Finance Ordinance, 2001

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BEG|STERED No.fl#
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9
EXTRAORDINARY
PUBLISHED BY AUTHORITY
PART I
Acts, Ordinances, President's Orders and Regulations
(I{ )VERNMENT OF PAKIS'I]\N
MINIS.TRY OF I,AW JUSTICE, HIJMAN RIGHTS
AND PART,IAMENTARY AFFAIRS
(Law, Justice and Human Rights Diyision)
Itlutnulnd. the I8tIt .ltlte. 200l
F. No.2(l)/2(Xll-Pub.-The 1i)llowing Ordinance made hy tlic Presidenl
is hereby publis[ed lin gencml inli)rmation:-
ORI)IN^N('tt N(). XXV oF 2(X)l
r\N
ORTnNAN(E
WHEREAS it is expedient to make provisions to give effect to the flnancial
proposals of the Federal Govemment for the year beginning on the Iirst day of July,
2OOl, and to amend certain laws for the purposes hereinafter appearing;
AND WHEREAS the National Assembly and the Senate stand suspended in
pursuance of the Poclamation of Emergency of the fourteenth day of October, 1999,
and the Provisional Constitution Order No. 1 of 1999;
(30 l )
Prica : Rs. 1J7.00
13474 (2oO1) Ex. Ciaz.l
ISI,AMABAD, MONDAY, JUNE 18, 2OOI
to 8iv( ell(t to tlt? fitu dal proposuls of the Federal. Govenunent.fitr
tht t'cur lteginning ot tltt, .list tlot' of .lull' 2001, ind tu tmrcntl certain luv s
.[or tlu' ltrn"post,s und in u munrrcr lrcreolter uppeuring:
TI{E GAZETTE OF PAKISTAN, EXTRA., ruNE 18, 2OOI [PART I
AND WHEREAS the President is satisfied that circumstances exist which render
il necessary to take immediate action;
NOW, THEREFORE, in pursuanc€ of the Proclamation of Emergency of the
fourteenth day of October, 1999, and the Provisional Constitutional Order No. 1 of 1999'
read with the Provisional Constitution (Amendment) Order No. I of 1999, and in
exercise of all powers enabling him in that behalf, the President of the lslamic Republic
of Pakistan is pleased to make and promulgate the following Ordinance:-
1. Short title, extent and cdnm€ncemenr.- (l) This Ordinance may be called
Finance Ordinance, 2001.
(2) lt extends to the whole of Pakistan
(3) lt shall come into force at once except the provisions of-
(a) section 3which shall come into force from the first dayof July,2001;and
(b) section 5 which shall come inlo force on such date as the Federal
Government may. by notification in official Gazette, appoint.
2. A[.ldBGpt of Act I of l94l:- Tbc foltowing amendments sbrll bc rriade i[ the
Cenral Excises Act, 1944 (I of 19,14), run€ly:.
(I) in sc.tion 3, in sub.scction (l l), for thc flrll stop, at tfu cn4 a colon shall
be subatihrtcd and thercaftcr the following proviso and an explan liqn
slnll bc addcd, mmcly:-
'?tovi&d thrt h cas€ of excissblc scrvices notified uder tte thfud
Fwlsoto srrb{.(liu (lF
(a) a regiscred scMce trovidcr shalt be entilled to deduct inpd tax paid
during the tax Friod Aom the amount of drty of excise due ftom him
on such scrvic€s in rcspect ofthst tax perioq
(b) a pgisucd pctson shall bc cntitlcd to &drrr thc amount of duty of
excise paid on such scrviccs as 8rc rec.ived Uy lim auring th€ tsx
pcriod froB tb orrytr tD( drE ton him i, rrspcot of thlt trx Friot
ard
(o) a registcrcd sfivicc prcvider shdl bc cntitlcd to d€dEt dr$y ofcxci!€
Fid oo such scrvicrs as arc rccsived by him &uing thc t8x prriod
from thc amount of duty of excis€ due from him on such services as
rr! Fovid€d or rsDdercd by him during that pcriod.
302
PART I] TI{E GAZETTE OF PAKISTAN, EXTRA., JUNE 18, 2OO1 303
Exphordoo,- For thc purposcs of this proviso,-
(a) the cxprcssion 'rEgistcred service providct'' Ecsos a Frs(m
regisi.rrd undsr thc Sales Tox Acq 1990, providing or rendering
excisablc s€rvic€s.notified under the third poviso to sub.scctior (1)
ofsection 3; and
(b) the expressions "input tax', 'outPut tax", 'registered
person" and '1ax period' shall hav€ the satne meanings
as are assigned b them in the Sales Tax Ac't, 1990.';
(2\ in section 4, in sub-section (4), for full stop' at the end, a colon shall bs
substituted and thereafter the following provisos shall be added' namelyi
"Provided that where any goods or class of goods that ars subiec{
to duli€s of exciss on local produc'tion as a Percentage of retail prics' such
goods, on import, as may be notified' shall be ass€ssed on the basis of
retail prico, dsdar€d by the importer, which shall be inclusirc of all
chargos and taxes, other than ssles tax levied and collec'ted under sec{ion
3 of the Sales Tax Act, 1990, at which any particular brand or variety of
such article i6 offered for sale to gen€ral body of consumers in Pakistan
or, if more than one such price is so tixed' for the same brand or varioty'
the highest of such Price:
Provided furthsr that th€ rstail price shall be legibly' plominently
and indelibly printed or embossed on each arlicle' packet, container'
package, cover or label, as the case may be.': and
(3) in section 358, in sub'section (6), for the words "five hundred" the words
"seven hundred and lifty" shall be substituted'
3. Amondment of Ordinance XXV of 1961' - The following amendments
shall be made in tlhe petroleum Products (Development Surcharge) Ordinance
1961 (XXV of 1961), namely:-
(1 ) in the long title and the preamble, for the words "development surcharge"
the words "petroleum development levy" shall be substituted;
304 TllE GAZETTE OF PAKISTAN, EXTRA., JUNE 18, 200I [PARr I
(2) for the words 'development surcharge', wherever occuning, the words
"petroleum development levy' shall be substituted;
(3) in section 1, in sub-s€ction (1), for the brackets and words "Development
Surcharge' the brackeb and words '(Pekoleum Development Levy)" shall
be substitutod;
(4) in section 2, 
-
(a)clauses (2) and (3) shall be omitted; and
(b)after clause (48), the following new clause shall be
inserted, namely: -
" (4Ba) "petroleum development levy" means the levy payable
under section 3;"
(5) for section 3, the following shall be substituted, namely:-
" 3- (1) Subject to the provision of lhis Ordinance, every refinery and every
company shall pay a pelroleum development levy at such rate as the Federal
Govemment may, by notification in omcial Gazette, impose on any petroleum
product produced by a refinery or, as the case may be, purchased by a
company for resale.
(2) Nothing in suEsection (1) shall apply to a p€troleum product
prcduced by a refinery or, as lhe cas€ may be, purchased by a
company, for export.
(3) Any amounl due and payable under sub-seclion ('l) and not
paid within the time allowed by the Federal Govemment, or any
officer authorized by h in this behalf, shall bs rocovsrable as an
anear of land revsnue."
