Updated: Saturday July 10, 2021/AsSabt Thoul Hijjah 01, 1442/Sanivara Asadha 19, 1943, at 07:02:01 PM

The Finance Act, 2020

 

REGISTERED No. M - 302

L.-7646

EXTRAORDINARY PUBLISHED BY AUTHORITY

 

ISLA1\i1ABAD, TlJESDA"'\-' , JUNE 30, 2020

 

 

PA RT I

 

Acts, Ordinances, President's Orders and Regulations

 

NATIONAL ASSEMBLY SECRETARIAT

 

Islan1abad, the 30£h June,  2020

 

No.   f'.  22(35)2020-Lcgis.- The   fol\o\ving   Act   of   A1ajlis-e-!'!,'hoora

{Pflrl i a171cn t) received  the  assent of the President  on  the  30th June,  2020  is hereby' pu blished for general informat ion:-

 

[ACT No. XI X t1F 2020]

 

AN

 

ACT

 

tt1 .r:h•e effr·ct  to lhe _financial j )roposals of the Federal Govern1nl!nl for  the J't?-ar

heginning on the first day of Jul)', 2020 and to u1nend certai11 lmvs

 

\VHEREJ\.S it is exped ient to make provisions to give effect to the financial proposals of the Federal Govern1ne nt for the year begi nning on the first day of July, 2020 and to amend certai n ]a\VS for the purposes hereinafter appearing;

 

 

(285)

 

Price : &. 210.00

 

[5664 (2020)/Ex. Gaz.]

286         Tl-IE GAZE-ITE OF PAKISl'AN, EXTRA., JUNE 30. 2020                                                                                [PART I

 

It is hereby enacted as follo'\'.'S:-

 

I .     Short title and  com mencernent.--( I ) 'f his  •\ct sha!l be calJed the

Finance Act, 2020.

 

(2)  It shall, unless specified otherv.'ise, come into force un the tirst day of Ju iy, 20:'.0.

 

2.          A mend ment    of    Petroleu m    Prod ucts    (Petroleu m    LeYy) Ord inance, 1961 (XXV of 1961).--ln the Petroleum Products (Petroleu m l.i.:vy) Ordinance. 1961 (> XV of 1961), i n section 3 r\,-

 

(1)         i n sub-section (2), in clause (b), after the figure "2005", tht: expression ,;or general sales tax payable under the Sales l"ax Acl i990" shall be inserted; and

 

(2)        i n sub-section (3), after the expression "(iV ti f 1969),-· the expression "the Sales 1·ax Act, 199()"" shaii be inserted.

 

3.          .4.mcnd ment of Customs Act, 1969 (IV of 1969).-l n t he l'ustorns Act, l 969 (TV of 1969), the following further ainendinents shall be rnade,  urun ly:--

 

( l )             .           .          '
 
111 ,;ct1on .:_ ,-

(a)        for clause (ai), the fol:o\ving shall be subst ituteJ, n<.11ne!y:-·-- "(ai)       "advance ruling" means a \vritten decision by the Board

or any officer or a com1nittee authorized by the Board,

on the request of an applicant tOr delern1ination cf classification. origin or applicability of a  particu lar relief or ex.e1n p!ion on goods prior to th.::ir importation or cxpottation, valid for a specitied  period  of  tin1e;": and

 

(b)      in clau::.e (s).--

 

(i)      after the word '"tOrc ". the expression ·'. or in any way heing concerned in carrying. transport ing, rerrloving, depositi ng, harbouri ng:, keeping, conceali ng" shall be inserted; and

 

(ii) in sub-clause (ii), for the expression ·'one hundred and fift y thousand", the expression "five hundred thousand" shall be substituted;

PART I]            THE GAZETTE OF PAKrs·rAN, EXTRA.,   JlJNE 30, 2020                                                   287

 

(2)         1n  section  7,  after  the  v.·ord ·'Forces'·, the  expression  "  Border Mil itary Pol ice (BMP)" shall he inserted;

 

(3)         in  section  17,  for  the  full  stop  al  the  end,  a  colon  shall  be

:,ubstituted and thereaf ter the fol!owing pro\• iso shall be added, namely:-

 

"Provided that the period of detention shall not exceed fifteen days which 1nay be extended by the Chief Collector or Director C.icncrat for a period not exceeding fifteen days.'';

 

(4)      i n  section  19, in sub-section  (5),  in  the  second proviso,  for the figure '·2020'·, the figure "2021" shall be substituted;";

 

