Welcome To Federal Budget 2004-2005

Central Excise

Clause –2(1)	Seeks to amend section 2 in order to include the definition of “Cable TV”.
Clause -2(2)	Seeks to amend section 3 in order to extend the scope of collection of central excise duty on goods in GST.
Clause -2(3)	Seeks to substitute second proviso to sub-section (2) of section 4.
Clause -2(4)	Seeks to insert new section 36D for alternate dispute resolution.
Clause -2(5)	Seeks to amend First Schedule in order to include Cable TV in First Schedule.

Customs

Clause – 3(1)	Seeks to amend section 6 of the Customs Act, 1969 (IV of 1969).
Clause – 3(2)	Seeks to substitute section 15 of the Customs Act, 1969 (IV of 1969).
Clause – 3(3)	Seeks to amend section 25A of the Customs Act, 1969 (IV of 1969).
Clause – 3(4)	Seeks to omit section 25B of the Customs Act, 1969 (IV of 1969).
Clause – 3(5)	Seeks to amend section 30 of the Customs Act, 1969 (IV of 1969).
Clause – 3(6)	Seeks to insert section 32A of the Customs Act, 1969 (IV of 1969).
Clause – 3(7)	Seeks to amend section 35 of the Customs Act, 1969 (IV of 1969).
Clause – 3(8)	Seeks to amend section 79 of the Customs Act, 1969 (IV of 1969).
Clause – 3(9)	Seeks to amend section 80 of the Customs Act, 1969 (IV of 1969).
Clause – 3(10)	Seeks to amend section 98 of the Customs Act, 1969 (IV of 1969).
Clause – 3(11)	Seeks to amend section 131 of the Customs Act, 1969 (IV of 1969).
Clause – 3(12)	Seeks to amend section 131A of the Customs Act, 1969 (IV of 1969).
Clause – 3(13)	Seeks to amend section 139 of the Customs Act, 1969 (IV of 1969).
Clause – 3(14)	Seeks to amend in clause 14 of section 156 of the Customs Act, 1969 (IV of 1969).
Clause – 3(15)	Seeks to amend in clause 92 of section 156 of the Customs Act, 1969 (IV of 1969).
Clause – 3(16)	Seeks to amend section 166 of the Customs Act, 1969 (IV of 1969).
Clause – 3(17)	Seeks to amend section 168 of the Customs Act, 1969 (IV of 1969).
Clause – 3(18)	Seeks to amend section 186 of the Customs Act, 1969 (IV of 1969).
Clause – 3(19)	Seeks to amend section 188 of the Customs Act, 1969 (IV of 1969).
Clause – 3(20)	Seeks to insert section 195-C of the Customs Act, 1969 (IV of 1969).
Clause – 3(21)	Seeks to amend section 196 of the Customs Act, 1969 (IV of 1969).
Clause – 3(22)	Seeks to amend section 199 of the Customs Act, 1969 (IV of 1969).
Clause – 3(23)	Seeks to amend First Schedule to the Customs Act, 1969 (IV of 1969).

Capital Value Tax

Clause – 4

(a) Seeks to charge Capital Value Tax on purchase of modarba certificates, any instrument of redeemable capital as defined in companies ordinance, 1984, shares of public company listed on stock exchange by a resident person.

(b) Seeks to charge CVT @ 0.1% of the purchase value of modarba certificates, any instrument of redeemable capital as defined in companies ordinance, 1984, shares of public company listed on stock exchange.

(c) Seeks to make responsible the member of stock exchange to collect CVT on purchase of modarba certificates, any instrument of redeemable capital as defined in companies ordinance, 1984, shares of public company listed on stock exchange by a resident person.

(d) Seeks to omit the provision relating to adjustment of CVT against Wealth Tax liability.