4. Amendment of Act lV of 1969.- The following amendments shall be made in the
Customs Act, 169 (lV of 1969), namely:-
(1) in section 2,-
in clause (c), after the figure "79"; the words "and includes
electronic filing of bill of entry' shall be added;
(i)
PARTII THE GAZETTE OF PAKISTAN, EXTRA., JUNE 18,2001 305
(ii) in dause (d), after lhe figure "'131" the words 'and includes
elec-tronic filing of bill of export" shall be added;
(iii) for clause (ia) the following shall be substituted, namely:-
(iv) after clause (kk), the following new clauses shall be inserted,
namely:-
(kkk) export manifest means export manifest delivered under sub-
section (2) of section 53 and includes electronically filed
export manifest;":
(v) after clause (l), the following new clause shall be inserted, namely:-
(2)
(la) import manifest means import manifest delivered under
section 43 ot 44 as the case may be and includes
electronically filed import manifest:
in section 14-A. afrer the word 'Customs", at the end, the words and
comma "and shall pay utility bills, rent and taxes in respecl of such
accommodation" shall be added:
"21A. Power to deier collection of customsduty.' Subiect to such
conditions, limitations or restriclions as it thinks fit to impose, the Board may,
in such general cases as may be prescribed by rules or in particular cases
by special order, defer lhe collection of customs{uties either in whole or in
part.':
'(ia) "custom documenls" includes bill of entty, bill of export,
application lor claim for refund, duty drawback and repayment of
duty, baggage declaration form or similar other forms used for
customs clearance and such documents electronically filed;
(3) after section 21, the following new section will be inserted, namely:-
(4) in seclion 45, in suGsection (1), for the full stop, at the end, a colon shall be
substiluted and thereafter the following proviso shall be added, namely:-
306 THE GAZETTE OF PAKISTAN, EXTRA., J{JNE 18, 2OOI IPART I
"Provided that the Collector of Cusloms, through a special
order, on such terms and conditions as he may deem fit to impose'
may allow acceptance of digital s(lnatures instead of manual ones,
on electronically lransmitted import manitest.":
(5) in section 53, in sub-seclion (2),in clause (a), for the semicolon, at the end,
a colon shall be substituted and thereafter the following shall be added.
namely:-
"Provided that the Collector of Customs, through a special or
general order, on such lerms and conditions as he may deem fit to
impose, may allow acceptance of digital signalures, in lieu of the
manual ones, on electronically transmitted export manifest.';
(b) by the Fedbral GovBmment or the Boaid, for such period as it may
de€m fit,
subject to the condi$on that the extension in case of porishablB goods
shall b€ grantsd only if the goods are fit for human consumption.";
14) Whsn any{hing liable to confiscation under lhis Act is seized
by tne appopriate officer undBr section 168, the Collector of Customs, or
any olher ofiicer of customs aulhorized by him in this behalf, may
notwilhstanding the fac,t that adjudication of the case under saclion 179, or
an app€al under section 194A or a proceeding in any coud, is pending,
cause the thing lo be sold in accordance with the provisions ot sec,tion 201
and havs the pmcs€ds kspt in deposit pending adjudication ofths case or
as the case may b€, disposal of the appeal or the fnal ,udgement by the
court.
(6) in section 98, in sub-section (1), for clauses (a) and (b) the following shall be
substituted, namely:-
"(a) by the Collector of Customs, for a period not exceeding three
months in case oI notifed perishable goods and a period not
excs€ding six npnths in case of non-perishable goodsi and
(7) in section 169, for sub-section (4) and (5) the following shall be
substituted, namely:-
PART THE GAZETTE OF PAKISTAN , EXTRA. , JLINE 18, 2@l 30't
(8) in seclion j94-A,
(a) in suEseclion (tF
(i) for clause (a) the following shall be subslituted, namelyi
'(a) a final decision or order passed by an oficer of
qrsloms as an adiudicating authority under section .l 
Z9;
(iD in the frst proviso,-
(b) aller dause (e), amondsd as aforBsair, lho
urords aM colon .the app€ls in cases
specilled in ctause (a) to (e) shal 
,tie 
to such
offcsr as the Boad may, by notilication in th€
ofrcial Gazstte, authorize:.; shall be added:
(b) in sub-section (6), for the words "two hundred, the words ,.seven
hundred and tifty" sha be substituted; and
(s) for th6 FiBt Schedule, the Schedule sp€cified in th€ Schedule to this
Ordinance shall be substituted
,. Tbfollowing amendments shall be made in the lncome tax Orainance, 1929 ()qxl of1979), narn€tyi
(1) in section 2,-
(5) lf on such adildication or, as the case may b6, in such
app€al or proc€oding in Cour( tha thing so sold is found not to have been
liable to such confiscation, the enlire sals procoeds, aner necessary
deduction of duties, taxes or dues as provided in section 2Oi, shalt be
handed ovsr lo the ownsr.";
(a) in clauso (e) for the colon, at the end, a comma
shell be substibted: and
PAKISTAN, EXTRA IUNE 18,2001 [PART I
308 THE GAZETTE OF
(a) in clause (20), in subdause (b),-
(i) the word 'preference" shall be omitted; and
(iD afler the wotd "bonus'the words "or bonus shares" shall be
inserted: and
(b) in clause (24),-
(i) in suHause (b), the word "and"' occuning at the end' shall b€
omittd
(ii) in sub-clause (c), tor lhe @mma, a semicolon and word "; and"
shall be subslituted;
(iii) afler sub-clause (c), alnended as aforesaid' the following new
sub-clause shall be added, natnely:-
'1d) in the case of shareholder of a domestic
company, the amount representing the face value of
any bonus shares or the amount oI any bonus
declared. issued or paid by the company to its
shareholdets with a view to increasing its paid-up share
capital, ; and
(iv) the words, commas and semi-colon, but does not include' in
the case oI sharehoider of a domestic company' the amount
representing lace value of any bonus shares or the amount of
any bonus declared' issued or paid by the company to its
shareholdeG with a view to increasing its paid-up capital:"
shall be omitted;
(2) in sedion 12, suFseciion (9) shall be omitted;
in ssction 13, afier sub'section (2), the ficllowing new suFseclion shall be
(3)
inserted, namely:-
PART I] TIIE GAZETTE OF PAKISTAN. EXTRA 18, 2001 309
"(2A) The provisjons of this section shall not apply in respect
cf any amount of foreign exchange remitted Iiom abroad through
normal banking channels and got encashed in pakistan rup€es from
a scheduled bank and a cerlificate is produced to that effec1 frcm
such bank.'':
(4) in seclion 23, in sub-.section (.t),-
(a) in clause (v), after the word 'depreciation,, occuring for the second
time, lhe words .or First year Allowance,, shalt be inserted.";
(b) in clause (via). after the word "Schedule,,. the comma and words. ,,,or
any payment to a Special purpose Vehicle on behalf of the
Originato/' shall be inserted:
(c) after clause (viicc). the following new clause shall be inserted.
namelyt-
"(viiccc) any sum paid by the Small Business
Finance Corporation to the State Bank of pakistan (hereinafter
rererred to as the ',Bank") as the share of the Bank in prof{
eamed by the said Corporation on its investment in small
business out of credit line provdec, try the tsank on profit and
loss sharing basis.,,:
(d) afrer clause (vid) the following new clause shall be inserted. namely.-
"(viidd) the Iinancial cost of secuntization of
receivables by an Originator from a Special purpose Vehicle
being the difference between the amount recetved by the
originator and the amount of receivables securitised from a
Special Purpose Vehicle.,,:
(e) in clause (xxi), for the full stop, in the end, the semicoton and word ,..
and", shall be substituted and thereafrer. the following new ctause
and Explanation shall be added, namely _
., JUNE
3r0 THE GAZETTE OF PAKISTAN. EXTRA,, ru^-E 18, 2001 IP^RT I
"(xxii) any interest accrued on t)r atter' the frrst
day ol July 2OO1 on a non-perlormrng loan crediied lo
suspense account by a D€velopment ftnanLe rnslllulyJn ln
accordance with the Prudential Regulatrons for lranks and
such institutions issued by the State Bank of Pakislan'
(5) 3fter section 41, the following new section shall be Ins('ded' namely
"41A. Allowance for investment in shares - (1i An assessee'
olher than a ccrmpany shall ti'-' errtrll'rrl l" iin 1llo"'r;r'''" not exllr')elrli'rq len
per cent of tris income or one hundred tnousand rupees' whichever is the
less. invested in the lncome year commencing on or after the first day of
July,2OOl,inthepurchaseolnewsharesotferedtothepublicbyapublic
company listed on a stock exchange in Pakistan provided that the assessee
is the onginal allottee ol such shares' or listed shares' sold by the
Privatizalion Commission oI Pakistan'
(2t Where any share to which sub-secron (1) applies and in respect of
which any relie, in tax has been allowed to the assessee is disposed of by
sale, transfer or in any other manner within twelve months of the date of its
purchase, then, notwithstanding anything contained in this Ordinance' the
amount of tax payable by the assessee under the other provis'ons of this
Ordinance in respect ol the income year in which such share was so
disposed of shall be increased by an amount equal to the relief in tax
allowed to the assessee in respect of such shares (hereinafter referred to as
the said anDunt), and the sum so anived at or' where no tax is payable by
the assessee under the other provision of this Ordinance in respect of that
income year. lhe said amount shall be deemed to be the tax oayable in
respecl of that income year and all the povisions of this Ordinance shall so
far as may be, aPPIY accordingly ";
Elp!4algn ' For the purpose of thrs section the
expression 'Origanator', 'special Purpose Vehiclc' and
"securitization shall have the same meanrnq as are
respectively assigned to them in the Assets Backed
Securitization Rules. 1999
PART I TIIE GAZETTE OF PAKISTAN. EXTRA ., JIJNE 18. 20ol
(0 after section 44A, the following n6w sedions shall be inserted, namely__
"tl4AA. Retirement annuity scheme.- (.t) Where an indjvidual.
