be prescribed by the Board.

(5) The functions of audit, assessment, and quality control in a specific case for a specific tax period shall be performed by separate officers.

(6) All communications, among the units, or with the registered person, or an authorized representative of the registered persons, or with any other person with respect to the information or documents or evidence or any other details, as may be necessary, shall be through electronic means.”;

• (12) in section 33, in the Table, in column (1),-

• (a) against S. No. 1, in column (2),-

  • (i) for the word "ten ", the word "fifty " shall be substituted; and

  • (ii) in the proviso, for the word " hundred", the word " thousand " shall be substituted;

• (b) against S. No. 2, in column (2), for the expression "five thousand rupees or three per cent", the expression "twenty-five thousand rupees or five per cent" shall be substituted;

• (c) against S. No. 3, in column (2),-

  • (i) for the word "ten ", the word "fifty" shall be substituted; and (ii) for the word "five", the word "ten" shall be substituted;

• (d) against S. No. 5, in column (2),- (i) for the expression "ten thousand rupees or five per cent of the amount of the tax involved, whichever is higher", the expression "fifty thousand rupees or five per cent of the amount of the tax involved, whichever is higher" shall be substituted; and

  • (ii) in the first proviso, for the word " hundred", the word "thousand" shall be substituted;

• (e) against S. No. 7, in column (2), for the word "ten", the word "fifty" shall be substituted;

• (f) against S. No. 8, in column (2), for the word "ten", the word "fifty" shall be substituted;

• (g) against S. No. 25, in column (1) and entries related thereto in column (2), the following shall be substituted, namely:-

(h) after S. No. 28, the following new S. Nos. and entries relating

thereto in columns (1), (2) and (3) shall be added, namely:-

proximate tax period, and such mismatch is confirmed after issuance of notice and provision of opportunity of being heard. 31. Where a Such person shall pay 7, 8A, 33 registered person a penalty of twenty per (S.No.29) has claimed input tax cent of the unreversed credit on the basis of input tax credit, in invoices issued by a addition to the reversal person who is of such credit and subsequently placed default surcharge on the simulated under section 34. invoice issuers register under S. No. 29, and such registered person fails to reverse the inadmissible input tax credit within sixty days of the listing of

the invoice issuer on the register.

• (13) in section 40C,-

  • (a) for sub-sections (2) and (3), the following shall be substituted, namely:-

    • “(2) From such date as may be prescribed by the Board, no taxable goods shall be removed or sold by the manufacturer or any other person unless such goods are affixed with tax stamps, band role stickers or labels are monitored through a Production Monitoring System, video analytics or any other prescribed monitoring mechanism, etc. in any such form, style and manner as may be prescribed by the Board in this behalf;

    • (3) Such tax stamps, banderols, stickers, labels, barcodes, production monitoring equipment etc., shall be acquired by the registered person referred to in sub-section (2) from a licensee appointed by the Board.”; and

  • (b) after the omitted sub-section (5), the following new subsection shall be added, namely:-

“(6) Any taxable goods in respect of which monitoring, tracking or identification has been prescribed under this Act or rules made thereunder, which are manufactured, produced, removed, transported, supplied or otherwise

dealt with or without affixing the prescribed tax stamps, banderoles, stickers, labels, barcodes or without compliance with the prescribed monitoring system, shall be liable to seizure and confiscation in the prescribed manner, along with the conveyance used for the movement, carriage or transportation of such goods.”;

(14) after section 40E, the following new section shall be inserted, namely:-

“40F. Sale of c onfiscated goods by auction.- (1) Where any goods liable to confiscation under any provision of this Act have been confiscated, these goods, without prejudice to other action specified against such goods, shall be sold by public auction.

(2) The goods may be sold under sub-section (1) through electronic means, as prescribed by the Board.

(3) For the purpose of sub-sections (1) and (2) of this section, the Board shall be bound by Public Procurement Regulatory Authority Rules, 2014.

(4) The sale proceeds shall be applied to the following

purposes in their respective order, namely:-

• (a) first to pay the expenses of the sale;

(b) then to pay the sales tax, other taxes and

dues including penalty and surcharge payable to the Federal Government in respect of such goods; and

(c) the balance in respect of confiscated goods excluding those liable for outright confiscation, if any, shall be paid to the owner of the goods, provided he applies for it within six months of the sale of the goods failing which the balance amount shall be deposited into government treasury:

Provided that, in case wherein goods declaration has been filed, the share of importer in sale proceeds shall not exceed the declared value of the goods.”;

• (15) after section 45B, the following new section shall be inserted, namely:-

“45C. Faceless appeals. - (1) Notwithstanding anything contained in this Act, any appeal filed under section 45B of this Act may be processed through the National faceless center as may be prescribed by the Board.

(2) The provisions of section 45B of this Act, shall apply to faceless appeals accordingly.

• (16) after section 47A, the following new sections shall be inserted, namely: -

“47AA. Algorithmic settlement mechanism.- (1)

Notwithstanding anything contained in this Act, the Board may establish digitally operated algorithmic settlement mechanism (hereinafter referred to as "the mechanism") for settlement of tax

proceedings at any stage before any order under sections 11D or 11E of the Act.

(2) In case, the mechanism calculates and presents to the registered person a settlement offer as per the criteria provided under sub-section (3), the registered person may avail the offer as provided in sub-section (4).

(3) The system generated settlement offer shall be calculated

on the basis including but not limited to:

• (a) the stage of proceedings at which settlement is offered;

• (b) the registered person’s compliance history, as maintained in FBR's data;

• (c) the nature and character of the discrepancy; and

• (d) any other basis the Board may consider relevant.

(4) A registered person who opts to avail this mechanism shall within ten days from the date of settlement offer to accept the settlement offer on IRIS and deposit the settlement offer amount. (5) The issues confronted to the registered person, if any, through a notice or an audit report under this Act shall stand abated if the registered person deposits the settlement amount as provided in sub-section (4).

(6) Payment of tax consequent upon acceptance of offer under sub-section (4) of this section shall not preclude proceedings in respect of any other issue or discrepancy not

covered by the settlement offer, nor shall it affect proceedings for any other tax period.

“47AAA. Independent case scrutiny committee. - (1) A reference under section 47 before the High Court, or an appeal or review before the Federal Constitutional Court or the Supreme Court of Pakistan, as the case may be, shall only be filed by the Commissioner Inland Revenue after the same has been approved by an independent case scrutiny committee as constituted by the Board.

(2) The Board may constitute one or more such committees and assign ed them cases or classes of cases decided by the Appellate Tribunal Inland Revenue or the High Court as the case may be.

(3) The Committee shall comprise of the following Members as nominated by the Board -

• (a) a retired judge of Supreme Court of Pakistan, the Federal Constitutional Court, or any of the High Courts of Pakistan who shall also act as Chairman of the Committee;

• (b) an Advocate having not less than fifteen years of experience in tax and commercial litigation before the High Court or Supreme Court of Pakistan, to be nominated from a panel notified by the Board from time to time; and

(c) a senior serving or retired officer of the FBR (BS 20

or above).

• (4) The powers, functions, and procedure of the Committee

along with remuneration of its Members shall be governed as prescribed.

• (5) Recommendations of the committee shall be binding upon the Commissioner Inland Revenue having jurisdiction over the case.

(6) Notwithstanding anything contained in any other law for the time being in force, no suit, prosecution, or other legal proceedings shall lie against the Members of the Committee and the Commissioner Inland Revenue having jurisdiction over the case, in relation to the decisions made under this section.;

(7) The Committee constituted under this sub-section shall

exercise its powers and functions with effect from the date of its constitution as notified by the Board.”;

• (17) in section 56B, after sub-section (2), the following new subsection shall be added, namely:-

“(3) Notwithstanding anything contained in sub-section (1), the Board shall have the power to share data contained in Sales Tax returns of registered persons belonging to a sector amongst all registered persons of the same sector under strict non-disclosure agreements to create market equity and to enhance tax compliance subject to such limitations, restrictions and conditions as may be specified by the Board.”;

• (18) in the Third Schedule, in the Table, in column (1), after Serial No.

