LAHORE June 2 (APP): Finance Minister Punjab Dr Ayesha
Ghous Pasha introduced the Finance Bill, 2017 in the Punjab
Assembly on Friday
Following is the Bill:
To abolish, rationalize and merge certain taxes and duties in the Punjab.
It is necessary in public interest to abolish, rationalize and merge certain taxes and duties in the Punjab, and to deal with ancillary matters.
Be it enacted by provincial assembly of the Punjab as follows:
1. Short title, extent and commencement.- (1) This Act may be cited as the Punjab Finance Act 2017. (2) It extends to whole of the Punjab.
(3) It shall come into force on the first day of July 2017. 2. Amendments in Act II of 1899.- In the Stamp Act, 1899 (II of 1899)
(1) In section 2, after subsection (25), the following subsection “(26)” urban area” means an area which is :
(a) a rating area under the Punjab Urban Immovable property tax Act, 1958 (V of 1958)
(b) the area already declared as an urban area under the Punjab finance Act, 2010 (VI of 2010)
© Any other area which the board of revenue may, by notification, declare as an urban area, and (d) an area developed by a development authority, housing authority, statutory body, cooperative housing society or a cooperative housing society or a real estate company or developer.”.
(2) in Schedule I:
(a) in Article 2, in column 3, the following Note shall be inserted at the end.
Note: In case of registration of the instrument, an additional stamp duty of Rs.25/-shall be charged,”. (b) in Article 3, in column 3, the following note shall be inserted at the end:
Note: In case of registration of the instrument, an additional stamp duty of Rs.10/- shall be charged.” © in article 5, in column 3, the following note shall be inserted at the end:
Note In case of registration of the instrument, an additional stamp duty at the rate of 0.1% shall be charged.” (d) in Article 6, in column 3, the following Note shall be inserted at the end:
Note: In case of registration of the instrument, an additional stamp duty at the rate of 0.1% shall be charged.” (e) in Article 15, in column 3 the following Note shall be inserted at the end:
Note: In case of registration of the instrument, an additional stamp duty of Rs.25/-shall be charged.’ (f) in Article 16, in column 3, the following Note shall be inserted at the end> Note: In case of registration of the instrument, an additional stamp duty of Rs. 25/- shall be charged.” (g) In Article 18, for the existing entries in column 2 and column 3, the following shall be substituted:
“Certificate of sale
(In respect of each property put up as a separate lot and sold) granted to the purchaser of any property sold by public auction by a civil of revenue court, of collector or other revenue officer: a) in case of Five percent of immovable value of the property in an property. urban area, and b) in any other case Three percent of the value of the property.
NOTE: In case of registration of the instrument, an additional stamp duty shall be charged as under:
(a) Rs.500/- if the amount of consideration does not exceed RS. 500,000/- and (b) Rs. 1000/- if the consideration exceeds Rs 500,000/-‘ (h) in Article 23, for the existing entries in column 2 and column 3, the following shall be substituted:
“Conveyance as defined by section 2(10) not being a Transfer charged or exempted under Article 62:
(a) in case of Five percent of the value of immovable property. property in an urban area, and (b) in any other Three percent of the case value of the property.
Note: in case of registration of the instrument, an additional stamp duty shall be charged as under:
(a) Rs. 500/-, if the amount of consideration does not exceed Rs.500,000/- and (b) RS.1000/-, if the amount of consideration exceeds Rs.
500,000/-
© in case of a one hundred rupees,” registered motor vehicle (i) in Article 26, in column 3, the following Note shall be inserted at eth end:
Note: In case of registration of the instrument, an additional stamp duty of Rs.25/- shall be charged.” (j) in Article 27-A, for the existing entries in column 2 and column 3, eth following shall be substituted:
“Decree, rule of a court or an order of a court based on mutual consent of the parties in cases involving transfer of an immovable property including sale, exchange, gift of mortgage, declaring or conferring a right in, or title to, an immovable property: a) in case of five percent of the immovable value of the property in an property. urban area, and b) in any other case Three percent of the value of the property.