(5)    tOr section 19C, the tOliowing shall be substituted. namely;

 

"'19C. Minimal duties not to be demanded.-Where the value of imported goods does not exceed five th.ousand n1pecs, no duties and taxes shall be demanded, subject to conditions and restrictions as may be prescribed by the Board under the rules.";

 

(6)        in section 21, i n clause (c), for the expression ''customs-dut ies", the

expression "duties as levied under section 18 or 18A.

substituted;

and" shall be

 

(7)        in section 27A, for the full stop at the end, a colon  shall  be substitu ted and thereafter the following proviso shall be added, na1ne\y;-

 

"Provided that the goods imported in new condition shall not be allov-ied scrappi ng and m utilation and shall be classified and chargeable to lcviable duty and taxes as new goods.";

 

(8)        in 'ection 32A,-

 

(a)         in sub-section (1),-

 

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

 

"(ca) declares val ue which is significantly higher  or lower than the actual value, that is, the price actual ly paid or payable for the goods when sold for export to Pakistan, .proceedings may be initiated under this section subject to cond itions or

288           THE  G1\ZET1'E  OF  PAKISTAN,  EXTRA .. JUN E 30,  2020                                                                              ·(PART l

 

limitations a may be prescribed by the Boar{!

under the ru les:"; and

 

(ii)    in  clause  (e),  for the  expression  "(c)"· the  expression

"(c), (ca)" shall be substituted; and

 

(b)        in sub-section (2), for the full stop at the end, a colon shall be subst ituted and thereafter the following proviso shall be added,  nrunely:-

 

"Provided t hat an  offence,  h2 \ 1ng  no revenue

implication but covered under :>ub-sect io:1 i I }. shall also be

.served \Vith sho\v C.'llle notice \vithin a per1<:1d of one hundred and eighty days of detection of such fra 1« fc11· pen::! a ction under the relevant provi ions of !a,v.'';

 

(9)        in section 80, i n sub-section (3), for the full ;;to;i a t t h<' end. n colon shall be substituted and thereafter the rollo\'v l ''g proviso shall be added,    na1nely:-

 

"Provided that in case of reassesstnent. a notice <;hall  be served to the importer through (ustoms Computer ized Systcrn and opportunity of hearing shall be provided,   if be so desires.";

 

( l O)    in section   139,-

 

(a)        for sub-section ('.'.:), the following shall be substituted, nmne!y:-

 

"'(2) \Vhcre any passenger or a member of the cre\V makes a false declaration or fails to make such declaration as required under sub-section (1 ), he shall be gu ilty of an offence under this Act."; and

 

(b)        after sub-section (2), substituted as aforesaid,  the following ne\v sub-section shall be added, namely:-

 

"(3)  Notwith tan<ling   the   provisions   of   sub-section   (2), where any person attempts to bri ng into or takes out of Pakistan, currency, gold, precious metals  or  stones,  i n any fom1, th rough concealment i n baggage or circumventi ng  customs   controls   at  airports,   ca·ports and land border custom·stations, he shall be guilty of an offence of smuggli ng within the  n1eaning  of clause (s) of section  2.";

PART lj            TI-IE GAZETTE OF P.L\KISTAN, EXTRA.,  J UN E 30, 2020                                  289

 

(11)        in section 156, in sub-section (1), in the Table, in coluntn zero, against serial n umber 8,-

 

(a)        for sub-serial (i) and entries relating thereto in columns ( \ ),

(2) and (3), the foHowing shall be substituted, namely:-

 

'\i)  where   ony   goods   bo                                such goods sha ll be liable                                 General"; smuggled into or out of            to  confiscation  and  any

Pakistan,-                             person  concerned  in  the offence shall be l iable to-

I
 
(•)  if the value  of  a  penalty  not  exceeding the goods isfrom PKR the value of the goods, 500,001   to   3,000,000    and upon conviction by a

(both inclusive);                  Special Judge ho shall further bo liable to imprisonment for a term not exceedin!! h\'o vears;

(b)               

I
 
if the value  of                     a  penalty  not  exceeding the goods is from PKR              t\vo  times  the  value  of 3,000,001  to  5,000,000             the    goods:      and    upon (both inclusive);                conviction  by  a  Special Judge he shall further be

liable to imprisonment for a term not exceeding three years:

Provided  that the sentence of the imprison ment shall  not be less than two years.