  • 55, the following new Serial Nos. and entries relating thereto in

columns (2) and (3) shall be added, namely:-

Note: Where the Federal Government has notified that the sales tax shall be charged, levied and paid at a rate higher than eighteen percent, the same rate shall continue to be charged, levied and paid after their inclusion under the Third Schedule.

• (19) in the Sixth Schedule,

  • (a) in Table-1, in column (1),-

    • (i) for Serial No. 32 and entries relating thereto in columns (2) and (3), the following shall be substituted,

namely: -

• (ii) against serial number 157, in corresponding column

  • (2), for the expression “2026”, the expression “2027” shall be substituted;

• (iii) for serial number 181, and corresponding entries relating thereto in columns (2) and (3), the following

shall be substituted, namely:-

• “181. Import or lease of aircrafts and 8802.1200 parts thereof by Pakistan 8802.3000 8802.4000

(iv) after Serial No 181, the following new Serial Nos. and

entries relating thereto in columns (2) and (3) shall be

added, namely: -

(b) in Table-3, in Annexure, in column (1), after Serial No 22, the following new Serial Nos. and entries relating thereto in columns

(2), (3) and (4) shall be added, namely:-

• (20) in the Eighth Schedule, in Table: -

  • (a) against serial No. 71, in column (2), for the words “30th June, 2026”, the words “30th June, 2027” shall be substituted; and

  • (b) for serial No. 80 in column (1), and corresponding entries relating thereto in columns (2), (3) and (4), the following shall be substituted, namely: -

(21) in the Eleventh Schedule, in the Table, in column (1), -

• (a) against serial No. 4, in column (2), after the word “companies”, a comma shall be added, and thereafter the words “association of persons and individuals” shall be added; and

• (b) after S. No. 13, the following new S. No. and entries relating thereto in columns (2), (3) and (4) shall be added,

namely:-

• (22) in the Twelfth Schedule, after the Table, under the heading, “Procedure and Conditions”, in clause (2), after sub-clause (i), a colon shall be added and thereafter the following provisos shall be inserted, namely: -

“Provided that the manufacturer shall be liable to pay 3% value addition tax on ad valorem basis, along with default surcharge in case the imported goods are supplied in the same state whether in the same packing, repacked, or in bulk:

• Provided further that where-

• (i) benefit of waiver of 3% value addition tax is availed, declaring that the goods are imported for in-house consumption in manufacturing process;

• (ii) such imported goods are not used for in-house consumption;

(iii) imported goods are supplied in the same state whether in the same packing, repacked, or in bulk; and

(iv) such supply exceeds 50% of total imports in a financial year;

such person will be liable to prosecution.”.

6. Amendments in the Income Tax Ordinance, 2001 (XLIX of 2001). - In the Income Tax Ordinance, 2001 (XLIX of 2001), the following further amendments shall be made, namely: -

• (1) in section 2, -

  • (a) after clause (1A), the following new clause shall be inserted,

namely: -

“(1AA) “algorithmic settlement mechanism” means algorithmic settlement mechanism provided under section 134B of this Ordinance;”;

(b) in clause (5), for the words “and amended assessment”, the expression “, amended assessment and faceless assessment” shall be substituted;

• (c) after clause (6), the following new clause shall be inserted, namely: -

  • “(6A) “authorised shipping agent” means a person in Pakistan who is authorised, expressly or impliedly, by a nonresident ship owner, charterer or operator to act on its behalf in respect of a vessel, and who in relation to such

vessel or voyage -

• (a) is responsible for the receipt, collection, control or accounting of total freight and any related amounts, and undertakes or is responsible for documentation, manifest filing, or reporting of cargo or total freight, including having, directly or indirectly, the control, custody or disposal of any freight or related receipts attributable to such vessel or voyage; and

• (b) furnishes the return under section 143 of this Ordinance, in respect of such vessel or voyage and such person shall, for the purposes of this Ordinance -

  • (i) be treated as the representative of the nonresident under section 172;

  • (ii) be jointly and severally liable for payment of tax and all obligations, proceedings, assessments and recovery in respect of such vessel or voyage; and

(iii) be treated as such, and the provisions of sub-section (3) of section 172 shall apply accordingly;”;

(d) after clause (19D), the following new clause shall be inserted, namely:- “(19DA) “electronically readable format" means any digital format in which data is structured so that it can be automatically read, extracted, validated and

processed by computer systems without human intervention, including spreadsheet formats (such as CSV or XLSX), XML, XBRL, JSON, and other structured or semi-structured data formats but excluding formats primarily designed for human readability, such as PDF, scanned images or photographs;";

• (e) clause (22A), shall be omitted;

• (f) in clause (30A), for the expression “Board through approved fiscal electronic device and software”, the expression “Board’s computerized system through a licensed integrator” shall be substituted;

• (g) after clause (30C), the following new clause shall be inserted, namely:-

“(30D) “Licensed integrator” shall have the same meaning as defined under clause (15A) of section 2 of the Sales Tax Act, 1990 (VII of 1990);

• (h) after clause (35A) the following new clause shall be inserted, namely:-

“(35)(1A) “National faceless center” means National faceless center as defined in section 227D of this Ordinance;”;

• (i) after clause (42A), the following new clause shall be inserted, namely:-

  • “(42AA) “PRAL” means Pakistan Revenue Automation (Pvt) Limited, a State Owned Enterprise which has been assigned

functions related to software development and maintenance of the Board’s IT infrastructure;”; and

• (j) clause (60) shall be omitted;

• (2) in section (4AB), - (a) in the heading, for expression “(4AB), the expression “4AB” shall be substituted; and

(b) in the proviso, for the words “a surcharge shall be payable at the rate of nine percent of the income tax imposed under Division I of Part I of the First Schedule where the income exceeds rupees ten million in a tax year”, the expression “no surcharge shall be payable.”; shall be substituted;

(3) in section 6A, after sub-section (2), the following new sub-section shall be added, namely:-

“(3) Notwithstanding the provisions of section 8, the tax imposed under this section on a person, whose turnover in a tax year exceeds two hundred million rupees shall be adjustable.”;

• (4) section 7E shall be omitted;

(5) after section 7F, the following new section shall be inserted, namely: -

“ 7G. Tax on certain payments by life insurance business. - (1) For tax year, 2026 and onwards, a tax shall be imposed, at the rate specified in Division IC of Part III of the First Schedule on every individual who receives any payout, benefit, surrender value, maturity proceeds or similar payment (hereinafter referred to as payout) from a life insurance business on account of insurance policy, family takaful certificate, plan or any similar arrangement.

(2) For the purposes of sub-section (1), the amount liable to tax shall be the gross amount of payout reduced by aggregate amount of premiums or contributions paid by the policy holder or participant.”;

(3) The provisions of sub-section (1) shall not apply where the payout or benefit is made-

• (a) on account of death of the insured or participant;

• (b) on account of disability of the insured or participant; or

(c) after completion of seven years from the date of issuance of the policy, certificate or plan.