Note: in case of registration of the instrument, an additional stamp duty shall be charged as under:
(a) Rs.500/-, if the amount of consideration does not exceed Rs. 500,000/-. and (b) Rs. 1000/-, if the consideration exceeds Rs. 500,000/-Explanation.-Value, in this Article, means the value of the property in accordance with eth valuation table as notified by eth collector or where valuation table is not available, eth average sale price of a property of similar nature in the same revenue estate or locality in the preceding year as may be determined by eth collector.”
(k) in Article 31, for the existing entries in column 2 and column 3, eth following shall be substituted:
EXCHANGE of immovable property:
a) in case of five percent of the immovable highest value of property in an property plus two urban area, and percent of the lowest value of the property and b) in any other case Three percent of the highest value of the property.
NOTE: In case of registration of the instrument, an additional stamp duty shall be charged as under:
(a) Rs.500/-, if the amount of consideration does not exceed Rs.5000,000/- and (b) Rs. 1000/-, if the consideration exceeds Rs.500,000/-(i) in Article 32, in column 3, the following Note shall be inserted at eth end:
NOTE: In case of registration of the instrument, an additional stamp duty shall be charged as under:
(a) Rs. 500/-, if the amount of consideration does not exceed Rs.500,000/-, and (b)Rs.1000/-, if the amount of consideration exceeds Rs.500,000/-(m) in Article 33, for the existing entries in column 2 and column 3, the following shall be substituted;
GIFT- Instrument of including a memorandum of oral gift of an immovable property, note being a settlement (Article 58) or will be transfer (Article 62) – when executed in respect of an immovable property: a) in case of five percent of the immovable value of the property in an property: provided urban area, and that if the gift deed is executed between spouses, father, mother, son, daughter, grandparent, sibling or from one wife of widow to another wife or widow of the same husband, eth rate of stamp duty shall be three percent of the value of the property. b) in any other case Three percent of the value of the property.
Note: In case of registration of instrument, an additional stamp duty shall be charged as under:
(a) Rs.500/-, if the amount of consideration does not exceed Rs.500,000/- and (ii) (b) Rs.1000/- if the amount of consideration exceeds Rs. 500,000/-(n) in Article 34, in column 3, the following note shall be inserted at eth end:
Note: In case of registration of the instrument, an additional stamp duty of Rs.25/- shall be charged.”, (o) in Article 35, for the existing entries in column 2 and column 3, the following shall be substituted:
“LEASE, including an under lease or sub-lease and any agreement to let or sub-let:
(1) where by such lease the rent is fixed and no premium is paid or delivered:
(a) where the lease 3.25% of the purports to be for average annual rent a term of less than of the lease. Twenty years. (b) where the lease purports to be for a term of twenty years:
(i) in case of 5.25% of the immovable average annual rent property in an of the lease. urban area, and (ii) in any other 3.25% of the case average annual rent of the lease.
© where the lease purports to be for a term in excess of twenty years or in perpetuity:
(i) in case of 5.25% of the immovable consideration equal property in an to the whole urban area, amount of rent and which would be paid or delivered in respect of the first ten years of the lease.
(ii) in any other case 5.25% of the consideration equal to eh whole amount of rent which would be paid or delivered in respect of the first ten years of the lease. (d) where the lease does not purport to be for any definite term:
(i) in case of immovable property in an urban area, and 5.25% of the consideration equal to he whole amount of the rent which would be paid or delivered in respect of the first ten years of the lease.
(ii) in any other case. 3.25% of the consideration equal to the whole amount of rent which would be paid or delivered in respect of the first ten years of the lease. (2) (a) where the lease is granted for money advanced and where no rent is reserved:
(i)in case of immovable property in an urban area, and 5.25% of the consideration equal to eh amount of the advance set forth in the lease, and (ii) in any other case 3.25% of the consideration equal to eh amount of such advance as set forth in the lease.
(b) where the lease is granted for a fine or premium and where no rent is reserved:
(i) in case of immovable property in an urban area, and 5.25% of the consideration equal to he amount of such fine or premium as set forth in the lease.