being a resident of Pakistan, is (or would but for the loss of profit or gains,
be) chargeable to tax,-
(a) in respect of any salary or remuneration from an office or
employment held by him which is nol a pensionable office or
employment or which does not provide any other retirerhent
benefits: or
tL, rn res;re!l ol ptoltt.lrld garns, acrjrurnq or arisinq, irorrr any
business or profession carried on by him.
he shall be enlitled to an allowance in respect of any sum pad
by him in the income year commencing on or after the first day
of July, 2001, by way of contribution or premium under a
contract of annuity scheme approved by SECp of an
insurance company duly registered under the lnsurance
Ordinance, 2000 (XXXIX of 2OO0), having for its rnain oblecl
the provision to the assessee of an annuir , .i old age
12) The amount o, allowance under sub-section (1) in a year st"dll not
exceed five per cent of the income or fifty thousand rupees whichever
is the less.
(3) No allowance shall be made under sub-secton (.1) in respect of a
contract which provides_
(a) for the payment during the life o{ the assessee of any sums
besides the sums payable as annuity,
(b) for the annuity payable to the assessee to commerrce before
he attains the age of sixty years:
that lhe annuity shall be capable rn whole or jn parl. ot
surrender, commutation or assignment or
3ll
(c)
GAZETTE OF PAKISTAN' EXTRA,. JUNE 18, 2mt IPARr I3t2 T}iE
(d) for payment of the annuity outsde Pakrslan'
44A.AA.' Allowance for maIk uP Paid - (1) An assessee
shall be entitled to an allowance in respect of any mark up paid by him in an
income year on a loan sanctioned and advanced on' or after' the first day of
July,2OO1. not exceeding six hundred thousand rupees by a Scheduled
Bank under a house finance scheme approved by the State Bank of
Pakistan or advanced by Govemment or a local authority or House Building
Finance corporation:
Proviled that -
(a) the maximum amount el(lible for an allowance shall not
exceed twenty five per cent of the income or Frfty
thousand rupees - whichever is the less:
(b) the loan is utilized for construction of new house or the
acquisition of a house; and
(c) no deduction for mark up has been claimed under
clause (e) or (ee) of sub-section (1) of section 20
(7) in sedion 50,-
(a) in sub-section (4), in the Poviso'
(i) in clause (i), -
(a) after the word "apply" the words "any payment on
accounl of securitization of receivables by a special
purpose vehicle to the orilinator o/' shall be inserted:
and
(I)
(b) the word and", attheend. shall be omitted'
in clause (ii), Ior the full stop. at the end. the semr colon and
word : and'shall be substituted and thereafter the following
new clause shall be added, namely -
"(iii) Where tax is withheld by any person responsible
for makirE any Paytn€nt to the Speoal Purpose Vehicle' on
PART I THE GAZETTE OF PAKISTAN, EXTRA , JUNE t8, 2001 :ltl
behalf of the originator. it shall be deposrted to the credrt oI the
orjginator;
(b) sub-sections (SAAA) and (58) shafi be omitted:
(c) in sub.seclion (6A), afler the wod ,deduct.. commas and words ...and
in case of bonus or bonus shares, collect,,. shall be inserted: and
(d) sub-secrions (Z). (7A) and (7G) shal be omitted;
(8) in sectbn 55, in sub-section (1), the commas. words. figures and brackets,,.
alongw[h the retum of wealth_tax in accordance with the Wea,th{ax Act.
1963 (XV of igt,3),sha be omitted:
(9) in section 56,-
(a) the full stop at the end a colon shall be substituted and thereafter the
foltowing proviso shalt be added, namely:_
''Provided that no notice under this sectton shall be issued
after the expiration of five years from the end of lhe assessment year
for which the return of income was due.,,. and
(b) the Explanation shafl be omitted:
(10) in section 58, the oxistirE sedion shall be Gnumber€d as sub,section (l) of
lhal soclbn and aier the sad sub_section, r€numberd as abr6sau, the
follorying nav sub.s€dion shall be addcd. narnely!
"(2). Where a person, who has fumished a weallh statement as
required under sub.sectjon (1), discovers any omission or wrong statement
therein, he may, without prejudice to any liability incuned by him uoder any
provision of lhis Ordinance, he-lray fumish a revised wealth statement at
any time before the assessment is made.":
314 THE GAZETTE OF PAKISTAN, EXTR-4.. JLINE 18, 2001 PART I
(1 1) in socrtion 59,-
(a) in sub-section (1), the words "a public company or" shall be omitted; and
(b) after sub-s€ction (3)' fhe following new sub-section shall be added
namelyi
'14) No order under sub-section (1) shall be made in any
case after lhe thirtieth day of June of the financial year next Iollowing
the income year in respect ol which a retum of total income has been
fumished under section 55:
Provided that if such order is not passed by such date' order
under su section (1) shall be deemed to have been passed on such
date.':
(12) section 62C. shall be omittedi
(13) in section 808, in sub-section (2),-
(a) after clause (a), the following new clause shall be inserted namely:-
"(aa) inlerest or profit on Directorate oI National Savings regular
income certificates and rnonthly inmme savings account scheme
where rnonthly installment exceeds one thousand rupees' in which
investrnent is made upto thirlieth June 2001 :
(b) in clause (bb), for the semrcolon, a colon shall be substituted and
thereafter the following proviso shall be added ' namely:-
"Provided that this clause shall not apply in respect ol any
assessment year commencing on, or after' the first day of July'
2002,': and
in clause (c), for the semicolon and word "; and" a colon shall be
substituted .,nd thereafter the following proviso shall be added
nam€ly:-
(c)
PART I] THE GAZETTE OF PAKISTAN, EXTRA.. JUNE 18, 2OOI 315
"Provided that this clause shall not apply in respect of any
assessmenl year commencing on, or afler, the first day of July,
2002i :
('14) in section 80C, in sub-section (2). for the fult stop, at the end, a colon shatl
be subslituted and thereafter the following proviso shall be added, namelv:-
'Provided that nothing in thrs section shall apply to amounts
referred to in clauses (ia). (iia) and (iir) of sub-sectron (2) in respect of
any assessment year commencing on, or after. the first day of July,
2002.,
(15) in section 80D, after sutrsection (2), the following new sub-section sha be
added. namely:-
'(3) Nothtng in this section shall apply to an individual, an
association of persons. an unreqistered firm or a Hindu undivided family in
resp€ct of any assessment year commencing on, or after, the first day of
July, 2001.",
(',6) in section 133,-
(a) for sub-section (3) the following shall be substituted, namely.-
'13) A judicial member shall be-
(i) a pe6on who has exercised the powers of a Districl
Judge and is qualified to be a Judge of a High Court or
(ii) a person who is, or has been, an advocate of a High
Court and is qualjfied to be a Judge of a High Court.";
and
(b) after sub-section (3). the following new sub-section shall be inserted,
namely.-
316 THE GAZET.TE OF PAKISTAN, EXTRA., JUNE 18, 2OOI [PART I
"(3A) An accountant member shall be an officer of the
lncorne Tax Group equivalent in rank to that of a Regional
Commissioner of lncome Tax.":
(17) rn seciion 138,
"Provided that no application for revision under sub-section (1)
against an order made under section 132 shall lie after the thirlieth
day oI June, 2001 ',
(18) in section 1438, for the words, figures, letters and commas "section 80C,
section 80CC or
seclion 80E", the words, figures, letters and mmmas "seclion 80BB' section
8OC. section 80CC or section 80CD" shall be substituted;
(19) in the First Schedule, in Part-|,
(a) in paragraph A, in the proviso, in clause (b) sub-clause (ii) shall be
omrtted
(b) after paragraph A, the following new paragraph shall be inserted,
namely:-
A1. Notwithstanding anything contained in paragraph A. in
the case of every individual, unregistered firm, association ol
persons, Hindu undivrded family and artificial luridical person referred
to in clause (32) of section 2, not being a case to which paragraph B
(a) in sub-section (1), for the full stop, at the end, colon shail be
substituted and thereaiter the following proviso shall be added,
namely:-
(b) in sub-section (5), in clause (c)' for the words "Regional
Commissioner of lncome Tax"' occurring for the first time lhe words
"Centrat Board of Revenue" shall be substituted and shall be deemed
always io have been so substituted;
PART I] THE GAZETTE OF EXIRA. JIJNE I8, 2OO1 3t't
of this part appties, the income tax shall be charged on the total
rncome, excluding income to which section BOB, g0BB, gOC.80CC or
80CD apply, for any assessment year commencrng on oi after the
firsl day of Juty, 2002, al the fo owing rates:
(1) where the tobt income
does not exceed
Rs.60,000
(2) where the total income
exceeds Rs.60,0OO but does
not exceed Rs.15O,O0O
(3) where the totat income
exceeds Rs.150,OOO but doesnot excsed RS.3OO.OOO
(4) where the total in@me
exceeds RS.3oO,OOO but does
not exceed Rs.400,000
(5) where the total income
exceeds Rs.400.OOO
but does not exceed
Rs.700,000.