(4) Tax deducted under this section shall be treated as final

tax on the income arising from such payout or benefit.”;

• (6) in section 8, -

  • (a) in the heading, for the expression “7E”, the expression “7G” shall be substituted; and

  • (b) in sub-section (1), for the expression “7E”, wherever occurring, the expression “7G” shall be substituted;

• (7) in section 21, for clause (r), the following shall be substituted, namely: - “(r) up to five percent of the expenditure claimed by any person, who fails to install electronic resource or to act as an integrated enterprise as required by law, subject to the method, manner, and procedure as may be prescribed;”;

• (8) after section 53, the following new section shall be inserted, namely:-

  - “ **53A. Rationalization of rates of withholding taxes in the nature of minimum tax** . - (1) The Federal Government may reduce the rate of any of the withholding taxes in the nature of minimum tax as given in First Schedule of this Ordinance, other than minimum tax chargeable under section 113 of this Ordinance, up to 1% on the basis of economic viability in cases of persons or class of persons, subject to such restrictions and limitations as the Federal Government may specify.

(2) The Federal Government shall place before the National Assembly all amendments made in rates of withholding taxes in the First Schedule, in a financial year under this section.”;

• (9) for section 64D, the following shall be substituted, namely: -

“ 64D. Tax credit for integration. - (1) Any person required, under this Ordinance, the Sales Tax Act, 1990 or the Federal Excise Act, 2005, to integrate with the computerized system of the Board for realtime production monitoring, or for the recording or reporting of sales or receipts, shall be entitled to a tax credit in respect of expenditure incurred exclusively on the purchase, acquisition, installation or implementation of such equipment, hardware, software or other electronic components as are directly and exclusively utilized for the purposes of such integration:

Provided that the Board may prescribe limitations, conditions, and restrictions for availing the tax credit under this section.

(2) The amount of tax credit allowed under sub-section (1) for a tax year in which electronic resource is installed, integrated and configured with the Board's computerized system shall be ten percent of the amount actually invested in the electronic resource.

(3) Such tax credit shall not be allowable against operation and maintenance expenses related to such electronic resource.

(4) This tax credit shall be available only against normal tax payable under Division I or Division II of Part I of the First Schedule.”;

(10) in section 76, after sub-section (8), a new sub-section (8A) shall be added:

“(8A) Where an immovable property is acquired by an individual through inheritance, the cost of such property in the hands of that individual shall be the fair market value of the property as provided under sub-section (5) of section 68 of this Ordinance on the day of the death of the original owner.”;

• (11) In section 79, in sub-section (1), in clause (b), the following explanation shall be insertred, namely: -

“Explanation: For the removal of doubt it is clarified that transmission of an asset, in the nature of immovable property, to a beneficiary on the death of a person shall also include the transmission of assets by reason of family settlement amongst the family members consequent upon death of the person.”;

• (12) in section 80, in sub-section (2), in clause (a), after the word “person”, the expression “, limited liability partnership” shall be inserted;

• (13) in section 92, -

  • (a) in sub-section (1), the explanation shall be omitted; and

  • (b) after the omitted sub-section (4), the following new sub-section shall be inserted, namely: -

“(4A) Where the income of a limited liability partnership is exempt from tax, the amount received by a member of a limited liability partnership in the capacity as a member of such partnership shall be taxable in the hands of the member of such partnership.”;

• (14) in section 99B, for the expression “and payment of tax, filing of return”, the expression”, rate and payment of tax including fixed tax, filing of return, audit” shall be substituted;

• (15) in section 100B, -

  • (a) in sub-section (2), -

    • (i) in clause (b), the expression “, a non-banking finance company,” shall be omitted and after the semicolon at the end, the word “and” shall be added; and

    • (ii) clauses (c) and (d) shall be omitted;

  • (b) after sub-section (2), amended as aforesaid, the following new sub-section shall be added, namely: -

“(3) NCCPL, in case of banking company, insurance company and mutual funds shall compute and determine the capital gain as per the mechanism prescribed under section 37A, however, these entities shall continue to deposit tax on amount of capital gain as per the applicable provisions of this Ordinance.”;

• (16) in section 114, -

(a) for sub-section (2A), the following shall be substituted, namely: - “(2A) A return of income shall be filed electronically on IRIS as may be prescribed by the Board for the purpose of subsection (1) and sub-section (1A) of this section and the Board may, by notification in the official Gazette, make rules for such filing and determine the process of verification, digital signatures and other matters relating to electronic filing of returns, statements or documents, etc.:

Provided that in case of companies for tax year, 2026 and onwards the financial statements accompanying the return shall only be filed in electronically readable file format.”;

• (b) in sub-section (6), after the word “therein”, the expression, “or avails a settlement offered by algorithmic settlement mechanism” shall be inserted

• (c) after sub-section (6A), the following new sub-section shall be inserted, namely:-

“(6B) Notwithstanding anything contained in sub-sections (6) and (6A) of this section, if a taxpayer avails a settlement offered by the algorithmic settlement mechanism, he may file a revised return, and the -

(a) approval of Commissioner shall not be required to file the revised return;

(b) taxpayer shall pay the amount of tax determined by the mechanism and no separate penalty or default surcharge shall be payable; and

(c) return so filed shall be accompanied by such documents as required under sub-section (6) and shall be treated as revised return under this section.”;

• (17) after section 122D, the following new section shall be inserted, namely:

“122E. Faceless audit and assessment. - (1)

Notwithstanding anything to the contrary contained in any other provision of this Ordinance, any audit under sections 177 or 214C, any order made under section 111, any assessment under this Part and rectification under section 221, with respect to the cases referred to in sub-section (2), may be made in a faceless manner as may be prescribed by the Board.

(2) The faceless assessment under sub-section (1) shall be made in respect of such persons or class of persons, or incomes or class of incomes, or cases or class of cases, as may be specified by the Board.

(3) The provisions of section 177 shall apply to the audit conducted in faceless manner under this section:

Provided that where opportunity of being heard is to be provided to the taxpayer during the course of this audit or a statement under oath is required to be obtained from a taxpayer or any other person under section 176 of this Ordinance, the same shall be done through E-hearing under section 227E of this Ordinance:

Provided further that the identity of the officer, including facial and voice identity, conducting such E-hearing shall be kept confidential.”;

• (18) after section 129, the following new section shall be inserted, namely, -

“129A. Faceless appeals. - (1) Notwithstanding anything contained in this Ordinance, any appeal filed under section 127 may be processed through the National faceless center as may be prescribed by the Board.

(2) The provisions of sections 127, 128, and 129 of this Ordinance, shall apply to faceless appeals accordingly.”;

• (19) after section 133, the following new section shall be inserted, namely: -

“ 133A. Independent case scrutiny committee. - (1) A reference under section 133 of this Ordinance before the High Court, or an appeal or review before the Federal Constitutional Court or the Supreme Court of Pakistan shall only be filed by the Commissioner Inland Revenue after the same has been approved by an independent case scrutiny committee as constituted by the Board.

(2) The Board may constitute one or more such committees and assign them cases or classes of cases decided by the Appellate Tribunal Inland Revenue or the High Court, as the case may be.

(3) The Committee shall comprise of the following Members as nominated by the Board -

(a) a retired judge of the Supreme Court of Pakistan, the Federal Constitutional Court, or any of the High Courts of Pakistan who shall also act as Chairman of the Committee;

(b) an Advocate having not less than fifteen years of experience in tax and commercial litigation before the High Court or Supreme Court of Pakistan, to be nominated from a panel notified by the Board from time to time; and

(c) a senior serving or retired officer of the FBR (BS 20

or above).

(4) The powers, functions, and procedure of the committee

along with remuneration of its Members shall be governed as may be prescribed by the Board.

(5) Recommendations of the committee shall be binding upon the Commissioner Inland Revenue having jurisdiction over the case.

(6) Notwithstanding anything contained in any other law for the time being in force, no suit, prosecution, or other legal proceedings shall lie against the Members of the committee and the Commissioner Inland Revenue having jurisdiction over the case, in relation to the decisions made under this section.