(ii) in any other case 3.25% of the consideration equal to the amount of such fine or premium as set forth in the lease. (3) (a) where the lease is granted for money advanced in addition to the rent reserved:
(i) in case of immovable property in an urban area, and 5.25% of the consideration equal to the amount of advance as set forth in the lease, in additional to the duty which would have been payable on such lease, if no advance had been paid or delivered: provided that, in any case when a agreement to lease is stamped with the ad valorem stamp required for a lease and a lease in pursuance of such agreement is subsequently executed, the duty on such lease shall not exceed one hundred rupees.
(ii) in any other case 3.25 percent of the consideration equal to the amount of advance as set for the in the lease, in additional to the duty which would have been payable on such lease, if no advance had been paid or delivered: provided that, in any case when an agreement to lease is stamped with the ad valorem stamp required for a lease and a lease in pursuance of such agreement is subsequently executed, the duty on such lease shall not exceed one hundred rupees. (b)Where the lease is granted for a fine of premium in addition to the rent reserved: (i) in case of immovable property in an urban area, and 5.25% of the consideration equal to eh amount of such fine of premium as set forth in the lease in additional to the duty which would have been payable on such lease, if no fine or premium had been paid or delivered. Provided that, in any case when an agreement to lease is stamped with the ad valorem stamp required for a lease and a lease in pursuance of such agreement is subsequently executed, the duty on such lease shall not exceed one hundred rupees.
(ii) in any other case 3.25% of the consideration equal to the amount of such fine or premium as set forth in the lease in addition top the duty which would have been payable on such lease, if no fine or premium had been paid or delivered: provided that, in any case when an agreement to lease is stamped with the ad valorem stamp required for a lease and a lease in pursuance of such agreement is subsequently executed, the duty on such lease shall not exceed one hundred rupees. Exemption lease, executed in the case of a cultivator for purposes of cultivation (including a lease of trees for the production of food or drink) without the payment or delivery of any fine or premium when a definite term is expressed and such term does not exceed one year, or when the average annual rent reserved does not exceed one hundred rupees.”
(p) in Article 40, in column 3:
(i) at the end of clause (a), clause (b) and clause (c), the following note shall be inserted in each case:
Note: in case of registration of the instrument, an additional stamp duty shall be charged as under:
(a) Rs.500/- if the amount of consideration does not exceed RS.500,000/- and (b) Rs.1000/-, if the amount of consideration exceeds Rs.500,000/-(ii) in clause (d), for the existing entries, the following shall be substituted (i) 0.45% of the loan amount subject to a maximum of one hundred thousand rupees, and (ii) 0.45% of the loan amount:
(q) in Article 45, in column 3, in clause (d), the following note shall be inserted before the sub-heading “exception._ Note: in case of registration of the instrument, an additional stamp duty shall be charged as under (a) Rs.500/-, if the amount of consideration does not exceed Rs.500,000/- and (b) Rs.1000/-, if the amount of consideration exceeds Rs.500,000/-® in article 46, in column, 3 the following note shall be inserted at the end:
Note in case of registration of the instrument, an additional stamp duty of Rs.25/- shall be charged.” (s) in article 48, in column 3:
(i) against clause (a), in column 2, the following note shall be inserted Note: in case of registration of the instrument, an additional stamp duty of Rs.25.- shall be charged.”
(ii) against clause (b), in column 2, the following note shall be inserted:
Note: in case of registration of the instrument, an additional stamp duty shall be charged as under:
(a) Rs. 500/-, if the amount of consideration does not exceed RS. 500,000/- and (b) Rs.1000/- if the amount of consideration exceeds Rs.
500,000/-
(iii) against clause (bb), in column 2, the following note shall be inserted at the end Note: in case of registration of the instrument, an additional stamp duty of Rs.25/- shall be charged.