Sales Tax

Clause – 5(1)(a)	Seeks to omit reference to further tax.
Clause – 5(1)(b)	Seeks to insert definition of the term banking company.
Clause – 5(1)(c)	Seeks to delete redundant provision of law.
Clause – 5(1)(d)	Seeks to omit reference to turnover tax return.
Clause – 5(1)(e)	Seeks to omit reference to enrolled person and enrollment number.
Clause – 5(1)(f)	Seeks to provide for claiming input tax credit in respect of goods chargeable to Central Excise Duty in VAT Mode.
Clause – 5(1)(g)	Seeks to amend definition of output tax.
Clause – 5(1)(h)	Seeks to omit reference to further tax.
Clause – 5(1)(i)(i)	Seeks to make changes to allow for amendment in the subsequent sub-section.
Clause – 5(1)(i)(ii)	Seeks to make changes to allow for amendment in the subsequent sub-section.
Clause – 5(1)(i)(iii)	Seeks to provide for exclusion of certain transactions from the definition of the term supply.
Clause – 5(1)(j)	Seeks to omit reference to turnover tax.
Clause – 5(1)(k)	Seeks to amend the definition of tax fraud.
Clause – 5(1)(l)	Seeks to omit reference to a redundant provision of law.
Clause – 5(1)(m)	Seeks to omit an existing provision on turnover tax.
Clause – 5(1)(n)	Seeks to substitute reference to the repealed Income Tax Ordinance 1979, by the new Income Tax ordinance 2001.
Clause – 5(2)(a)	Seeks to omit reference to further tax.
Clause – 5(2)(b)	Seeks to omit reference to further tax.
Clause – 5(3)	Seeks to omit reference to turnover tax.
Clause – 5(4)	Seeks to omit reference to a redundant provision of law.
Clause – 5(5)	Seeks to provide for zero-rating of sales tax on both import and supply.
Clause – 5(6)(a)(i)	Seeks to provide for input tax adjustment on accrual basis.
Clause – 5(6)(a)(ii)	Seeks to omit reference to further tax.
Clause – 5(6)(b)	Seeks to clarify that input tax adjustment, in respect of goods purchased in auction would be subject to the condition that the treasury challan is in the name of registered person duly showing his sales tax registration.
Clause – 5(7)	Seeks to insert new provision to provide for waiver from audit if tax is paid on basis of prescribed value addition.
Clause – 5(8)(a)(i)	Seeks to make an editorial correction.
Clause – 5(8)(a)(ii)(a)	Seeks to make an editorial correction.
Clause – 5(8)(a)(ii)(b)	Seeks to omit reference to further tax.
Clause – 5(8)(a)(ii) (c)	Seeks to make an editorial correction.
Clause – 5(8)(b)	Seeks to disallow input tax credit on account of fake invoices and purchases where requisite information has not been furnished to the Board in terms of sub-section (5) of section 26.
Clause – 5(8)(c)	Seeks to omit reference to turnover tax.
Clause – 5(8)(d)	Seeks to omit reference to turnover tax.
Clause – 5(8)(e)	Seeks to omit reference to turnover tax.
Clause – 5(9)	Seeks to insert enabling provision for change in period of carry forward amount.
Clause – 5(10)	Seeks to make provision for allowing exemption through special order.
Clause – 5(11)	Seeks to substitute an existing provision.
Clause – 5(12)	Seeks to omit certain existing sections of the Act.
Clause – 5(13)	Seeks to substitute an existing provision.
Clause – 5(14)	Seeks to provide for maintenance of certain records.
Clause – 5(15)(a)	Seeks to omit reference to further tax.
Clause – 5(15)(b)	Seeks to omit reference to turnover tax.
Clause – 5(16)(a)	Seeks to omit reference to further tax.
Clause – 5(16)(b)	Seeks to insert provision to require registered persons dealing in specified goods to provide information in prescribed manner.
Clause – 5(17)	Seeks to omit reference to turnover tax return.
Clause – 5(18)	Seeks to omit reference to further tax.
Clause – 5(19)	Seeks to omit reference to turnover tax.
Clause – 5(20)	Seeks to omit reference to turnover tax.
Clause – 5(21)(a)(i)	Seeks to make an editorial correction.
Clause – 5(21)(a)(ii)	Seeks to rationalize pitch of penalty.
Clause – 5(21)(b)(i)(a)	Seeks to omit reference to turnover tax.
Clause – 5(21)(b)(i)(b)	Seeks to harmonize entry with an earlier occurring provision of the Act.
Clause – 5(21)(b)(ii)	Seeks to insert a new provision for imposition of penalty on such registered persons who fail to furnish information under sub-section (5) of section 26.
Clause – 5(21)(c)	Seeks to enhance the penalty for tax fraud.
Clause – 5(21)(d)	Seeks to omit reference to turnover tax.
Clause – 5(22)	Seeks to omit reference to turnover tax.
Clause – 5(23)	Seeks to rationalize the provision with an earlier occurring provision of law.
Clause – 5(24)	Seeks to provide for banking companies to supply information in cases of tax fraud.
Clause – 5(25)	Seeks to provide for search under warrant.
Clause – 5(26)(a)	Seeks to provide for adjudication of cases not mentioned in the text of the relevant section.
Clause – 5(26)(b)	Seeks to omit reference to further tax.
Clause – 5(27)	Seeks to provide for legal coverage for filing of appeals in case of refund.
Clause – 5(28)(a)	Seeks to correct an anomaly due to incorrect placement of an existing provision of law.
Clause – 5(28)(b)	Seeks to correct an anomaly due to incorrect placement of an existing provision of law.
Clause – 5(29)	Seeks to substitute an existing provision of law.
Clause – 5(30)	Seeks to insert provision, prescribing the responsibility of Liquidators.
Clause – 5(31)	Seeks to amend an existing provision to protect officers of sales tax for actions carried out in accordance with the provision of law.
Clause – 5(32)	Seeks to insert new provision for providing assistance to the Sales Tax Officer by officers of Civil Armed Forces.
Clause – 5(33)(i)	Seeks to omit reference to turnover tax.
Clause – 5(33)(ii)	Seeks to rationalize the provision with an earlier occurring provision of law.
Clause – 5(34)	Seeks to rationalize rate for delayed payment of refunds by the department.
Clause – 5(35)	Seeks to substitute an existing provision of law.
Clause – 5(36)	Seeks to provide for enabling the Board to delegate powers of condonation subject to conditions.
Clause – 5(37)	Seeks to insert new entry in the Fifth Schedule defining the sales tax fiscal package for Gawadar Special Economic Zone.
Clause – 5(38)(i)	Seeks to omit entry to allow for levy of sales tax on supply of cottonseed used for manufacture of oil.
Clause – 5(38)(ii)	Seeks to amend an existing entry in the Sixth Schedule to allow for the levy of sales tax on supply of Crude Vegetable Oil obtained from cottonseed.
Clause – 5(38)(iii)	Seeks to insert a new entry for exempting from sales tax, import/supply of Edible Oils and Vegetable Ghee/Cooking Oil.
Clause – 5(38)(iv) (a)	Seeks to raise exemption threshold in respect of manufacturers.
Clause – 5(38)(iv) (b)	Seeks to raise exemption threshold in respect of retailers.
Clause – 5(38)(v)	Seeks to correct an editorial mistake.
Clause – 5(38)(vi)	Seeks to amend an existing entry to provide similar treatment, vis-à-vis local supply, on imported tractors, bulldozers and combined harvesters.