(7) The Committee constituted under this sub-section shall exercise its powers and functions with effect from the date of its constitution as notified by the Board.”;

(20) in section 134A, -

(a) after sub-section (10), the following new sub-section shall be inserted, namely:-

“(10A) Notwithstanding the dissolution of the committee, the committee may, by an order in writing, rectify any mistake apparent from the record on its own motion or any mistake brought to its notice by the taxpayer or the Commissioner, within thirty days of the receipt of decision of the committee by the taxpayer or the Commissioner, as the case may be.”; and

• (b) in sub-section (11), in the proviso for the full stop at the end, a colon shall be substituted and thereafter the following new proviso shall be added, namely: -

“Provided further that where, at any stage of the proceedings, any member of the committee becomes unavailable or is unable to perform his functions for any reason whatsoever, the Chairman of the Board shall, within fifteen days of the occurrence of such vacancy, appoint another person in accordance with the provisions of sub-section (3) of this section to fill such vacancy, and the committee so reconstituted shall continue to function subject to the same terms, conditions and limitations as were applicable to the original committee:

Provided also that upon such reconstitution, the committee shall be allowed a further period of sixty days to conclude the proceedings and perform its functions under this section:

Provided also that the total period available to the committee, including the period already consumed prior to such reconstitution, shall in no case be less than ninety days from the date of its original constitution.”;

(21) after section 134A, as amended above, the following new section shall be inserted, namely:-

“ 134B. Algorithmic settlement mechanism. - (1)

Notwithstanding anything contained in this Ordinance, the Board may

establish digitally operated algorithmic settlement mechanism (hereinafter referred to as "the mechanism") for settlement of tax proceedings at any stage before any assessment or amendment of assessment order under sections 121, 122 or 122E of this Ordinance through revision of return under sub-section (6) of section 114 in certain cases.

(2) In case, the mechanism calculates and presents to the taxpayer a settlement offer for voluntary revision of return as per the criteria provided under sub-section (3), the taxpayer may avail the offer as provided in sub-section (4).

(3) The system generated settlement offer shall be calculated

on the basis including but not limited to -

(a) the stage of proceedings at which settlement is

offered;

(b) the taxpayer's compliance history, as maintained in FBR's data;

(c) the nature and character of the discrepancy, including whether it involves a valuation or legal interpretation dispute, unexplained income or assets, or concealment; and

• (d) any other basis the Board may consider relevant to ensure revenue adequacy and equitable treatment of taxpayers.

(4) A taxpayer who opts to avail this mechanism shall within

ten days from the date of settlement offer to -

• (a) accept the settlement offer on IRIS;

• (b) deposit the settlement offer amount along with revised return; and

• (c) revise the relevant return of income to incorporate the settled amount.

(5) The issues confronted to the taxpayer through notice of selection of audit, a notice under section 111, an audit report under subsection (6) of section 177, a notice under sub-section (9) of section 122, as the case may be, shall stand abated, if the taxpayer revises the return by accepting the offer as provided in sub-section (4).

(6) Revision of return consequent upon acceptance of offer under sub-section (4) of this section shall not preclude proceedings in respect of any other issue or discrepancy not covered by the settlement offer, nor shall it affect proceedings for any other tax year.”;

(22) in section 143, -

• (a) in sub-section (1), after the word “ship”, occurring for the second

time, the expression “, or the authorised shipping agent as defined in clause (6A) of section 2,” shall be inserted;

(b) after sub-section (1), amended as aforesaid, the following new sub- sections shall be inserted, namely: -

“(1A) Notwithstanding anything contained in this Ordinance, only one return shall be furnished for each vessel or voyage, and such return shall cover the total freight and all related amounts attributable to the ship.

• (1B) The master of ship or the authorised shipping agent

responsible for manifest filing and freight handling in respect of a vessel shall furnish the return under this section, and no other person shall furnish such return for that vessel or voyage.”;

• (c) in sub-section (2), -

  • (i) after the word “ship”, occurring for the first time, the expression “or authorised shipping agent” shall be

  • inserted; and

  • (ii) after the word “master”, the words “or authorised shipping agent” shall be inserted;

• (d) in sub-section (3), for the words “shall be”, the words “or authorized shipping agent shall be jointly and severally” shall be substituted;

• (e) in sub-section (4), after the word “ship” occurring for the second time, the words “or authorised shipping agent” shall be inserted and after the word “charterer”, occurring for the second time, the expression “or authorised shipping agent” shall be inserted;

• (f) in sub-section (5), after the word “Commissioner”, occurring at the end, the words “ and electronic confirmation of filing of return and payment of tax under this section has been received in the prescribed manner” shall be inserted; and

• (g) in sub-section (6), after the word “ship”, occurring for the second time, the words “or authorised shipping agent” shall be inserted;

• (23) in section 147, sub-section (6C) shall be omitted;

• (24) after section 151A, the following new section shall be inserted, namely:

“151B. Certain payments by life insurance companies and takaful operators. - (1) Every life insurance company, including a family takaful operator or a window takaful operator, making any payout, benefit, surrender value, maturity proceeds or similar payment to an individual under a life insurance policy, family takaful certificate, plan or arrangement shall, at the time of making such payment, deduct tax at the rate specified in Division IC of Part III of the First Schedule.

(2) For the purposes of sub-section (1), the amount liable to tax deduction shall be the gross amount of payout or benefit reduced by the aggregate amount of premiums or contributions paid by the policyholder or participant.

(3) The provisions of sub-section (1) shall not apply where the

payout or benefit-

• (a) is made on account of death of the insured or

participant;

(b) is made on account of disability of the insured or participant; or

(c) is made after completion of seven years from the date of issuance of the policy, certificate or plan.

(4) Tax deducted under this section shall be treated as final

tax on the income arising from such payout or benefit.”;

(25) in section 152, for sub-section (1DA), the following shall be substituted,

namely:-

“(1DA) Every banking company maintaining a Foreign Currency Value Account (FCVA), Foreign Currency Business Value Account (FCBVA), Non-Resident Rupee Value Account (NRVA), or NonResident Rupee Business Value Account (NRBVA) shall deduct tax from capital gain arising on the disposal of debt instruments and Government securities and certificates (including Shariah compliant variant) invested through aforesaid accounts at the rate specified in Division II of Part III of the First Schedule.”;

• (26) after section 154A, the following new section shall be inserted, namely:

“ 154B. Withholding tax on revenues Received from social media platforms. - (1) Every banking and non-banking financial institution shall, at the time of credit or receipt of any amount in an account of a person, deduct tax at the rate specified in Division IIIAB of Part III of the First Schedule, where such amount represents revenues received from social media platforms.

• (2) For the purposes of this section -

(a) “digital content creator” or “social media influencer” means any individual or entity deriving income from creation, publication, or monetization of content on digital platforms including but not limited to YouTube, Facebook, Instagram, Tik Tok or such others similar platforms; and

• (b) “payment” includes any inward remittance, transfer, or credit received through banking channels,

including through intermediaries such as online payment service providers or digital financial platforms.

• (3) The tax deducted under this section shall be -

  • (a) minimum in the case of a resident person; and

  • (b) final tax in the case of a non-resident person not having a permanent establishment in Pakistan.

(4) The Board may, by notification in the official Gazette,

prescribe rules for implementation, including identification and reporting mechanisms.”;

• (27) in section 159, after sub-section (1B), the following new sub-section shall be inserted, namely: -

“(1C) Where a person has distributed ninety percent or more of its accounting income amongst the unit or certificate holders or shareholders, as the case may be, in accordance with the provisions of clause (99) of Part I of the Second Schedule for the last three years, the person shall be eligible for issuance of exemption certificate under subsection (1) and the certificate shall be issued for the subsequent whole tax year.