(c)                 if the value  of   a  penalty  not  exceedin g the goods is from PKR              three  times  the  value  of 5,000,001  to  7,500,000              the     goods;     and         upon (both inclusi ve);                conviction  by  a  Special Judge b.e shall further be

liable to imprionrnent for a tenn not exceed ing five years:

 

Provided  that tho sentence of the imprisonment shall  oot be less than two and half vears.

(d)                if the value of          a  penalty  not  exceeding

the goods is from PKR    four  times  the  value  of                                   I

7,500,001                     to    tho          goods;              ond    upon

I
 
I 0,000.000             (both             conviction  by  a  Special

inclusive):                            J udge he shall further be liable   to   imnrisonment

290         1'HE  GAZEcr rE  OF  PAKISTAN,   EXTRA.,  JUNE 30,  2020            [PART l

for a term not exceeding  I

ten years:

Provided       that·1 the sentence of            the imprisonment    shall   not be less than three years.

(c)           if the value of the goods exceeds PKR 10,000,000;

a penalty not exceeding five times the val ue of the goods; and upon conviction by a Special Judge  he shall further be l iable to  imprisonment for a term not  exceed ing fourteen years:

Provided       that

the     sentence     of     the  i

imprisonment  shall  not be Jess than five years and the whole or any part of his moveable and immoveable    assets   and

property   shall   also   be  I

l iable   to    forfeiture    in

accordance with section 187 of the Customs Act, 1969:

 

 

 

 

 

'-'-

Provided further that, in  the case of such goods as may be notified by   the                Federal Government in  the official Gazette. the sentence                                            of

I
 
imprisonmet   shall   not be less than five years and the whole or any part of his property  shall also

be liable =to f=o=rfe=ill=ire=.                                      '

(b)    for sub-serial (iii) and entries relating theret o in columns  (1).

(2) and (3), the follo\ving shall be subst ituted, na tnel y:-

 

'(iii)   lf        the     smuggled    omuch   currency   or

goods

prohibited                                 goods              shall                be              liabl e         to

comprise                         cwrency,                confiscation                        anJ         any

gold, silver, platinu1n or    person   concerned

in  the

'
 
precious  stones  in  any                             offence shall be l iable to-

fonn-

(e)                    if the  value  of                    n   penalty    not    'xcceding the currencv or goods is        the value of the <>o<?<ls; and

n
 
PAR T I]          THE GAZETTE OF PAKfSTAN, EXTRA.,   J UNE 30,  2020                                                                                  291

upto  US  s 10,000  Qt  I upon          conviot;on    by

equivalent                   in     value I Special   Judge   he   shall I

1

I
 
(currency      of      other    further     be      l iable     to denonrination) etc;                      imprisonment   for  a  term '

not exceeding two vears;

I
 
(b)     if the value of    a   penalty   not  exceeding the currency or goods is I two rimes the value of the from  US  $  10,001  to    goods;          and         upon

'             u s  s  20,000                   (both             conviction   by  a   Special

I       inclusive) or equivalent    Judge  he  shall  fu rther· be

in  value  (cLirrency  of

liable to imprisonn1ent for I

other       denomination)    a term not exceeding three

etc;                                        years:

Provided  that  the

I
 
sentence                          of                    the imprisonment shall not be less than two Years.

(o)           If value of the    a  pena lty   not   exceeding currency   Ot goods   i'   three times the value of the 1

from  US  $ 20,001  to      goods;                       and                   upon 1·

us      $     50,000             (both            conviction   by   a   Special

inclusive) or equivalent    Judge  he  shall  further  be

in  value   (currency   of                liable to imprisonment for 1

other        denoinination)                     a term  not  exceeding five

etc;                                        years:

Provided  that  the

'
 
sentence           of           the imprisonment shall not be

I less  than   two   and   half

vears.

(d)         if the value of    a   penalty   not   exceeding  i

I
 
the currency or goods is four times the value of the from  US  $  50,001  to    goods;         ood                                                                                                                                upon

'
 
LIS   s  100,000   (both    conviction   by       'Special

inclusive) or equi valent    Judge  he  sha ll  further  be

in value (currency of liable to imprisonment  for other    denomination)     a tenn  not  exceeding  kn etc: years:

Provided  that  the                                I

"''          I
 
I sentence                            of imprisonment sha ll not be

I
 
less than three vear .                                '

'

'             (e)           if the value of

' penalty  not exceeding

I       the  currency  or  goods I five titnes the value of the

I
 

'
 
exceeds  US S 100,000 Igoods;          and          upon or  equivalent  in  value                                              conviction   by  a   Special

L
 
(currency      of      other    Judge  he  shall  further  be

denomination) etc;              liable to ilnprisonment for

'
 
term    not           exceeding fourteen vears:

292                      1llli CiAZEl'TE  OF PAKf STAN, EXTRA .. JUNE 30, 2020              [P_r\RT I

 

 Text Box: i Provided that the 1 sentence of the imprisonment shall not be less than five years and the whole or any part of his I moveable and immoveable assets and property shall also be liable to forfi!iture in accordance \Vith section 187 of the Custon1s Act, 1969.