Income Tax

Clause – 6(1)	(a) (i) Seeks to allow amalgamation of insurance companies. (ii) Seeks to extend the date for amalgamation of one or more banking or non-banking financial institutions approved on or before June 30, 2006. (b) Seeks to define “non-banking finance company”. (c) Seeks to replace Venture Capital Company and Venture Capital Fund rules 2001 by Non-Banking Finance Company (Establishment and Regulation) Rules, 2003.
Clause – 6(2)	Seeks to replace the words “to the extent to which the expenditure is incurred in deriving income from business chargeable to tax” by the words “wholly and exclusively for the purposes of business”.
Clause – 6(3)	(a) Seeks to enhance the limit for payment of salary through cheque from Rs.5000 to Rs.10,000. (b) Seeks to enhance the limit of payment of an expense under single account head through cheque from Rs.5000 to Rs.10,000.
Clause – 6(4)	(a) Seeks to allow depreciation on full year basis instead of allowing the same on actual use of an asset. (b) (i) Seeks to correct editorial mistake. (ii) Seeks to correct editorial mistake.
Clause – 6(5)	Seeks to allow initial allowance for an asset used first time for the purposes of business in a tax year or the year in which commercial production is commenced.
Clause – 6(6)	(a) Seeks to allow interest on borrowed capital used for the purposes of business. (b) Seeks to allow the lease rentals paid on leased assets used for business purposes against business income. (c) Seeks to allow any amount paid to a modaraba or a participation fund certificate holder for funds borrowed for business purposes against income from business.
Clause – 6(7)	(a) Seeks to allow creation of reserve for non-performing consumer loan by non-banking finance company and House Building Finance Corporation. (b) Seeks to provide the definition of consumer loan.
Clause – 6(8)	(a) Seeks to correct editorial mistake. (b) Seeks to omit the definition of “economic performance”
Clause – 6(9)	Seeks to protect the provisions contained in other statutes regarding reduction in the rate of tax, a reduction in tax liability of any person or exemption from the operation of any provision of Income Tax Ordinance.
Clause – 6(10)	Seeks to introduce the concept of “group relief” for setting off of loss of a subsidiary company against income of a holding company provided the later owns or acquire 75% share capital of the former for five years and the subsidiary company continues the same business for five years.
Clause – 6(11)	Seeks to allow Workers’ Participation Fund as deduction against company’s income.
Clause – 6(12)	Seeks to extend the facility of tax credit on “profit on debt” paid on a house loan from employer by the employees of statutory bodies or listed public companies.
Clause – 6(13)	Seeks to authorize the Central Board of Revenue to change special tax year into normal tax year by a notification in official Gazette in the case of a class of person and vice-versa.
Clause – 6(14)	(a) Seeks to correct editorial mistake. (b) Seeks to restrict the provision of section 111 to treat unexplained amount as income not beyond five preceding tax years or assessment years.
Clause – 6(15)	Seeks to allow carry forward of unadjusted amount of minimum tax paid on turnover for a tax year for subsequent five tax years for adjustment against future tax liability.
Clause – 6(16)	Seeks to provide an option to individuals and association of persons engaged in trading and having turnover upto rupees five million to pay presumptive tax equal to three quarters of one percent of their turnover as final discharge of tax liability in lieu of normal taxation.
Clause – 6(17)	Seeks to correct an editorial mistake.
Clause – 6(18)	(a) Seeks to omit the provisions regarding filing of wealth statement by salaried taxpayers having income of Rs.200,000. (b) Seeks to provide filing of statement instead of return by individuals, AOPs, being retailers, opting for presumptive tax.
Clause – 6(19)	Seeks to make it mandatory for individuals to file wealth statement whose declared or assessed income is rupees five hundred thousand or more.
Clause – 6(20)	Seeks to correct editorial mistake.