(t) in article 54, in column 3, the following note shall be inserted at the end:
Note in case of the registration of the instrument, an additional stamp duty shall be charged equal to the amount of the registration fee paid on the principal mortgage deed.” (u) in Article 55, for existing entries in column 2 and column 3, the following shall be substituted:
RELEASE, that is to say any instrument (not being such a release as is provided for by section 23- A) whereby a person renounces a claim on another person or against any specified property.
(i) in case of immovable property in an urban area, and Five percent of the amount of the claim or value of the property. (ii) in any other case Three percent of the amount of the claim or value of the property.
Note: in case of registration of the instrument, an additional stamp duty shall be charged as under, (a) Rs. 500/-, if the amount of consideration does not exceed RS. 500,000/- and (b) Rs. 1000/- if the amount consideration exceeds Rs. 500,000/-(v) in article 56 in column 3, the following note shall be inserted at the end.
Note: In case of registration of the instrument, an additional stamp duty of Rs.25/- shall be charged. (w) in article 57 in column 3, the following note shall be inserted at the end.
Note in case of registration of the instruments, an additional stamp duty of Rs. 25/- shall be charged. (x) in article 58, in column 3, following note shall be inserted.
Note: In case of registration of the instruments, an additional stamp duty shall be charged as under:
(a) Rs.500/-, if the amount of consideration does not exceed Rs.500.000/- and (b) Rs. 1000/- if the amount of consideration exceeds RS.
500.000/-
(y) in article 61, in column 3, the following note shall be inserted at the end.
Note An additional stamp duty at the rate of 5/8th of the stamp duty which was paid on the original lease deed. (z) in article 63, for the existing entries in column 2 and column 3, the following shall be substituted> TRANSFER OF LEASE by way of assignment and not by way of under lease:
(i) in case of immovable property in an urban area, and five percent of the amount of consideration for the transfer. (ii) in any other case Three percent of the amount of consideration for the transfer.
Note: in case of registration of the instrument, an additional stamp duty shall be charged as under (a) Rs. 500/- if the amount of consideration does not exceed Rs.500.000/- and (b) Rs. 1000/- if the amount of consideration exceeds Rs.500,000/-Exemption:
Transfer of any lease exempt from duty, and
(aa) in article 63-A, for the existing entries in column 2 and column 3, the following shall be substituted:
TRANSFER OF RIGHT OR INTEREST RELATING TO AN IMMOVABLE
PROPERTY, that is to say transfer of a right or interest relating to an immovable property or an acknowledgement of such transfer, by a development authority, housing authority, statutory body, cooperative housing society, company or a developer and every instrument by which a right or interest relating to an immovable property is being transferred, registered, recorded or acknowledged by the authority, body, society company or developer.
Explanation.- Transfer of the right or interest under this article does not include original allotment from a development authority, housing authority, statutory body, cooperative housing society or company and transfer through inheritance. (i) in case of immovable property in an urban area, and five percent of the value of the property.
(ii) in any other case Three percent of the value of the property.
3. Amendment in Act VI of 2010.- in the punjab finance, act, 2010 (VI of 2010), section 6 shall be omitted 4. Amendments in Act XLII of 2012.- in the punjab sales tax on services act 2012 (XLII of 2012)
(1) in section 2:
(a) in clause (17), before the semi colon at the end, the following words shall be inserted.
‘ and different dates may be so specified for furnishing different parts of annexure of the return. (b) in clause (30), for sub clause (b), the following shall be substituted:
(b) carries on an economic activity, wholly or partially, either through any other person such as an agent, associate, franchise, branch, office, or otherwise in the punjab or through virtual presence or a website or a web portal or through any other form of e-commerce by whatever name called or treated.
(2) after section 11, the following section 11A shall be inserted:
“11A, Liability of a registered person.-
Subject to the provisions of subsection (1) of section 11, where a registered person receiving the taxable service falls to make payment of the tax to a service provider with in one hundred and eighty days from the date of the tax invoice and such service provider has also not made the payment thereof within the prescribed due date, the person providing and the person receiving taxable service shall, jointly and severally, be liable for payment of such tax.
Explanation I; The tax shall include the total amount of the tax and also the tax as was liable to be withheld or deducted by service recipient as notified under section 14 of the Act.