 

(c)    sub-serial (iv) and entr ies relating thereto in colu1nns (1), (2) and (3), sha ll be omitted:

 

(12)        in section 179, in sub-section (3),-

 

(a)         after the colon, the follo,ving new  proviso  shall be inserted,

namely:-

 

"Provided that in cases, wherein the prov1s1ons of clause (s) of section 2 have been invoked, such cases shall be decided within a period of thirty _days of the issuance of show cause notice:"; and

 

(h)    in the existi ng proviso, after the word "Provided'', the word "further" shal Ibe inserted;

 

(13)        in section 187, for the full stop at the end,  a colon shall  be subst ituted and thereafter the following provisos :;.hall be added, namely:-

 

"Provided that any person, alleged to have committed an offence under this Act, shall bear the burden of proof that any property O\Vned by h im in his name or someone else name \\-·as not acqu ired from the proceeds of such criine:

 

Provided further that the procedure for tOrfeiture of such property shall be prescribed by the Board under the rules.";

 

(14j in section 194B, i n sub-section (1), after the first proviso, the following new proviso shall he inserted, namelv:-

 

"Provided further that in cases, \Vherein the provisions of clause (s) of section 2 have been invoked, .iippea[s shall be decided v..ith in a period of thirty days:";

PART lJ            ·rHE GAZl1..f E (1F PAK IST AN, EXTR.t\.,   JUNE 30, 2020                                                                                  293

 

(15)        in section l95C,

 

(a)        in sub-section  (2),  for  clause  (c),  the  following  shall  be

substituted, namely:-

 

"(c) a person to be nomi nated by the Board from a panel mentioned in clause  (b);";

 

(b)        for sub-section (3), the foliowing shall be substituted, namely:

 

"(3) The Board shall com municate the order of appointment of committee to the court of law or the appellate authority and the Collector.";

 

(c)        sub-section (4) shall be omitted;

 

(d)        in sub-section (5), for the colon at the end, a full stop shall be substituted and the proviso thereafter shall be omitted;

 

(e) in sub-section (6), for the expression "on withdrawal  of appeal upto the date of decision by the committee", the expression "from the date of appointment of the committee up to the date of decision of committee or its dissolution, as the case may be" shall be substituted;

 

(f) for sub-section (7), the following shall be subst ituted, namely:---

 

"(7) The decision of  the com mittee  under  sub-section  (5) sha ll be binding on the Collector when the aggrieved person, being satisfied with the decision, has withdrawn the appeal pending before the court of law or any appellate authority and has com municated the order of

\Vithdrawal to the Collector:

 

Provided that if the order of withdrawal is O<lt commun icated to the Collector within sixty days of the service of decision of the com mittee upon the aggrieved person. the decision of the committee shall not be binding on the Collector:'; and

 

(g) in sub-section (8), for the expression ·'which issued the order of withdrawal under sub-section (4) and the appeal shall be treated to be pending before such appellate authority as if the

294            Tf -I E  GAZEITE  OF  PAK IS'f Af\.  EXTRA.,  J UNE 30,  2020                                                                                [PAR1 I

 

appeal had never been \V ithd rawn., the expression "where the dispute is pend ing" shall be substituted;

 

(16)        in section 201 , in sub-section (3), for the full >.top at the end, a colon shall be substituted and thereafter the follo\vi ng pro"iso shall be  added,  namely:-

 

"Provided that, i n case wherein goods declaration ha..;; been filed, the share of importer in sale proceeds shall not exceed the declared  value of the  goods.";

 

( 17)     in  section  2 J 2A.  after  sub-section  (2),  the  following  sub-section

shall be added, namely:-

 

"(3) Non.vithstanding anything contai ned in this Act or any othe1 la\\' for lhe time being in force, the Board may, subject tc such conditions, l imitations or restrict ions as it thinks fit tc impose, grant benefits to the authorized economic operators in such manner as may be provided under the rules made. including-

 

(a)        laying down any procedure or ntode for collection of customs duties, fee, surcharge, penalty or any other levy under this Act or any other law;

 

(b)        deferring collection of customs duties, fee. surcharge, penalty or any other levy either in whole or in part;

 

(c)        condoning or substituting whole or part of the bank guarantee or pay order of a scheduled bank required under this Act with any other financial instrument a:i deemed appropriate."; and

 

( 18) after section 2 I 2A, the followi ng new section shall be inserted. namely:-

 

'·2 J 28.     Advance   Ruling.-( l )  An   applicant   desirous   of   Advanc( Ru ling may make an application in such form and in such cnanner as may be prescribed  under  the  ru les, stating any or the questions as contained i n sub-sect ion (2) hereinafter  on which the Advance Ru l ing is sought.