(6) where the total income
exceeds Rs.700,OOO
Provided that -
(a)
7.5% of the
amount exce€dino
Rs.6O,OOO:
Rs.6,750 ptus i2.5%
of the amount
exceeding
Rs.150,000;
Rs.25,500 plus 20%
of the armunt
exc€ding
Rs.300,000;
Rs.45,500 ptus 25%
of the amount
exceeding
Rs.400.000.
Rs.120,500
plus 35% of the
amount exceeding
Rs.700.000
Nit
where an assesse's income includes any incorne from
agriculture which is liable to tax under the laws of any province
of Pakistan and such income exceeds Rs. EO,OOO, the tax
rates applicable in case of such taxpayers would be as under:-
(1) where the total income
does not exceed
Rs.150.000
7.5%
THE GAZETTE OF PAKISTAN, EXTRA.. JUNE 18, 2001
where the total incorne
exce€ds Rs.l50,000 but
does not excaed
Rs.300,000
where the total income
exceeds Rs. 300,000 but
does not exceed Rs'
400,000
where the total income
exceeds Rs. 400,000 but
does not exceed Rs'
700,000
where the total income
exceeds Rs. 700,000
Rs.'11,250 Plus 12.5%
of the amount
exceeding Rs '150,000;
Rs. 3O,OOO Plus 20olo of
the arnount exce€ding
Rs. 300,000;
Rs. 50.000 Plus 25% oI
lhe amount exceeding
Rs.400,000:
Rs. l25,OO0 Plus 35%
ol the arnount
exceeding Rs. 7@,000'
(2\
(3)
(4)
(b) fie tax payable shall be reduc€d by an amounl equal to tlfiy
p€r cent of he tax payable by an dssessg€ of sixty-five years
of age or above as on first day of lhe relevant income yeal and
eaming income upto ttrc hundred thousand rupees in addition
to any other rebate admissible under the law'
(5)
notwithstandirE anylhing contained in this Ordinance' no
robate for any albwance under sections 39' 40' 41 ' 43' 44'
44A or 46 shall be admissible'
notwithstanding anything contained in this Ordinance' rebate
for any allowance under sections 41AA' 44AA and 44AAA
shall be computed at the average rate of tax and allowed
accord ingly.
where the total income includes any income from a share of
the income profits and gains of a firm to which paragraph C of
Part ll applies. such portion of the super tax payable under the
sall paragrapn as Uears to the total amount of such super tax
the same proPortion as his shar€ of incorne, profits ard gains
of ths frm bears to the total income of the firm shall be added
to the income tax payable by such parlner under this
paragraph, and, if the sum so atived at exceeds 2lyo d tE
total incoms of such padner (induding his share of incotne'
(d)
(e)
IPARr I
3r8
(c)
THE GAZETIE OF PAKISTAN, EXTRA , JUNE 18, 2001 3t9
profits and gains of the firm before the deduclbn of super tax),
the amount of incorn€ tax payable by him under this paragraph
shall be reduc€d by tle arnount of suc+l ex@ss;
O br the Bjrpos€s of assessm€nl, the rates specif€d in aboye
panryraph will be applicable to the assessment year
commencir,tg on, or afrer, thei st day of July 2002;
(g) notwithstanding the provisions of claus€ (0 of proviso to
paragraph Al wher" the total incorne of an assess€e
comprises or indudes any income dtarysable under the head
'salaqf and sudl incoms is rnorB than lifiy per cent of his total
income, the rales spocifed in this parairaph for the purposes
of deduction of tax under suMion (1) of s€clion SO sha be
effective fiom the tirst day of July, 2OO1;
(c) in paragraph CC,_
(a) in sub-paragraph (d), for the semicolon, a colon shall be
substituted and thereafter the following proviso shall be added,
namely:-
"Provided that this sub_paragraph shall not apply in
respect of any assessment year commencing on, or afier, the
first day of July, 2002.,';
(b) in sub-paragraph (e), in clause (ii), the full stop, at the end. a
colon shall be substituted and thereafter the follorring proviso
shall be added, namety:-
"Provided that this sub_paragraph shall not apply in
respect of any assessment year commencing on, or afler. tha
first day of July, 2002.";
(d) in paragraph CCC._
(a) in sub..paragraph (i),-
PART I]
320 THE GA4TTE OF PAKISTAN, EXTRA., JLINE I8, 2OO1
(i) atter the wotd "Person'. the words "holding a National
Tax Number and' shall be inserted;
ii) in clause (cc), in the prcviso, for lhe somicolon and
word ": and' a colon shall be substituted and thereafter
the following fudher Pmviso shall be added' namely:-
"Prcvk ed turther that this clause shall not apply
in rgsped of any agsessrnent year commencing on' or
afier, th€ first day of JulY, 2002i;
(b) in clause (dd), the full stop, at the end' a colon shall be
substituted and thereafter the lollowing proviso shall be added'
namely:-
"Provided that this clause shall not apply in respect of
any assessment year mmmencing on' or afrer' the first day of
Ju|Y.2002.":
(c) in clause (e), for th€ full stop, at the end' a colon shall be
subslituted and thereafrer th€ following poviso shall be added'
namelYi
.Provided that this clause shall not apply in respect of
any assessrnent year commencing on' or after' the firsl day of
Ju|y,2002.";
(d) afrer sub-paragraph (i), the bllowirE n€\ sub-paragraph shall
be inserted, namelY:-
'(ia) in th€ cas€ of evary resi,ent person not holding a
Natbnal Tax Number and b whom sedbn 80C
aPplies, from tle assessmenl year commencing on' or
alier, the first day of July, 20Ot on th€ incorno
rspl€sontirE Pay]rBnts on account of 6x6cution of
contracis oth€r than tho incorne to which daus6 (b) or
IPARr I
THE GAZETTE OF PAKISTAN, EXTRA., JUNE 18,2OOI
(c) or (cc) of sutsparagraph (i) apply-
(i) where the value of
contract does not
exce€d thirty million rupeos.