(1D) Where a person has been issued approval under the provision of sub-clause (c) of clause (36) of section 2 of this Ordinance for a tax year, the person shall be eligible for issuance of exemption certificate under sub-section (1) and the certificate shall be issued for the said whole tax

year.”;

• (28) after section 165A, amended as aforesaid, the following new section shall be inserted, namely: -

“165AB. Reporting of financial transaction data by banking companies and financial institutions. - (1) Notwithstanding anything contained in the Banking Companies Ordinance, 1962 (LVII of 1962), the State Bank of Pakistan Act, 1956 (XXXIII of 1956), the Protection of Economic Reforms Act, 1992 (XII of 1992), or any other law for the time being in force, every banking company and Electronic Money Institutions (EMIs) shall electronically upload the information, as mentioned in subsection (2), to the Central Data Hub, for algorithmic cross-matching of tax and bank information.

(2) Information in respect of an account holders having deposits or withdrawals exceeding one hundred million Rupees during a reporting period in any or all of the bank accounts maintained by the account holder, specifying particulars of deposits or withdrawals, including opening and closing balances, peak credits, and total credits during the reporting period.

(3) This information as shared above shall be digitally processed and shall not be visible to any of the Income Tax Authorities during this cross-matching process.

(4) In case of gross mismatch in the information in respect of an account holder, the digital system of the Board shall feed the information so required into the Compliance Risk Management (CRM) system of the Board and further proceedings shall be conducted by the National faceless centre as provided in this Ordinance.

(6) The Board shall ensure that such information, shared by

the banks, remains strictly confidential and in no case is disclosed or misused in a manner to disregard the confidentiality measures provided in the statutes and rules governing commercial banking, save as provided in this section.

• (7) In this section -

  • (a) “reporting period” means, in respect of a Financial Year, a period of six months, starting from:

    • (i) 1st day of July and ending on 31st day of December; and

    • (ii) 1st day of January and ending on 30th day of June,;

  • (b) “specified date” means the-

    • (i) 31st day of January in case of reporting period ending on 31st day of December; and

    • (ii) 31st day of July in case of reporting period ending on 30th day of June;

  • (c) “accounts” means bank accounts maintained by a person including current deposits, call deposits, saving deposits, fix deposits, term deposits, or any other such deposits by whatever name called;

  • (d) “peak credits” means the highest credit balance in all the bank accounts of the account holder on any given date during the reporting period;

(e) “Central Data Hub” means a virtual repository of data and information maintained by the Board through PRAL; and

• (f) “compliance risk management (CRM)” means a computer programme for identification and communication of compliance risks, including understatement of sales, overstatement of expenses, non-reporting or under-reporting of incomes, assets, and transactions.”;

(29) in section 169, in sub-section (1), in clause (b), after the expression “154A”, the expression “, clause (b) of sub-section (3) of section 154B,” shall be inserted;

• (30) in section 174, for sub-section (5), the following shall be substituted, namely: -

“(5) The Board may require any person or class of persons to install and use an electronic resource of such type and description as may be prescribed, or to act as an integrated enterprise through a notification in the official Gazette for the purpose of receiving, storing, matching and accessing information regarding any transaction that has a bearing on the tax liability of such person.”;

• (31) in section 175AA, in sub-section (1), -

  • (a) in clause (a), -

(i) after the word “with”, occurring for the first time, the words “the State Bank of Pakistan and” shall be inserted; and

• (ii) after the word “the”, occurring for the fourth time, the expression “State Bank’s Central Data Repository (by any name) and” shall be inserted and the word “and” occurring at the end shall be omitted;

  • (b) in clause (b), after the word “the”, occurring for the first time, the words “State Bank of Pakistan, Microfinance banks, and Electronic Money Institutions (EMIs) and” shall be inserted and for the full stop occuring at the end, the expression “; and” shall be substituted; and

  • (c) after clause (b), amended as aforesaid, the following new clause shall be added, namely: -

    - “(c) the State Bank of Pakistan may establish, operate and maintain a secure centralized virtual repository of banking data, comprising such information, records, and financial transactions of persons maintained by Scheduled banks on the basis of unique identifiers, as may be prescribed by the Board and collect and provide data and results as per clauses (a) and (b) of this sub-section.”;

• (32) in section 177, after sub-section (6A), the following new sub-sections shall be added, namely, -

“(6B) If, at any stage of the proceedings before him, if the Commissioner is of the opinion that having regard to, -

• (a) the nature and complexity of the accounts; or

• (b) volume of the accounts; or

• (c) doubts about the correctness of the accounts; or

• (d) multiplicity of transactions in the accounts; or

• (e) specialised nature of business activity of the taxpayer; and interests of the revenue, is of the opinion that it is necessary so to do, he may, after giving the taxpayer a reasonable opportunity of being heard, and with the previous approval of the Chief Commissioner, direct the taxpayer to get either or all of the following to get the -

  • (i) accounts re-audited by an accountant, and to furnish a report of such audit duly signed and verified by such accountant including answers to the specific queries as the Commissioner may require;

  • (ii) inventory re-valued by a cost accountant, and to furnish a report of such inventory valuation duly signed and verified by such cost accountant including answers to the specific queries as the Commissioner may require; and

  • (iii) actuarial values in the accounts determined by an actuary and to furnish a report of such valuation duly signed and verified by such actuary including answers to the specific queries as the Commissioner may require;

Explanation: The accountant,

the cost accountant, or actuary as referred to in sub-section (6B) shall be nominated by the Commissioner for the purposes of this subsection from amongst the panel of such accountants, valuers, or actuaries

nominated by the Board.”;

(33) in section 182, in sub-section (1), in the Table, -

(a) against S. No. 1, in column (3), for the Explanation, the following

shall be substituted, namely: -

“ Explanation. - For the purposes of this entry, it is declared that the expression "tax payable" means the higher of -

(i) tax chargeable on the taxable income on the

basis of assessment made or treated to have been made under sections 120, 121, 122, 122D, or 122E; or

(ii) the highest tax payable by the person in any of the three immediately preceding tax years for which returns of income were duly filed.”;

(b) after S. No. 2, the following new S. Nos. and entries relating

thereto in columns (2), (3) and (4) shall be inserted, namely: -

• (c) against S. No. 8,-

  • (i) in sub-entry (a), in column (3), for the expression "twentyfive", the words "one hundred" shall be substituted;

  • (ii) in sub-entry (b), in column (3), for the word "fifty", the words "two hundred " shall be substituted; and

  • (iii) in sub-entry (c), in column (3), for the word "one", the word "three" shall be substituted;

• (d) against S. No. 10, in column (3), for the word "twenty five ", the words "five hundred" shall be substituted and for the expression "50%", the expression "100%" shall be substituted;

• (e) against S. No. 12, in column (3), for the words “hundred thousand”, the word “million” shall be substituted;

• (f) against S. No. 15, in column (3), for the word "forty", the expression "five hundred" shall be substituted and for the full stop occurring at the end a colon shall be substituted and thereafter the following new proviso shall be added, namely:-

“Provided that where the defaulter in such case is a company, its Principal Officer shall be personally liable to pay an additional penalty of five hundred thousand rupees for such offense.”;

• (g) against S. No. 35, in column (2), -

  • (i) for the word " company”, the expression " person, including a company" shall be substituted; and

  • (ii) after paragraph (c), the following Explanation shall be inserted, namely: -

"Explanation. - For the purposes of this entry, audited financial statements furnished in the form of image files, scanned documents, or password-protected files that are illegible or otherwise inaccessible to the concerned Inland Revenue authority shall be deemed to have been furnished as blank or incomplete documents."; and

• (h) after S. No. 35, amended as aforesaid, the following new S. Nos. and entries relating thereto in columns (2), (3) and (4) shall be added, namely: -

• (34) in section 182A, in sub-section (1), in clause (a), in the proviso, -

  • (a) in paragraph (i), for the word “twenty”, the words “one hundred” shall be substituted;

  • (b) in paragraph (ii), for the word “ten”, the word “fifty” shall be substituted; and

  • (c) in paragraph (iii), for the word “one”, the word “twenty-five” shall be substituted;

• (35) section 209A shall be omitted;

• (36) after section 209A, omitted as aforesaid, the following new sections shall be inserted, namely: -

  • “209B. Faceless jurisdiction of income-tax authorities. - (1)

  • Notwithstanding anything contained in this Ordinance, the Inland

Revenue tax authorities appointed in National faceless center shall perform all or such functions, and exercise all or such powers under this Ordinance as may be assigned to them in respect of such persons, or classes of persons, for such tax years of a person through algorithms developed by the Board.

