ISLAMABAD: The government on Monday got approval of National Assembly on Finance Bill 2020 and incorporated Electric Vehicle Policy 2020 and granted income tax exemptions to Sindh Institute of Urology and Transplantation (SIUT), Shaukat Khanum Memorial Trust and National Endowment Scholarship for Talent (NEST).
The income tax exemption has also been granted to Alamgir Welfare Trust and Foundation University. The government has deleted 25 percent FED on caffeinated energy drinks and reduced FED rate on cement.
According to passed Finance Bill 2020 by National Assembly here on Monday, the government included Electric Auto Rickshaw, 3-wheeler electric loader and electric motor cycle where the duty under Customs Act would be charged by 50 percent. This incentive will be applicable for five years starting from July 1, 2020. The Engineering Development Board (EDB) would scrutinize this scheme. There will be one percent duty on Electric buses, electric trucks and electric movers.
For small trailers assembling, on the 280 HP kit there will be 20 percent duty. The machinery and design plant for manufacturing of electric vehicles, there will be zero duty.
Federal Minister for Industries Hammad Azhar on Monday tweeted and stated that some amendments were tabled and passed along with Finance Bill on Monday. Some of its highlights included minimum tax waived for hospitality sector for 6 months (April till Sept), 0 percent minimum tax for Haj operators, further Federal Excise Duty (FED) reduced(total 50 paisa/kg) on cement.
The reversal of FED increase on caffeinated drinks and the government approved Electric Vehicle policy (2-3 wheelers, buses, trucks) incentives, mobile manufacturing incentives, exemption of GST from cotton seed cake, services for asset management telecom tower & data management at concessional 3% tax, he added.
The surplus funds of the Non Profit Organizations (NPOs) which are not spent during the year for welfare are taxed at the rate of 10% with certain exclusions. One such exclusion is funds which could not be spent due to any obligation or restriction placed upon the NPO by the donor. However, where the donor is an associate of the NPO, such a restriction can be a mechanism to shift profit to the NPO. Therefore, an amendment was proposed so that the above exclusion does not apply in case where the donor is an associate of the NPO.
Currently, engineering services have been included in specified services on which reduced withholding tax of 3 percent is applicable. The Bill proposed to exclude such services from the list of specified services.
The Act has now re-included ‘engineering services’ in the specified list along with other services of warehousing services, services rendered by asset management companies, data services provided.
The bill had proposed new entry “6a. Caffeinated energy drinks PCT code 2202.1010 2202.9900 25 percent of Retail Price”. Now Act has deleted this entry. Before bill, FED was levied on cigars, cheroots, cigarillos and imported cigarettes at 65 percent of ‘retail price’. Through bill the duty was increased to 100%. Now Act, the duty imported cigarettes of tobacco or tobacco substitutes [entry 8] is 65 percent of retail price. For Cigars, cheroots and cigarillos of tobacco and tobacco substitute the rate of duty will be 65 percent of retail price or Rs10,000/kg whichever is higher.
As per Bill duty on cement was proposed to be reduced by 12.5 percent from Rs2 to Rs1.75 per kilogram implying a decrease of Rs12.5 per standard bag of 50 kilogram. Now Act has further reduced duty from Rs1.75 to 1.50.
As per bill a new entry 55d was added whereby locally manufactured double cabin (4x4) pick-up vehicles except the vehicles were subject duty 7.5 percent ad valorem. Now Act has restricted this to vehicles booked on or before June 30, 2020 subject to the restriction or conditions specified by the FBR.
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