 

(2)        The question  on which advance ruling is sought shall be in

respect of,·-

PART I]            Tl-IE GAZETTE OF PAKISTAN, EXTRA.,   JUNE 30. 2020                                  295

 

(i)        classification of goods u nder the First Schedule to this Act;

 

(ii)        determination of origin of th'e goods under the ruieS of origin notified for bilateral and multilateral agreen1cnts;

 

(iii)        applicability of notificat ions issued i n respect of duties und er this ,.\ct or any tax or duty chargeable under any other law for the time being in force in the same manner as duty of custo1ns leviable u nder this Act; or

 

(iv)        any  other   matter   as  the   Board   may   specify   by

notification in the official Gazette.

 

(3)        The proceedings for issuance of advance ru ling shall be completed within ninety days.

 

(4)        The Ru ling issued under sub-section (1) shall be binding on the applicant.

 

(5)        The Ruling issued under subsection (1) shall be binding on the Customs for a period of one year unless there is a change in lav..' or facts or circumstances on the basis of \Vhich the advance rul ing \vas pronounced.

 

(6)        The appeal against the Ruling issued under sub-section ( l ) shall lie \Vith the Member Custo1ns (Policy) v.·ithin thirty days of issuance of the Ru l ing:

 

Provided that during the appeal period of thirty days, the operation of the Ru ling shall remain suspended unless the applicant accepts the Ru l i ng.'';

 

( 19)   in the First Schedule,-

 

("'\, in Chapter 99, i n Sub-Chapter-V, in column (1) aga inst PCT code 991 7,  in  colu mn  (2),  in  paragraph  (3), lhc  followi ng

amend ments shali be r11ade and shall be deemed to have been made \vith effect fro1n the 1st June, 2020, nameiy:--

 

(a)         in sub-paragraph (i), for the \vord "and", occurri ng for third time, the expression ", including Gwadar International Terminals Limited and Gwadar Marine Services Limited and their", shall be substituted;

296           Tl{E GAZt t "l'l: OF  PA K IS"l"AN,  EXTRA.,  J UNE 30, 2020                                                                                 LPART I

 

(b)         i n sub-paragraph (ii), for the words, "the ships used i n the port and its terminals'', the word:> ·'al l visiting ships includ ing foreign and local and fish ing vessels at Gwadar Port", shal l be substituted; and

 

(c)        for sub-paragraph (iv), the following sha ll  be substituted,    namely:-

 

"(iv) Imports by the follo'\\'ing businesses to  be established in the Gwadar Free Zone Area for a period of 23 years with effect from 1st July, 2016, packaging, d istribution, stuffing and de-stuffing, CFS, container yard, warehousing includ ing cool and cold rooms, transhi pment, label l ing, l ight end assembly and  re-assembly,  i1n ports  and exports/va lue added exports, value adding of imports, other similar or related businesses activities and such commercial activities as are required to support the free zone."; and

 

(ii)  the amendments set out in the First Schedule to this Act sha ll be tnade in the First Schedule to the Customs Act, 1969 (IV of 1969); and

 

(20)        in the  Fifth  Schedule,-

 

(A)        in Part-I,-

 

(i)        i n the prea1nble, in the explanation, -for sub-para (b), the following  shall be  substituted,  namely:-

 

"(b)    use    in   min i ng,   agriculture,    fisheries,   animal

husbandry, floriculture, hortic ulture, livestock, cool   chain,  dairy,  poultry " industry,   rr sector,

storage,    comn1unication and    infrastructure development of SEZs by Zone Developer."; and

 

(ii)    i n the ·rable, in column (1),-

 

(a)        for S.No.23 and the entries relating ' thereto i n columns (2), (3), (4) arid (5), the following shall be subst ituted,  namely:-

PART I]            THE GAZETTE OF P.J\KISTAN, EXTRA.,  J ll1'\E 30, 2020                                297