Clause – 6(21)	(a) Seeks to provide right of appeal to persons from whom tax was not collected or deducted and order for recovery is passed by the Commissioner. (b) Seeks to remove the condition of mandatory payment of 15% of disputed tax or 20% of tax assessed for immediate proceeding tax year for filing of appeal to Commissioner (Appeals).
Clause – 6(22)	Seeks to provide alternate dispute resolution mechanism for quick settlement of tax issues.
Clause – 6(23)	Seeks to provide due date for payment of minimum tax on turnover @ 0.75% by individuals and association of persons opting for presumptive taxation against normal taxation.
Clause – 6(24)	(a) Seeks to provide for payment of advance tax by a company on the basis of tax assessed for latest tax year instead of tax turnover ratio basis. (b) Seeks to provide for dates of payment of quarterly installment of advance tax on 15^th day of September, 15^th day of December, 15^th day of March and 15^th day of June. (c) Seeks to extend the facility of payment of advance tax on own estimate basis.
Clause – 6(25)	(a) Seeks to correct an editorial mistake. (b) Seeks to provide the definition of “industrial undertaking”. 1. (c) Seeks to treat the tax withheld on import of edible oil as final discharge of tax liability. 2.
Clause – 6(26)	(a) Seeks to provide thirty days limitation for passing an order by the Commissioner on receipt of notice regarding payment to a non-resident without deduction of tax. (b) Seeks to correct an editorial mistake.
Clause – 6(27)	(a) Seeks to correct an editorial mistake. (b) Seeks to withhold tax on payments made to TV Satellite Channels on account of advertisement charges, as final discharge of tax liability.
Clause – 6(28)	Seeks to raise the limit of rent from property from two hundred thousand rupees to three hundred thousand rupees for withholding income tax purposes.
Clause – 6(29)	Seeks to provide for withholding tax on commission income from sale of petroleum products by petrol pump operators as final discharge of tax liability.
Clause – 6(30)	Seeks to correct an editorial mistake.
Clause – 6(31)	Seeks to correct an editorial mistake.
Clause – 6(32)	(a) Seeks to treat tax withheld on any commission income including commission income of petrol pump operators as final discharge of tax liability. (b) Seeks to delete the provisions regarding taxation of excess profits shown in books of accounts by taxpayers paying tax under presumptive tax regime.
Clause – 6(33)	Seeks to reduce the rate of compensation on delayed payment of refunds from 15% to 6%.
Clause – 6(34)	Seeks to substitute section 177 in order to authorize CBR to lay down criteria for selection of audit by the Commissioner.
Clause – 6(35)	(a) Seeks to reduce the rate of additional tax for delayed payment of tax from 18% to 12%. b) Seeks to provide charge of additional tax at rate of 12% where estimates are filed and the advance tax paid falls short of 80% of actual tax liability finally determined on assessment.
Clause – 6(36)	Seeks to restrict delegation of powers to Additional Commissioner only for amendment of assessment under section 122 (5A) where assessment order erroneous in so far as it is prejudicial to the interest of revenue.
Clause – 6(37)	Seeks to provide for rate of withholding tax at 10% on commission income of travel agents and insurance agents, as final discharge of their tax liability. It also seeks to treat the withholding tax deducted at the rate of 5% on commission income in the case indenting commission agent, yarn dealers, and advertising agents as final discharge of tax liability.
Clause – 6(38)	(a) Seeks to raise the basic threshold for charge of income tax from Rs.80,000 to Rs.100,000. b) Seeks to provide for rate of tax at 0.75% for individuals and AOPs, being retailers. 3. (c) (i) Seeks to provide for withholding tax rate at 5% on advertisement services rendered by non-residents. (ii) Seeks to raise the rate of withholding tax on winnings (other than prize on prize bonds) from 10% to 20% (iii) Seeks to provide for the rate of withholding tax at 10% of commission income of a petrol pump operator. (d) (i) Seeks to provide for withholding tax rate on commission income of indenting commission agents, advertising agents and yarn agents at 5%. (ii) Seeks to provide for withholding tax rate on commission income of insurance agents and travel agents at 10%.