(2) The jurisdiction so assigned under this Ordinance may be exclusive or concurrent. In case of concurrent jurisdiction, the powers and functions not assigned to the National faceless centre shall remain with the Commissioner having jurisdiction under section 209 of this Ordinance.

(3) The Board may transfer jurisdictions in respect of persons or classes of persons, for a specific tax year, for which the jurisdiction has already been assigned under this section, from National faceless center to the Commissioner having jurisdiction under section 209 of this Ordinance, on recommendation of the Chief Commissioner or on its own accord.

(4) The Chief Commissioner appointed in the National faceless center may request the Board to direct the Commissioner having jurisdiction under section 209 or any other Income Tax Authority, as it may deem fit to conduct physical verification including nature and size of the business, assets, investments, expenditures, and any other information or verification required by the Chief Commissioner for conducting any proceedings assigned to the National faceless centre:

Provided that the Board may exercise its power of allocation of verification through an algorithm-based system.

(5) Notwithstanding anything contained in any law for the time

being in force, the identity of the authority exercising jurisdiction in the National faceless centre shall be kept confidential from the taxpayer, the authorized representative of the taxpayer, and any unauthorized person.

(6) No notice, order, demand, or assessment passed by an authority appointed at the National faceless centre shall be called in question or set aside merely on the ground that such authority did not have jurisdiction over the taxpayer under section 209 of this Ordinance, or lack of notified delegation of power under section 210 of this Ordinance, or because of the fact that identity of the authority has been kept confidential from the taxpayer as per sub-section (5).”;

• (37) in section 216, in sub-section (3), -

  • (a) for clause (ba), the following shall be substituted, namely: - “(ba) to an auditor, audit mentors and sectoral experts appointed on contractual basis or engaged through a third party including a payroll firm in the Federal Board of Revenue, after a non-disclosure agreement is made with such auditor as may be prescribed, to assist any authority mentioned in clauses (b) to (g) of sub-section (1) of section 207;”; and

  • (b) in clause (ke), for the words “and international”, the expression “, international research institutions and international” shall be substituted;

• (38) in section 222, in sub-section (2), after the word “auditors”, occurring for the first time, the expression “, audit mentors and sectoral experts” shall be inserted;

• (39) for section 227D, the following shall be substituted, namely: -

  • “ 227D. National faceless centre.- (1) Notwithstanding anything

to the contrary contained in any of the provisions of this Ordinance, the Board may, for the purposes of proceedings under this Ordinance in faceless manner, establish a National faceless center (hereinafter referred to as “the centre”) and specify its jurisdiction, powers and functions.

(2) The centre shall comprise a Director General and as many Chief Commissioners, Commissioners, Additional Commissioners, Deputy Commissioners, Assistant Commissioners, and any of the Income Tax Authorities mentioned in section 207 along with support staff, as the Board may deem fit for the purposes of this section.

(3) The Board may design algorithms for assigning any function or jurisdiction under this section to any of the authorities mentioned in sub-section (2).

(4) The Centre shall comprise as many wings and units as may be prescribed by the Board.

(5) The functions of audit, assessment, and quality control in a specific case for a specific tax year shall be performed by separate officers.

(6) All communications, among the units, or with the taxpayer, or an authorized representative of the taxpayer, or with any other person with respect to the information or documents or evidence or any other details, as may be necessary, shall be through electronic means.”;

(40) after section 228, the following new section shall be inserted, namely: -

“228A. Directorate General (Field Compliance), Inland Revenue. - (1) The Directorate General (Field Compliance) Inland Revenue shall consist of a Director General and as many Directors, Additional Directors, Deputy Directors and Assistant Directors and such other officers as the Board, may by notification in the official Gazette, appoint.

• (2) The Board may, by notification in the official Gazette, -

  • (a) specify the functions and jurisdiction of the Directorate General and its officers; and

(b) confer the powers of authorities specified in section 207 upon the Directorate General and its officers.”;

• (41) in section 231B, in sub-section (6), -

  • (i) in clause (b), after the semi colon, occurring at the end, the word “and” shall be added, and

  • (ii) clause (c) shall be omitted;

• (42) section 236CA shall be omitted;

• (43) after section 237B, the following new section shall be inserted, namely :-

“ 237C. Uniform. - The Board may by notification in the official Gazette, prescribe rules for wearing of uniform by officers and staff of Inland Revenue Service of Pakistan.”;

• (44) in the First Schedule, - (a) in Part I, -

  • (i) in Division I, in clause (2), for the Table, the following shall be substituted, namely: -

“TABLE

(ii) in Division IIB, for the Table, the following shall be

substituted, namely: -

“TABLE

• (iii) in Division IVA, for the word “delivered”, the word “ordered” shall be substituted;

• (iv) in Division VII, in the third Proviso, after the word “shall”, the words “charge and” shall be inserted;

• (v) Division VIIIC shall be omitted; and

• (vi) in Division IX, in the Table, in column (1), against S. No. 3 in column (2), entry (a) shall be omitted;

• (b) in Part III, -

  • (i) after omitted Division IB, the following new Division shall be inserted, namely:-

“Division IC

Certain payments by life insurance companies and

takaful operators

• (ii) in Division III, -

  • (A) in paragraph (2), -

    • (1) in sub-paragraph (i), for the expression “6%”, the expression “7%” shall be substituted;

    • (2) for sub-paragraph (ii), the following new subparagraph shall be substituted; namely: - “(ii) 15% in the case of independent professional services such as doctors, lawyers, architects, accountants,

software engineers or developers,

working independently;”; and

(3) after sub-paragraph (ii), substituted as aforesaid, the following new sub-paragraphs shall be added, namely: -

“(iii) 1.5% of the gross amount payable to electronic and print media in case of advertising services; and

(iv) 14% of the gross amount in the case of services other than those covered in sub-paragraphs (i), (ii) and (iii).”;

(iii) in Division IIIAA, for the expression “15%”, the expression

“20%” shall be substituted;

(iv) after Division IIIAA, the following new Division shall be inserted, namely: -

“ Division IIIAB

Withholding Tax on Revenues Received from Social Media Platforms

The rate of tax to be deducted under section 151B shall -

(a) 5% in case of resident persons whose name appearing in the Active Taxpayers’ List; and

(b) 5% in case of non-resident person:

Provided that tax collected under clause (b)

shall be final tax.”;

(v) in Division IV, -

(A) in paragraph (1), for the expression “1%”, the expression “1.25%” shall be substituted; and

(B) in paragraph (3), for the expression “1%”, the expression “1.25%” shall be substituted.; and

(vi) in Division IVA, in the Table, in column (1), in S. No. (1), in the entry in column (3), for the figure “2026”, the figure “2029” shall be substituted; and