32r
(ii) where the value of
contract exceeds thirty
million rupees.
on the income
representing payment
on account of supplies
(ii)
seven per cent
of such income.
eight per cent of
suct income.
five per cent of
such inmme.";
(iii)
(e) in paragraph CCCC, after figure "80CC." the word and flgure
"or SoCD" shall be inserted;
(a) in sub-paragraph (i) affer the word 'assessee" the
words "holding a National Tax Numbe/', shall be
inserted: and
(b) afrer sub-paragraph (i), the ficllowing new suF
paragraph shall be ins€rled, namelyi
"(ia) Where lhe payment is made to a resident
assesse€ not holding a National Tax Number,
on ac@unt of ex€sjtion of contrad other than
th6 paymenB to which sub clause (b), (c) or (d)
of suFparagraph (i) apply-
(i) where the value of
contract does not exc€ed
thirty million rupees.
seven per cent
ol such
income.
(iii)
where the value of
contracl exceeds thirty
million rupees.
eight per cenl
of such
in@me.
five per cent of
such incame.";
on the income
representing payments
on account of supplies
(S) paragraphs FFB, FFF, GGG and H shall be omitted;
P,qnr Il
(f) in paragraph E,-
322 TIIE GAZETTE OF PAKISTAN, EXTRA., JI]NE 18,2OOI [PART I
(h) in paragraph K, lor suuparagraph (a) the following shall be
substituted, namely:-
"(a) in the case commercial consumer if the electricity bill
(i) does not exceed Rs.400 Rs
(ii) exceeds Rs.400 but does not exceed
Rs 600
Rs
(i) paragraph M shall be omitted;
(c) in Part-lll,-
(a) in paragraph B,
(i) in suuparagraph (c), the full stop, at the end, a colon
shall be substituted and thereaffer lhe following proviso
shall be added. namely:-
(ii) in suFparagraph (d), in the proviso, for the full stop, at
the end, a colon shall be substituted and thereaftsr the
following fudher proviso shall be added, namely:-
"Provided further that no surcharge under lhis
sub-paragraph shall be payable for the assessmeni
(iii) exceeds Rs.600 but does not exceed
Rs.800
Rs. '100
(iv) exceeds Rs.800 brrt does not exceed
Rs.'1000
(v) exceeds Rs.1000 but does nol exceed
Rs.1500
Rs. 300
Rs. 450
Rs. 600
(viii) exceeds Rs.4500 but does not e)ceed
Rs.6000
Rs.750
(ix) exceeds Rs.6000 Rs. 1000:
"Proviled that no surcharge under this sub.
paragraph shall be payable for the assessment year
commending on, or afrer, the ,irst day of July,2OO2;';
Rs. 160
(vi) exceeds Rs.1500 but does not exceed
Rs.3000
(vii) exce€ds Rs.3000 but does not exceed
Rs.4500
PART THE GAZETTE OF PAKISTAN. EXTRA ., ruNE 18,200t 323
year @mmencing on, or afrer, the Iirst day of July,
2002;':
(b) in paragraph C, the figuros and $od ,80C or 80CC" the
- fgures, commas, word and a colon .8OBB, g0C, g0CC or
80CO:" shall be substituted and th€realter th€ bllowing
proviso shall be added, namelyi
(d) in Parl-V,-
(a) in paragraph A for the figures and word .80C and 8OCC,the
fgures, commas and word "BOBB, BOC, 8OCC and BOCD,,
shatt be substituted:
(b) affer suFparagraph (3), the blloriring new sub.paragraph shall
be addod, namelyi
"(4) in respoct of the assessment year comrnencing on, or
ater, the frst day of July, 2002,-
(a) in case of a
banking company 50%
(b) in case of a
public company other
than a banking company 35%
(c) in case of any
other company 41yo..,:
(c) in paragraph C, the words "and surcharge" shall be omitted
and deenEd to have been so omitted on the lirst day of July,
2000; and
(a) in sub paragraph (a), for the words ,.other then a
'Provided that no surcfiarge under this sub.paragraph
shall be payable for the assessrnent year commencing on or
afrer the lirsi day of Juty , 2@2.";
(a) in paragraph D,
324 TIIE GAZETTE OF PAKISTAN, EXTRA.. JUNE 18, 2OOI
company carrying on insuran@ busingss" the
words and figures, "other than the divi'end
received upto thirtieth June, 2OO1 by a public
company carrying on insurance business' shall
be substituted;
(b) in th€ first proviso, the r^/ords'and transmission
line Poiects" shall b€ omitted: and
(c) in second proviso afrer the wod 'lgceived" ' the 
^
fgures, wods and comma 'upto thirtieth June'
2001" shall be inserted:
(20) in the Second Schedule'
(i) in Part-|,-
(a) aftsr clause (7E), the iollowing new clause shall be inserted'
namely
"(7F) Any incorne chargeable under the h€ad salary
received by a Pakistani sea{arer working on a forei{Jn vessol
provided that such incomo is remitted to Pakistan' not later
lhan l$to rpr hs of the relevant incorne year' through normal
banking dEnnds.';
(b) in clause (398)' after the word 'airline' the words "or bY Civil 
^ 
;
Avration Authority " shall be inserted'
(c) in clause (77C), in the second proviso' the full stop' at the end'
a colon shall be substituted and thereafter' the following
further pmviso shall be added' namely:-
"Provided further that the exemption under this clause
shall not apply in respect of profit received on any investment
made in the aforementioned deposit certificates on' or after'
the first day of JulY, 2001 ";
I
a
PART TTIE GAZETTE OF PAKISTAN, EXTRA , JUNE 18.2001
(d) in clause (77D), in the proviso, for the tu stop, a mlon shalt be
substituted and thereafrer, the following further proviso shall
be added, namelyi
"Plovided further that th€ exemptbn under this clause
shall not apply in resp€d of pmft received on doposits made
on, or ansr, tho frBt &y of July,2@1 .";
(e) in clause (77E), br the tuI stop, at the end, a coton sha be
substituted and thereafter the following proviso shall be added,
namely:-
"Provided that the exemption under this clause shall not
apply in respect of investment in such scherne made on. or
after, the first day of Juty, 2001 ,,:
(f) in clause (8OA), tor the fu stop, at tho end, a aobn shafl be
substituted and thereafrar bllowing proviso shall be added,
namely:-
(9) in clauses (giA), br the full stop, at the end, a coton sha be
substituted and th€reafler following proviso shall be added,
narnely:-
'Prcvided that the exemption under this clause shall not
spply in rosped of any ass€ssm€nt year commencing on, or
after, th6 first day of July,2@2.";
(h) in dauses (918), for the tult stop, at the end, a colon shalt be
substituted and thereafier following ploviso shall be added,
narnelyj
t
325
'Provided that the exerndix und€r this dause shall nol
apply in Espect of any assessment !,€ar comrn€ncing on, or
after, th€ first day of July, 20O2.":
OF PAKISTAN, EXTRA., JtrNE 18,2001 [PART I
326 THE GAZET'TE
'Pmvi.r€d that lhe oxerption under this dausa shall not
epply in re6p€d of any assassrn€nt year commencing on' or
afier, the first day o{ JulY, 20q2 ';
(i) clause (1oB) shall b€ omified;
(i) in chuso ('116), brthe figure 2002" the fgure 2005" shall be
substituted
