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020629
GOVERNMENT
OF PAKISTAN REVENUE DIVISION CENTRAL BOARD OF REVENUE
C.No.1(38)WHT/91
Islamabad, 29th June, 2002.
CIRCULAR NO. 9 OF 2002
(Income Tax)
Subject:
Issuance of Exemption Certificate under Section 148 of the Income Tax Ordinance, 2001 [Section 50(5) of the Income Tax Ordinance, 1979].
The Income Tax Ordinance, 2001,
as amended through Finance Ordinance 2002, will come into force w.e.f. 1st July, 2002. The
withholding provisions of the new Ordinance will also become operative on the aforesaid
date. Resultantly, tax shall be withheld by the withholding authorities under the
provisions of the new Ordinance.
2. The repealed Income Tax Ordinance, 1979 contained provisions regarding powers of
the Departmental officers for issuance of exemption certificates to various categories /
classes of persons. Detailed instructions in this regard were notified through SRO
593(I)/91, dated 30.6.1991. This SRO will remain valid after enforcement of the new
Ordinance from 1st July, 2002, in view of provisions of section 239(10) of the
Income Tax Ordinance, 2001.
3. In the past, the Board’s policy of exemption certificates was at times subjected
to criticism by concerned quarters at various forums. While the Board had all along been
pleading the misuse of facility by certain unscrupulous taxpayers as one of the important
reasons for formulating a stringent procedure for the purpose, yet it is hardly defensible
to unnecessarily delay the issuance of exemption certificates due to lengthy departmental
procedures and flimsy objections raised by the tax authorities.
4. The matter has been reviewed. In furtherance of the instructions of the Finance
Minister on the subject, it has been decided to fast track the issuance of exemption
certificates. Henceforth, the Commissioners of Income Tax shall issue the exemption
certificates in the following categories within 24 hours of receipt of a complete
application which should initially be valid for at least 6 months:-
(i) Import of raw material by such exporters who have their own manufacturing
facility, and more than 80% of their sales are exports; and
(ii) the manufacturers who import raw materials for their own consumption and plant,
machinery, fixture, fittings and other equipment for their own use.
5. It will not be out of place to mention here that prompt issuance of exemption
certificates to the aforesaid category of persons in the above manner does not mean that
the other taxpayers are to be denied of their rightful claims for issuance of exemption
certificate. Instructions contained in SRO 593(I)/91, dated 30.6.1991 are still
valid. In the cases covered by the said SRO, except those mentioned at para 4 above,
exemption certificates shall be issued within 72 hours of fulfillment of requisite
formalities for such certificates.
6. All Commissioners of Income Tax are advised to follow these instructions in letter
and spirit and any lapse in this regard shall be seriously viewed. To avoid the processing
delays by the Department and for timely issuance of exemption certificates, the taxpayers
are advised to ensure that the applications filed for the purpose are complete in all
respects.
(Sardar Aminullah Khan)
Chief (Direct Tax Revenue)
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