• (b) in Part IV, -

(i) for Division X, the following shall be substituted, namely: -

“ Division X

Advance tax on sale or transfer of immovable

property

The rate of tax to be collected under section 236C shall be 2.75% of the gross amount of the consideration received.”;

(ii) for Division XVIII, the following shall be substituted, namely: -

“ Division XVIII

Advance tax on purchase of immovable property

The rate of tax to be collected under section 236K

shall be 1.25% of the fair market value of the immovable

property.”;

(iii) in Division XXVII, for the expression “5%”, the expression “0.5%” shall be substituted; and

(iv) Division XA shall be omitted;

(52) in the Second Schedule, -

(a) in Part I, -

(i) in clause (57), in sub-clause (4), in the Table, in

column (1), -

• (A) against Sr. No. (xiii), in column (2), for the expression “National Endowment Scholarship for Talent (NEST)”, the words “Pakistan Education Endowment Fund” shall be substituted; and

• (B) after Sr. No. (lii), the following new Sr. Nos. and entries relating thereto in column (2), shall be added, namely: -

• (ii) in clause (78), for the words “Foreign Currency Account Scheme”, the expression “any foreign currency account scheme(s)” shall be substituted; and

  • (iii) in clause (79), for the expression “non-resident individual holding a Pakistan Origin Card (POC) or National ID Card for Overseas Pakistanis (NICOP) or Computerized National ID Card (CNIC)”, the expression “a person maintaining a Non-Resident Pakistani Rupee Value Account “NRVA” or Non-Resident Business Value Account “NRBVA” under the scheme introduced by the State Bank of Pakistan” shall be substituted;

• (b) in Part II, -

  • (i) in clause (5AA), for the word “individual”, the word “person” shall be substituted and for the expression “or a foreign currency account”, the expression “Foreign Currency Value Account (FCVA), Foreign Currency Business Value Account (FCBVA), Non-Resident Rupee Value Account (NRVA), or Non-Resident Rupee Business Value Account (NRBVA)” shall be substituted;

  • (ii) after clause (24CB), the following new clause shall be inserted, namely: -

    • “(24CC) The rate of tax under clause (b) of subsection (1) of section 153 to be deducted from a person rendering terminal or port

service shall be twelve percent of the gross amount of payment.”; and

(iii) for clause (24D), the following shall be substituted, namely:

“(24D) The rate of minimum tax under sub-section (1) of section 113 in the case of distributors, dealers, sub-dealers, wholesalers of packaged food, fertilizer, locally manufactured mobile phones, sugar and electronics shall be 0.5%, subject to the conditions that beneficiaries of reduced rate are appearing on the active taxpayers’ lists issued under the provisions of the Sales Tax Act, 1990 and the Income Tax Ordinance, 2001 (XLIX of 2001).”;

• (c) in Part IV, -

  • (i) in clause (12A), for the word “to”, occurring for the second time, the word “by” shall be substituted;

  • (ii) in clause (47B), after the expression “151,”, the expression “151A,” shall be inserted;

  • (iii) clause (46A) shall be omitted;

  • (iv) clause (57) shall be omitted;

  • (v) in clause (111AB), for the expression “non-resident individual holding Pakistan Origin Card (POC) or National ID Card for Overseas Pakistanis (NICOP) or Computerized

National ID Card (CNIC) maintaining a Foreign Currency Value Account (FCVA) or Non-resident Pakistani Rupee Value Account (NRVA)”, the expression “Foreign Currency Value Account (FCVA), Foreign Currency Business Value Account (FCBVA), Non-Resident Rupee Value Account (NRVA), or Non-Resident Rupee Business Value Account (NRBVA)” shall be substituted;

(vi) for clause (114A), the following shall be substituted, namely :-

“(114A) The provisions of clause (ae) of sub-section (1) of section 114 and section 181 shall not apply to a person maintaining a Foreign Currency Value Account (FCVA), Foreign Currency Business Value Account (FCBVA), Non-Resident Rupee Value Account (NRVA), or Non-Resident Rupee Business Value Account (NRBVA) with authorized banks in Pakistan under the foreign exchange regulations issued by the State Bank of Pakistan:

Provided that this clause shall not apply if the person referred in this clause has Pakistan-source taxable income other than the following; namely:-

• (a) profit on debt on FCVA, FCBVA, NRVA, or NRBVA ;

(b) profit on debt earned on Government of Pakistan (GOP) securities either

conventional or Shariah Compliant where investment has been made from proceeds of FCVA, FCBVA, NRVA, or NRBVA;

- (c) capital gain on disposal of immovable property acquired from proceeds of FCVA or NRVA; - (d) capital gain on disposal of securities traded on Pakistan Stock Exchange and units of mutual funds that are acquired from proceeds of FCVA, FCBVA, NRVA, or NRBVA; or - (e) dividend income from securities traded on Pakistan Stock Exchange and mutual funds that are acquired from proceeds of FCVA, FCBVA, NRVA, or NRBVA.”; and - (vii) in clause (115), for the word “one”, the word “two” shall be substituted;

• (53) in the Eighth Schedule, rule 5 shall be omitted; and

• (54) in the Tenth Schedule, -

  • (a) rule 1A shall be omitted; and

  • (b) in rule 10, clause (y) shall be omitted;

7. Amendments in the Federal Excise Act, 2005.- In the Federal Excise Act, 2005, the following further amendments shall be made, namely: -

   • (1) in section 2,-

• (a) after clause (2), the following new clause shall be inserted, namely:-

  • “(2A) “algorithmic settlement mechanism” means algorithmic settlement mechanism provided under section 26AAA of the Sales Tax Act, 1990;”;

• (b) after clause (9a), the following new clause shall be inserted, namely:-

  - “(9b) **“electronic invoicing system”** means such electronic system or mechanism as may be prescribed or approved by the Board for issuance and recording of sales tax invoices in electronic form;”;

• (c) after clause (16), the following new clause shall be inserted, namely:-

  • “(16A1) “National faceless centre” means the National faceless centre as defined in section 32C of the Sales Tax Act, 1990 (VII of 1990); and

• (d) after clause (19a), the following new clause shall be inserted, namely:-

  • “(19b) “production monitoring system” means any system or technology, used for the purposes of monitoring production and sale of goods, whether in real-time or otherwise, including such systems or technologies as may be prescribed by the Board from time to time;”;

(2) in section 3, after sub-section (3A), the following new sub-section shall be inserted, namely:-

• “(3B) Notwithstanding anything contained in this section, there shall be

levied and collected a Special Excise Duty in addition to duty imposed under sub-section (1), on such goods as listed in Table-IA of the First Schedule to this Act at the rates specified therein:

Provided that the Board may prescribe time, mechanism, procedure, mode and manner of collection for such duty.”;

• (3) after section 7, the following new section shall be inserted, namely:-

  • “(7A) National faceless centre and application of the provisions of the Sales Tax Act, 1990.- (1) Notwithstanding anything contained in this Act, the audit and assessment proceedings under the Act may be conducted in the faceless manner by the National faceless centre.

• (2) The provisions of the Sales Tax Act, 1990 (VII of 1990) relating to

the establishment, assignment of jurisdiction, conduct of audit, assessment and appeals shall apply mutatis mutandis.

(3) Notwithstanding anything contained in this Act, the Board may establish digitally operated algorithmic settlement mechanism for settlement of proceedings at any stage before any order under this Act is passed and the provisions relating to algorithmic settlement mechanism of the Sales Tax Act, 1990 (VII of 1990) shall apply mutatis mutandis .