(k) clause (171) shafi be omined:and
(ii) in Part-ll, after clause (5), the following new clause shall be inserted
namelY:-
"(5AA) ln case of any individual, being a resident' the tax from profit or
interest of any National Savings Schemes of Oirectorate of National Savings
or Post Oflice Savings Account in which investntent is made on' or after'
the first day of July, 2001, shall be deducted at the rate of ten per cent of
such pmfit or interest;
Provided that no tax shall be deducted from income or profits paid
on-
(a) Defence Savings Certilicates' Special Savings Certificates'
Savings Accounts or Post Ollice Savings Account' made on'
or after, the lirst day ol July' 2OO1' \r/here such deposit does
not exceed three hundred thousand rupees: and
(b) invest nent in Monthly lncom€ Saving Accounts Scheme of
Directorate of National SavangE on' or after' the frst day of
July, 2001, wtEre rlonthly installment in an account does not
exce€d one thqlsand ruPees'";
(iiD in Partlll, in clause (18)'-
in sub-clause (1)' in the Schedule' S No't and the entries relating
(a)
thereto shall be omitted; and
5
PARr Il TIIE GAZETTE OF PAKISTAN, EXTRA., ILINE 18, 2001
(b) in sub-clause (2), afrer the word "institution',, the words "including
govemment training and research institution' shall be inserted: and
(iv) in Part-|V,,
"(108) The provision of sub-section (7D) of section 50 shall not
apply in respect of profit or interest paid on a Term Finance
Certificate held by a company which has been issued on, or after,
the first day of July, 1999.";
(c) clause (32D) shall be omitted;
(d) after clause (32F), lhe following new clause shall be inserted,
namelyi
"(32G). Nothing in section 80D shall apply to Corporate and lndustrial
Restrucluring Corporation.";
(e) after clause (33), the following new clause (33A) shall be inserted,
namely:-
'(33A) The provisions of sub-section (4) of section 50 shall not apply
to payments received by Pak-Arab Relinery Limited on account of
supply of its products."; and
(0 in clause (59), for sub-clause (i), the following shall be substituted,
namely:-
'(i) a company listed on Stock Exchange which distributes profit
equal to either forty per cent of its afrer tax profits or fifty per cent of
its paid up capital, whichever may be the less:"; and
(a) for clause (108), the following shall be substituted, namely:-
(b) in clause (20), the words, brackets and figure "and clause (178)",
shall be omitted:
328 THE GAZETTE OF PAKISTAN, EXTRA., JLrNE 18, 2001
(21) in the Thitd Sdtedule, -
(a) in rule 2. in the table. afler entry number lVA, the following new entry
shall be inserled, namely:-
'IVAA. Personal computer hardware 30%
(b) in rulo 5A,-
(i) afrer the word "equipmenf', occuning for the first time, the
commas, words, figures and letters ", other than machinery'
plant and equipment entiUed to first year allowance under rule
5AA," shall be inserled;
(ii) in the Table,
(a) in entry C, paragraph (iii), after the word "developrnent'
occuring for the second time the words and commas
'and tourism, hotels and tourism related prorects,
housing and construction, infrastructure and agriculture
poecls.", shall be added; and
(b) in entry E,-
(1) the word and comma 'inkastructure,' shall be
omitted; and
(2) after the word "sector"' the words "other than lhe
agricutture proiects specmed in entry C (iii)" shall
be inserted;
(iii) affer rule 5A, amended as abresaid' the follorving new rule
shall b€ ins€rted, natnely:-
"5M. Where any nrachinery, plant and equipment
(0$6r than rnotor vehides not plying ,or hire and shlps
not beir€ fishing tl-awlers) is given on lease br th€ first
tirn€ on, or after, the first day of July, 2000, by an
I
PART I] THE GAZETTE OF PAKISTAN, EXTRA , JUNE 18, 2OOI 329
.'
assessee being an inveslrnent bank or a modaraba or
a l€asing company, further depreciation by way of First
Year Allowance equal to thirty per cent of the written
down value shall be allored to such assessee in
respecl of the year in which such machinery, plant or
equiprnsnt (other than motor vehides not plying for hire
and ships not b€ing lishing trawlefs) is given on lease
for lhe first time on, or afrer, the first day of July, 2000:
Provired that no allo,vance shall be admissible
under this ruls where such allowance has been availed
prevbusly urd€r this rul€ or rules 5, 5A or 58 in respect
of afoesaid assel.
Explandion.- For the purposes of this rule lhs
expression "investment bank' rneans a company
inco.porated under the Companies Odinance, 1984
(XLVll of 1984), which has been grantsd a license by
the Federal Govemment to operate as an investm€nt
bank.";
(iv) in rule 58, ater the word 'plant', ocorning for the first time, the
@mmas, words and fgur€s ", other than machinery, plant and
equipment enlited to a Filst Year Allowance under rule 5A or
rule 5AA," shall be insefted;
(v) in rule 7, in sub rule (a), for the word aM fgure "or 5" the
commas, figurcs and word ", 5, 5A, 5AA, 58 or 5C shall be
substituted;
(vi) in rule 8,-
(D in sub-rule (5), in the second proviso, tcr the wods "six
hundred thousand' occuning twice, the words "seven
hundrcd and fifry thousand" shall be substituted; and
(ii) in sub-rule (8), in clause (a), for the words 'six hundred
330 TTIE GAZETTE OF PAKISTAN, EXTRA,, JUNE 18,2OO1 IPART I
thousand", the words "seven hundred and fifry
thousand' shall be substituted."; and
(22) ' in the Fifth Schedule, in Partl,-
(a) in rule 2, in sub-rule (5), after the word "expenditure" occulring for the
first time, the words and commas ",including royalty paid to the
Govemment by an onshore petoleum exploration and production
undertaking on, or after, the tirst day of July, 200'1," shall be inserted:
and
(b) in rule 4, in sutrule ( l ),-
(a) after the words "other payments , the words, brackets,
ligures and commas. "excluding royalty as specified in
the Pakistan Petroleum (Production) Rules, '1949 or the
Pakistan Petroleum (Exploration and Production)
Rules, 1986 and pakl by onshore petroleum exploration
and produclion undertaking on, or after, the lirst day of
July, 2001,", shall be inserted; and
(b) in the prcviso, for the full stop, at the end, a colon shall
be subslituted and thercafler the following further
proviso shall be added, namelyi
'Provided further that in respect of
assessment year comrnencing on, or afier, the
first day of July, 2002 the said aggregate shall
not be less than fody percent of the profit or
gains derived by an onshore petroleum
exploratbn and poductbn undertaking beforo
the deduction of payment exduding royalty paid
by an onshore company to the Govemment.".