Explanation II: The registered person shall include a person
covered by the withholding agent as notified under section 14
of the Act
(3) After section 14, the following section 14A shall be inserted:
“14A. Special procedure for collection of tax, etc.- (1)
Notwithstanding anything contained in this Act, the Authority may reqiure any other
person or class of persons, not necessarily being a service provider or a service recipient in
a particular transaction, to collect full or part of the tax charged from another person or
class of persons on the provision of any taxable service or class of taxable services and to
deposit the tax so collected, in the Government treasury within such time and in such
manner as the Authority may, by notification in the official Gazette, specify.
(2) For purposes of subsection (1), the special procedure prescribed
for collection and payment of tax may also provide for registration, book keeping, invoicing
or billing requirements, returns, and other related matters in respect of any service or class
of services, as may be specified.
(3) Where a person or class or persons is required to collect full or
part of the tax on the provision of any taxable service or class of tax or having collected the
tax, fails to deposit person or class of persons shall be personally liable to pay the amount
of tax to the government in the prescribed manner.
(4) in section 16:
(a) for subsection (2) the following shall be substituted:
(2) Subject to provisions of section 16A or section 16B or to such conditions and
restrictions as may be prescribed, the authority may allow a registered person to claim
adjustment, deduction, or refund in respect of the tax paid or payable under any other law
in for any taxable service or
goods or class of taxable service or goods used in connection with the provision of a taxable
service by such person, on his furnishing a tax invoice or declaration of import of goods in
his name which bears his national tax number.
(b) for subsection (4), the following shall be substituted:
(4) Notwithstanding anything contained in this Act or the rules made thereunder, the
authority, with the approval of the government, may, by notification in the official Gazette
and subject to such conditions, limitations or restrictions as may be specified therein, allow
a registered person or class of persons to deduct such amount of input tax from the output
tax as may be specified in the notification.
(c) after subsection (4), the following subsection (5) shall be inserted:
(5) For purposes of subsection (1) or subsection (2), the amount of tax to be deducted
or adjusted shall not include any amount of additional tax, further tax, extra tax, default
surcharge, fine, penalty or fee imposed or charged under this act or any other law.
(5) After section 16B, the following section 16C shall be inserted:
16C adjustment of input tax paid on certain goods and services.
Notwithstanding anything contained in this Act, the input tax paid on acquisition of
such of the capital goods, machinery and fixed assets as are classified under section XVI,
Chapters 84 and 85 of the first schedule of the Customs Act 1969 (IV of 1969) shall be
adjustable against the output
tax in twelve equal monthly instalments.
(6) in section 24, in subsection (2) for the word five the word eight shall be substituted.
(7) in section 39
(a) in subsection (1), after clause (f), the following clauses
(ff) and (FFF) shall be inserted
(ff) Risk compliance officer of the authority
(fff) Enforcement Officer of the authority.
(b) for subsection (4) the following shall be substituted
(4) Risk compliance officers, enforcement officers, audit officers, inspectors and other
officers of equal or lower designations, if any, shall be subordinate to the deputy
commission or as the case may be to the Assistant Commissioner or as the authority may,
from time to time, specify.
(8) in section 48, in the table
(a) in serial No 10
(i) in column 3, for the expression twenty five thousand the expression one hundred
thousand shall be substituted, and
(ii) in column 4, for the words general and section 59 the words general and section 59 and
section 70 shall be substituted.
(9) in section 70, in subsection (1)
(a) after clause (b), the following clause (bb) shall be inserted:
(bb) require by a notice in writing payment of money owed to a taxpayer by any person on
account of legally enforceable relations created between the taxpayer and the other person
including but not limited to purchase contracts, contracts with credit or financial
institutions or with banking
companies, lease contracts, loan agreements, building loan contracts, life insurance
contracts, employment or work contracts. and
(b) in clause (f) for the full stop at the end, a colon shall be substituted and thereafter the
following proviso shall be added.