• (4) in section 18, for sub-section (1), the following shall be substituted, namely:-

“(1) A person registered under this Act shall issue for each transaction

an invoice including an advance receipt invoice, bearing a verifiable and unique FBR invoice number at the time of clearance or sale of goods

including goods chargeable to duty at the rate of zero per cent or providing or rendering services containing the following particulars in Urdu or English language, namely:-

• (a) name, address and registration number of the seller;

• (b) name, address and registration number of the buyer;

• (c) date of issue of the invoice;

• (d) description and quantity of goods or as the case may be, description of services;

• (e) value exclusive of excise duty;

• (f) amount of excise duty; and

• (g) value inclusive of excise duty:

Provided that the Board may notify any person or class of persons who may be allowed to issue an advance receipt invoice under the notified system:

Provided further that the condition of verifiable and unique FBR invoice number shall be applicable from a time as notified by the Board.”;

• (5) in section 19,-

  • (a) in clause (a), in sub-section (2), for the words “Federal Excise officer”, the words “Officer of Inland Revenue” shall be substituted; and

  • (b) for sub-section (4), the following shall be substituted, namely:“(4) Any person who, without the approval of the Commissioner, directly or otherwise destroys, damages, erases or otherwise manipulates data stored in or used in connection with

a computer, equipment or system used for the electronic monitoring of production, manufacture, sales, clearance, stocks or any other related activity implemented under this Act and the rules made thereunder, including any production monitoring system, video analytics system or otherwise uses a computer, the purpose or effect of which is to reduce, avoid or evade any liability to duty of excise which would otherwise have been imposed by this Act, or to defeat any provisions of this Act and rules made there under shall be guilty of an offence and shall be liable to fine which may extend to seventy five thousand rupees or ten times of the duty involved whichever is higher and punishment with imprisonment which may extend to five years or both.”;

(6) in section 26, for sub-section (1), the following shall be substituted, namely:-

“(1) The counterfeited cigarettes or beverages which have been manufactured or produced unlawfully and other dutiable goods on which duty of excise has not been paid in the manner as required under this Act and the rules made thereunder or such goods without affixing or affixing counterfeit tax stamps, bar codes, banderols, stickers, labels or bar codes, as required under section 45A of this Act, or goods which are required to be monitored through a production monitoring system under this Act and the rules made thereunder but are manufactured, produced, transported, removed or otherwise dealt with without such

monitoring in the prescribed manner, shall be liable to seizure along with the conveyance, which has been used for the movement, carriage or transportation of such goods.”;

• (7) in section 27, for sub-section (1), the following shall be substituted, namely:-

  • “(1) The cigarettes or beverages seized for the reasons of counterfeiting or such goods without affixing or affixing counterfeited tax stamps, banderoles, stickers, labels or barcodes, as required under section 45A of this Act ,or goods which are required to be monitored through a production monitoring system under this Act and the rules made thereunder but are manufactured, produced, transported, removed or otherwise dealt with without such monitoring in the prescribed manner, shall be liable to outright confiscation and shall be destroyed in the manner prescribed in sub-section (10) of section 19.”;

• (8) in section 33, in sub-section (1), for the words “Federal Excise officer”, the words “officer of Inland Revenue” shall be substituted;

(9) after section 34A the following new section shall be inserted, namely: - “34AA. Independent case scrutiny committee. - (1) A reference under section 34A of the Act before the High Court, or an appeal or review before the Federal Constitutional Court or the Supreme Court of Pakistan shall only be filed by the Commissioner Inland Revenue after the same has been

approved by an independent case scrutiny committee as constituted by the Board.

(2) The Board may constitute one or more such committees

and assign ed them cases or classes of cases decided by the Appellate Tribunal Inland Revenue or the High Court, as the case may be.

(3) The Committee shall comprise of the following Members

as nominated by the Board -

• (a) a retired judge of the Supreme Court of Pakistan, the Federal Constitutional Court, or any of High Court who shall also act as Chairman of the Committee;

• (b) an Advocate having not less than fifteen years of experience in duty and commercial litigation before the High Court or Supreme Court of Pakistan, to be nominated from a panel notified by the Board from time to time; and

• (c) a senior serving or retired officer of the FBR (BS 20 or above).

(4) The powers, functions, and procedure of the Committee

along with remuneration of its Members shall be governed as may be prescribed.

(5) Recommendations of the committee shall be binding upon the Commissioner Inland Revenue having jurisdiction over the case.

(6) Notwithstanding anything contained in any other law for

the time being in force, no suit, prosecution, or other legal proceedings

shall lie against the Members of the committee and the Commissioner Inland Revenue having jurisdiction over the case, in relation to the decisions made under this section.

(7) The committee constituted under this sub-section shall exercise its powers and functions with effect from the date of its constitution as notified by the Board.”;

• (10) in section 43A, for the words “federal excise”, the words “of Inland Revenue” shall be substituted;

• (11) in section 44, in sub-section (3), for the words “Federal Excise Officer”, the words “Officer of Inland Revenue” shall be substituted;

• (12) for section 45A, the following shall be substituted, namely:-

“(45A) Monitoring or tracking by electronic or other means.- (1) Subject to such conditions, restriction and procedures as it may deem fit to impose or specify, the Board may, by notification in the official Gazette, specify any registered person or class of registered persons or any goods or services or class of goods or services in respect of which monitoring or tracking of production, sales, clearance, stocks or any other related activity may be implemented through electronic or other means as may be prescribed.

(2) From such date as may be prescribed by the Board, no excisable goods shall be removed or sold by the manufacturer or any other person without affixing tax stamp, band role stickers, labels, bar code production monitoring system, video analytics, etc, in any such form, style and manner as may be prescribed by the Board in this behalf.

• (3) Such tax stamps, banderols, stickers, labels, barcodes,

production monitoring equipment etc., shall be acquired by the registered person referred to in sub-section (2) from a licensee appointed by the Board.”;

• (13) in section 46,-

  • (a) for sub-sections (1), (2) and (2A), the following shall be substituted, namely:-

“(1) The officer of Inland Revenue authorized by the Board or the Commissioner may, after giving advance notice in writing, conduct audit of the records and documents of any person registered under this Act.

(2) In case the Commissioner has information or sufficient evidence showing that such registered person is involved in fraud or evasion of duty, he may authorize an officer of Inland Revenue not below the rank of Assistant Commissioner, to conduct audit at any time in a year.

(2A) After completion of the audit under this section of any other provisions of this Act, the officer of Inland Revenue shall, after obtaining the registered person’s explanation on all the issues raised in the audit, issue an audit report containing audit observations and finding.

(2B) For the purpose of sub-section (2), the Commissioner may conduct audit proceedings electronically through video links, or any other facility as prescribed by the Board.”;

(2C) After issuing the audit report under this section or any other provision of law, the officer of Inland Revenue may, if required pass an order under sub-section (2) of section 14, after providing an opportunity of being heard to the registered person under sub section (1) of section 14, imposing the amount of duty as per law, charging default surcharge, imposing penalty and recovery of any amount erroneously refunded.”;

(b) in sub-section (3), for the proviso, the following shall be substituted, namely:-

“Provided that if a registered person deposits the amount of duty not paid, short paid or amount of duty evaded along with default surcharge during or after the audit but before the, issuance of show cause notice under sub-section (1) of section 14, he may deposit such amount along with twenty five percent of the amount of penalty prescribed under this Act or the rules made there under:

Provided further that if a registered person deposits the amount of duty not paid, short paid or amount of duty evaded along with default surcharge, after issuance of show cause notice under sub-section (1) of section 14, he may deposit such amount along with fifty percent of the amount of penalty prescribed under this Act or the rules made there under and in such case, further proceedings in the case shall abate.”;

• (c) after sub-section (3) amended as aforesaid, the following new sub-section shall be inserted, namely:-