a
PART THE GAZETTE OF PAKISTAN, EXTRA., JT'NE 18, 2OOI 331
6. Amendments in Salcs Tax Act, 1990.:- The following amendments shall be
made in The Sales Tax Act, 1990, namely :-
(1) in section 2,-
(a) in clause (14), in sub-clause (c), after the word 'person", at the end,
the words, figures, commas, and brackets "and shall include duties
of excise chargeable under section 3 of the Central Excises Act,
1944 (l of 1944), on such excisable services as are notified by the
Federal Governmenl under the lhird proviso to sub-section ('1)
thereof and on which such duties are charged, levied and paid as if
it were a tax payable under section 3 of this Act", shall be added;
(b) in clause (20), after the word "person", occuring at the end, the
words, figures, commas and brackels "and shall include duties of
excise chargeable under section 3 of the Central Excises Act, 1944
(l of 1944) on such excisable services as are notilled by the Federal
Government under the third proviso to sub-section ('1) thereof and
on which such duties are charged, levied and paid as if it were a tax
payable under section 3 of this Act'', shall be added;
(c) in clause (25), after lhe word "Act" the words, brackets, figures "and
such pe6on shall remain liable to further tax under sub-section
('lA) of section 3 and shall not be entitled to any benefit available to
a registered person under any of the provisions of this Act or rules
made thereunder.", shall be added;
(d) in clause (33), after the word "rinancial" the words "or operating"
shall be inserted;
(e) in clause (46),-
(a) in clause (a), in the proviso, -
in clause (i), the word "and", at the end, shall be
omitted;
in clause (ii) after the semicolon, the word "and" shall
be added: and
a
(i)
332 THE GAZE TTE OF PAKISTAN, EXTRA., JUNE 18,2OOI RTI
(iii) alter clause (ii) amended as afotesaid' the following
new clause shall be added' namely:-
''(iii) in case a taxable supply is made to a
consumer trom general public on installment basis on
a price inclusive of mark up or surcharge rendering it
higher than open markel price, the value of supply
shall mean the open markel price of the supply
excludrng the amount of tax ' ; and
(b) rn the second proviso' after the word "shall" the commas
and words ", unless otheMise dlrected by the Board' " shall
be inseied and shall be deemed to have always been so
inserted:
(2\ in section 3. -'
(a) rn sub-section (1A), -
(i) for the words "one and half , occurring lor the first time' the
word "three" shall be substituted;
(ir) for the brackets and letter "(c) the brackets and letter "(a)"
shall be substituted: and
(rii) in the proviso, the words'one and hall percent shall be
omitted;
(b) for sub-section (2), the following shall be substituted' namely'-
-l2l Notwithstanding the provrsions of sub-section (1)'
(a) taxable supplies specified in the Third Schedule shall
be charged io tax at the rate oI fifteen per cent of the
retail price which alongwith the amount of sales tax
shall be legibly, prominently and indelibly printed or
embossed by the manufaclurer on each article'
packet. container. package' cover or label as the
case may be. and
PARr ll THE GAZETTE OF PAKISTAN, EXTRA , JUNE 18, 2001
"(b) the Federal Govemment may, subject to such
conditions and restrictions as it may impose, by
notiflcation in the official Gazette, declare that in
respect of any goods or class of goods imported into
or produced in Pakistan or any taxable supplies made
by a registered person or a class of registered
persons, the tax shall be charged, mllected and paid
in such manner and at such higher or lower rate or
rates as may be specified in the said notificalion.";
and
(c) after sub-section (5), the following new sub-section shall be added,
namely: -
'(6) The Federal Government or the Central Board of
Revenue may, in lieu of the tax under sub-section (1), by
notilication in the official Gazette, levy and collect such amount of
tax as it may deem fit on any supplies or class of supplies or on any
goods or class of goods and may also specify the mode, manner or
time of payment of such amounl of tax .";
(3) in seclion 7, in sutssection (1), afier the word "shall", the commas, words
and figure '', subjeci to the provisions of seclion 73," shall be inserted:
(4\ in section 10, in sub-seclion (1), in the first proviso, atter the word, "shall",
the commas and words ", unless otheMise directed by the Board under
exceptional circumstances," shall be inserted;
(5) in section 19, for the full stop at the end, a colon shall be substituted and
thereater the following proviso shall be added, namely:-
"Provided that if it is subsequently established that a person who
was not liable to be registered but war wrongly registered under this
section due to inadvertence, error or misconstruction. the Collector shall
cancel such registeration and such person shall, subject to the provisions
TIIE GAZETTE OF PAKISTAN, EXTRA., JUNE 18. 2001 [PARr I
of section 38, not be liable to pay any tax, additional tax or penalty under
any of the provisions of this Act or rules made thereunder. ',
(6) in section 21 , in sub-section (1), for the words "through an audit", the words
"either through an audit or otheMise" shall be substituted;
(7\ Ior section 34A, the following shall be substituted, namely:-
"34A. Exemption from Denaltv and additional tax. - The Federal
Govemment may, by a notification in the official Gazette or the Central
Board of Revenue by a special order published in Gazette for reasons to be
recoded in writing, exempt any person or class of persons from payment of
the whole or part of the penalty and additional tax imposed under sections
33 and 34 subject to such conditions and limitations as may be specified in
such notification or, as the case may be, special order.';
(8) in section 46, -
(a) in sub-section ('1). Ior the word thirty', the word "sixty' shall be
substituted;
(b) in sub-section (3), for the words 'one thousand", the words, "seven
hundred and fifty" shall be substituted; and
(c) after sub-section (7), the following new sub-section shall be added,
namely:
'18) Subject to the provisions of this Act or any other law for
the time being in force, the Appellate Tribunal shall have power to
regulate its own procedure and the procedure of the Benches thereof
in all matters arising out of the exercise of its powers or of the
discharge of its functions, including the places at which the Benches
shall hold their sittings."i
334
(9) for section 55, the following shall be substituted, namely:-
PART I TI.IE GAZET'|E OF PAKISTAN JUNE 18,2001 335
"55 Removal of difficulties. _ lf any diffculty arises in giving effect to
the provisions of this Ac1 or the rules made or notmcations tssued
thereunder, the Board may through a generar order or othe*ise. issue
instructions or direclions, not in@nsistent wjth the provisions of this Act. for
such actions to be taken by an ofi)cer of sales tax or any other person as it
considers necessary or expedient for the purpose of removing the difficulty.,,;
(10) in section 66, for the fu[ stop, at the end, a coron shar be substrtuted and
thereafter the following proviso shall be added, namely:
"Provided that in a case where the refund has become due on
account of any decision or judgement ol any officer of sales tax or
court or the Tribunal. the period of one year shall be reckoned from
the date ofjudgement or decision of such offlcer. murt or Tribunal.,,:
(1 1) in section 73.--
(a) afrer the word ,Act", o6suning for the semnd time, the words"pr.ovi,Ced that payment, in case of such transaction on credit, is sotransfened within one hundred and t\,t/enty days of issuance of taxinvoic€", shall be added: and
(b)
(12) in the Fifth Schedule, _
for the full stop, at the end a colon shall be sutstituted and thereafrer
the following proviso shall be added, narnely:_
'Provided that when a registered person supplies taxablegoods for a sum exceeding fifty thousand rupees in respect of whichpayment is received otherwise than in the manner prescribed in thisseclion read with section 7, he shall nol be entided to claim
ad.justment or refund of input tax in respect of such goods."; and
(a) after serial No. S in column (1) and the entry relating thereto incolumn (2). the tollowing new serial numbers and enlries relatingthereto shall be added, namely:_
316 THE GAZETTE OF PAKISTAN EXTRA.. JUNE 18, 2001 Penr I
Supplies of such locally manufactured plant and machinery
to the Export Processing Zones as may be specilled by the
Federal Government, by notification in the ofiicial Gazette'
subject to such conditions and restrictions as may be
specified in such notilication'
"6
7 Supplies made to exporters under the Duty and
Remission Rules, 2OOl subject to the observanc€
Tax
of
procedures, restrictions and conditions prescribed therein'";
and
(13) in the Sixth Schedule' -
(a) in serial No. 3 in column (1), in column (2)' Ior existing entry (iv)' the
following shall be substituted, namely:-
"(iv) Fresh and dried milki milk preparations obtained by
replacing one or more of the constituents of milk by another
subslance, whether or not packed for retail sale' falling
under Heading No. 1901 of the First Schedule to the
Customs Act, 1969 (lV ol 1969)' including those
consignments of such milk preparations imported and
released against bank guarantee since the l"rJuly' 2000' but
excluding those consignments already cleared on payment
of sales tax, plain yogurt excluding packaged or sold under
trado mark or brand name.";
3A Eggs lor hatching (parent stock)' 0407 0020"1
including consignments of such eggs
imported either against bank
guaranlee or otheMise but without
Payment of sales tax since the 1"r
July, 1S98.
(b) after serial No 3 in column (1) and the entries relating thereto in
columns (2) and (3), the following new serial number and enlries
relating thereto shali be inserted' namely;-
PART I] TIIE GAZETTE OF PAKISTAN , EXTRA.. ruNE 18, 2001
"6 Vegetable ghee; desi ghee derived
from milk: butter not sold under brand
name or lrade mark and supply of edible
oils.
33'1
(c) for serial No. 6 in column (1), for the entries in columns (2) and (3)
relating thereto, the following shall be substituted, namely:-
,
Respective
headings";
(d) serial No. I in mtumn (1) and the entries relating thereto in
columns (2) and (3) shall be omifted;
(e) in seriat No. 1 1, 
-
(a) in colurnn (2), afler the word .Contraceptives,, the words
"and accessories therefo/, shall be added; and
(b) in column (3), for the word and Ugures .and 4014..t000,,, the
comma, figures and word ,., 4014..1000 and 9908.0050,, shall
be substituted;
(f) in serial No. 14 in column (1), in column (2), for the word ,,attract,. 