Provided that no action shall be taken against the person during the pendency of the
appeal if any under section 63 of the act if he deposits at least twenty five per cent the
amount of the tax demanded from him.
(10) after section 76 the following section 76A shall be inserted:
76A. power to restrain certain authorities .-The authority may, with the approval of the
government and by notification in the official gazette, require that any authority competent
to issue or renew a license or to grant permission to any person to engage in an economic
activity which is a taxable service, shall not issue or renew such license or grant permission
unless the licensee or the grantee furnishes the evidence that he is a duly registered person
under section 25, section 26 or section 27 of the act.
(11) in section 78 in subsection (7) after the word requisition the words including notices
and show cause notices shall be inserted:
(12) in section 84, after subsection (1), the following explanation shall be added:
Explanation.- The expression act or thing to be done includes an act or thing to be done
by a registered person or by an authority specified in section 39 of the Act.
(13) in second schedule
(i) in serial No. 6, in column 2, in the first sub-heading
“Excluding for clause (a), the following shall be substituted;
(a) internat services, whether dialup or broadband, including email services, data
communication network services (DCNS) and value added data services, valued at not more
than Rs.1500 per month per student;
(ii) in serial No.14
(a) under the sub-heading (Excluding after clause (iii), the following explanation shall be
inserted:
Explanation- Notwithstanding the rate of 5 % fixed in column 4, the following further
reduced rates shall be applicable:
(a) one per cent for all services specified at S.No.14 without input tax credit or adjustment
to the extent of government civil works including those of cantonment boards involved in
the ongoing development schemes and projects launched during financial year 2016-17 and
funded under the annual development plan of the punjab government of funded through
foreign loans
where the negotiations were finalized after 1st of July 2016 or funded under public sector
development program of the federal government or funded by the cantonment boards and
(b) zero per cent for all services specified at S.No.14 without input tax credit/adjustment
to the extent of government civil works including those of cantonment boards involved in
the ongoing development schemes and projects launched prior to financial year 2016-17 and
funded under the annual development plan of the Punjab government or funded through
foreign loans where the negotiations were finalized as on 1st of July 2016 or funded under
public sector development program of the federal government of funded by cantonment
boards.
(iii) in column 4, for the words sixteen percent the words five percent without input tax
credit/adjustment shall be substituted, and
(iv) in serial No. 16 in column 2, under the sub-heading Excluding clause (i) shall be
omitted.
Statement of objects and reasons
The Board of Revenue, Punjab recently has introduced e-stamping project for
facilitation of public and to eliminate the usage of counterfeit stamp papers. Owing to great
success, it has been proposed to merge all the taxes/Duties/fees in one head of account of
stamp duty which would be issued through e-stamping system. The merger of all taxes
would ease the procedure of deposits and helpful in reconciliation process as
well.
Therefore, it has been proposed that the other taxes and fee i.e. Capital Value Tax and
registration fee which is being charged @ 2 % of the value of the urban property and Rs.
500/- in case of value up to Rs. 500,000/- and RS.1000/- exceeding RS.500,000/- respectively
may be merged into the head of account of stamp duty. The new rate of stamp duty would
be 5 % of the consideration and the component of registration fee has been proposed to be
added in the stamp duty. However, the exemptions already envisaged in the section 6 of
Finance Act, 2010 (as amended) from the payment of CVT would remain intact to the
extent of payment of capital value tax. The definition of urban area has also been proposed
to be included in Stamp Act 1899. This step would be another landmark in the ease of
doing business.
The operational experience gained by PRA during the preceding financial year has led
to the proposal of some technical amendments in the Punjab Sales Tax on Services Act
2012. The technical amendments cover the issues like harmonization with Federal Sales Tax
Act 1990 by introducing counter-part provisions for sales tax real time invoice verification
(STRIV), clarifying the scope of service exports, definition of place of business for capturing
transactions with respect to e-commerce increasing the number of authorities under the act
and introducing the concept of collection agent not being a service provider or a service
recipient. The amendments will work to further streamline the application of the said act
to increase efficiency of PRA along with facilitation of the taxpayers. Hence this bill.