,
the words, figures and comma, .,attracted during the period from .lsr
July, 1999 to 17h June, 2001,', shalt be substituted;
(9) in serial No.15, in colurttn (2), for the word .attract,, , the words,
figures and comma, ,,attracted during the period from 1"r July, .19g9
to l7h June, 2001,,, shalt be substituted:
(h) for serial No. 26 in column (i) and the entries relating thereto in cotumns
(2) and (3), the following sha be substituted, namety:_
"26 Goods (incrudins dry fruits imporfed rr", 
BBBB BB3B
Afghanistan) temporarily imported into and
Pakislan, meant for subsequent exportation 9906 0040";
charged to zero-rate of customs duty
THE GAZE'ITE OF PAKISTAN, EXTRA., JUNE 18.2001
(i) in serial No. 27, in column (1),-
(a) in column (2), for the word "exemption"' the words "applying zero-
rate of customs duty" shall be substituted; and
(b) in column (3), lor the words "Respective headings"' the figures
"9906.001 O', shall be substituted;
(a) in column (2), for the word "exemption 
" 
the words "applying zero-
rate of customs duty" shall be substituted; and
(b) in column (3), for the words "ResPective headings"' the llgures
"9904.001 0", shall be substituted;
(k) in serial No. 30, in column (1). 
-
(a) in column (2). for the word "exemption"' the words "applying zero-
rate of customs duty" shalt be substituted; and
(b) in column (3), for the words "Reqpective headings"' the figures
(t)
"9902.0060", shall be substituted,
in serial No. 31, -
(a) in column (2)'
(i) the words "of no commercial value" shall be omitted; and
(ii) lor the word "exemption"' the words "apptying zero-rate of
customs duty" shall be substituted; and
I
338
subject to the similar restrictions, limitations'
conditions and procedures as are envisaged
for the purpose of applying zeto.fale of
customs duty on such goods under the
Customs Act, 1969 (lV of 1969)'
0) in serial No. 28, in column (1),-
I
PART IJ TTIE CAZETTE OF PAKISTAN . EXTRA . JUNE 18.200t 339
(b) in column (3), for the words .'Respective headings,,, the figures
"9902.0070" shaI be substituted:
(m) after serial No. 36 in column (1) and the entries relating thereto in cotumns
(2) and (3), the following new serial number and enlries relating thereto
shall be inserted, namely:-
"364 lmport of ship stores, subject to the
procedures, condjtions and restriclions as
may be spec,fied by the Collector of
Customs in this behalf inctuding those
consignments of such stores that have been
released without charging sales tax since
the 1'r July, 1998 but excluding such
consignments of ship stores as have been
cleared on payment of sales tax.
Respective
headings";
(n) in seriat No. 40 in column (1), _
(a) in column (2), after the word ,Government',. at the end, the words,
commas and figures, ,,provided that such goods are charged to
zero-rate of customs duty under the Customs Act, .,969 and the
conditions laid down for customs purposes are observed.,shall be
added: and
(b) in column (3), for the wods ,,Respective headings", the figures and
commas and word "990i.0010, 9901.0020, 9901.0030, 9901.0040,
99b1.0050 9901.0060 and 99or.oo8o,,sha be substitured;
40A lmporl of artictes of househotd and gg01.OO7O,;
personal effects including vehicles and also
th6 goods for donatjon to projects
established in Pakistan imported by any of
(o) after serial No. 40 in column (.1) and the entries relating thereto in columns
(2) and (3), the following new serial number and the entries relating
thereto shall be inserled, namely:_
Tl{E GAZETTE OF PAKISTAN, EXTRA., JTJNE 18. 2OO1 IPART I340
the rulers of Gulf Shdikhdoms who is in
possession of residsntial accommodation
in Pakistan and goods including vehicles
by the Unitod Arab Emirate dignitaries as
are listed in column (2) against h€ading
No. 9901.0070 of lhe First Schodule to the
Customs Act, 1969 (lV of 1969) for their
personal use and for donation lo welfare
projects established in Pakistan subject to
the similar conditbns as are envisaged for
the purposes of applying zero.rate of
customs duty on such goods under the
said Act.
(p) in serial No. 46, in column ('l), 
-
(a) in column (2), for the word "exemption", the words "applying zero-
rate of customs duty" shall be substituted; and
(b) in column (3), for the words "Respective headings' the figures' words
and a bracket "9903.0010, 9903.0020, and 9903 0030 (as
applicable)" shall be substituted;
(q) after serial No. 46 in column (1) and the entries relating thereto in columns
(2) and (3), the following new serial number and entries relating ihereto
shall be added, namelY:-
"46A Goods impo(ed by ol donated to hospitals
run by the Federal Govemment or a
Provincial Government; and non-profit
making educational and research
institutions subject to the similar restrictions,
limitations, conditions and procedures as
are envisaged for the purpose of applying
zero-rate of customs duty on such goods
under the Customs Act. 1969 (lV of '1969):
9903.0010,
9903.0030
and
9903.0040":
PART I] THE GAZETTE OF PAKISTAN, EXTRA., JTINE I8.2OOI 341
(r) in serial No. 47, in column ( j ), -
(a) in c.' rmn (2),
(i) after the word, 'consignments". the words and commas
"including goods imported for the President's Fund for
Afghan Refugees, relief goods donated for Afqhan
Refugees, gitts for Presidents Fund for Assistance of
Palestine and gifts received by Pakistani organizattons from
Church World Services or the Catholic Relief Services shall
be inserted: and
(b) in column (3), for the words .,Respective headings,,,
commas and the word "9902.0010, 9902.0020,
9902.0040 and 9902.0050" shall be substituted;
the figures,
9902.0030,
(s) after serial No. 58 in column (1) and the entries relating thereto jn columns
(2) and (3), the following new serial number and entries relating thereto
shall be added, namely:-
"59 Import of artificial kidneys, eye cornea,
hemodialysis machines, hemodialyzers,
A.V. fistula needles, hemodialysis fluids
and powder, blood tubing tines for
dialysis and reverse osmosis plants for
dialysis, subject to the similar conditions
and procedures as are envisaged for the
purpose of applying zero-rate of customs
duty on these goods under the Customs
Act, 1969 (tV of 1969).
9908.0040
(where
applicable) and
9908.0060"; and
(t) at the end, the following special rule of interpretation shall be added,
namely:-
(ii) for the word "exemption", the words ,,applying zero-rate of
customs duty" shall be substituted: and
342 THE GAZETTE OF PAKISTAN, EXTRA., JUNE 18,2OOI IPARr I
'lnterpietation.-- For the purpose of exemption of sales tax-under serial
Nos. 11,26, ?7,28,30,31,40,40A,46,46A,47 and 59 of this Schedule'
the derinitions, restrictions, limitations, conditions and procedures and all
the provisions of Chapter 99 of the First Sciedule to Customs Act, 1969 (lV
of 1969), for the purpose of applying zero-rate of customs4uty, shall,
mutatis mutandis apply and shall be deemed and construed to be part of
this Schedule."
7. Amendment of I of 2000 .* ln the.Khushhali Bank Ordinance 2000(XXXIl
of 2000), section 29 shall be omitted
TIIE SCHED
ISee section e)l
..THE FIRST S LTLE
GENERAL RULES FOR TATION OF T IS SCHEDUI,E
l. The titles ofSection, Chapters and ub-Chapters are ded fbr ease ol retbrence
only; for legal purposes, classifi shall be de ined according to the terms
Notes and, provided suchof the headings and any relati Section or Cha
headings or Notes do not ot se requrre, hg to the following provisions.
2. (a) Any reference in a h to an article I be taken to include a relerence
to that afticle incomp te or un-finis , provided that, as presented, the
or tinished article. It hall also be
essential charactcr of the complete
to include a reference to that article
incomplete or unfi article has
complete or fi (or thlling to classified as complete or finished by
virtue of this Rule presented u sembled or disassembled
(b) Any reference i a heading ir material or substance shall be taken to in-
clude a re to mixtu or combinations of that material or substances
with other ials or s stance. Any reference to goods of a given mate-
rial or subs shall taken to include a reference to goods consisting
wholly or
consisting
principles
yofsu
more
material or substance. The classification of goods
one material or substance shall be according to the
f Rule
3. When by appli tron f Rule 2(b) or for any other reason, goods are, primr facie,
classifiable u o or more headings, classification shall be effected as
follows
rng which provides the most specitic description shall be preferred
L.
(a) The
toh ngs providing a more geoeral description. However. when two or