Income Tax Ordinance, 2001 — Section 154: Exports

154. Exports. — (1) Every authorised dealer in foreign exchange shall, at the time of realisation of foreign exchange proceeds on account of the export of goods 1 Section 153A omitted by the Finance Act, 2013. Earlier it was substituted by the Finance Act, 2012, which was inserted by the Finance Act, 2008. The omitted section 153A read as follows: “153A. Payment to traders and distributors.— (1) Every manufacturer, at the time of sale to distributors, dealers and wholesalers, shall collect tax at the rate specified in Part IIA of the First Schedule, from the aforesaid persons, to whom such sales have been made.

(2)Tax credit for the tax collected under sub-section (1) shall be allowed in computing the tax due by the person on the taxable income for the tax year in which the tax was collected.” 2 New section 153B inserted through Finance Act, 2019. 3 Section 153B omitted by the Finance Act, 2021. The omitted section read as follows: “153B. Payment of royalty to resident persons.- (1) Every person paying an amount of royalty, in full or in part including by way of advance, to a resident person shall deduct tax from the gross amount payable (including Federal excise duty and provincial sales tax, if any) at the rate specified in Division IIIB of Part III of the First Schedule.

(2)The tax deductible under sub-section (1) shall be adjustable.” 328 Chapter X – Procedure by an exporter, deduct tax 1[including advance tax] from the proceeds at the rate specified in Division IV of Part III of the First Schedule. 2[ ]

(3)Every banking company shall, at the time of realisation of the proceeds on account of a sale of goods to an exporter under an inland back-to back letter of credit or any other arrangement as prescribed by the 3[Board], deduct tax from the amount of the proceeds at the rate specified in Division IV of Part III of the First Schedule. 4[(3A) The Export Processing Zone Authority established under the Export Processing Zone Authority Ordinance, 1980 (VI of 1980), shall at the time of export of goods by an industrial undertaking located in the areas declared by the Federal Government to be a Zone within the meaning of the aforesaid Ordinance, collect tax at the rate specified in Division IV of Part III of the First Schedule.] 5[(3B) Every direct exporter and an export house registered under the Duty and Tax Remission for Exports Rules, 2001 provided in Sub-Chapter 7 of Chapter XII of the Customs Rules, 2001 6[and Export Facilitation Scheme, 2021] shall, at the time of making payment for a firm contract to an indirect exporter defined under the said rules, deduct tax at the rates specified in Division IV of Part III of the First Schedule.] 7[(3C) The Collector of Customs at the time of clearing of goods exported shall collect tax from the gross value of such goods at the rate specified in Division IV of Part III of the First Schedule.]

(4)The tax 8[deductible] under 9[this section] shall be a 10[minimum] tax on the income arising from the 11[transactions referred to in this section]. 12[ ] 1 Words inserted by the Finance Act, 2024. 2 Sub-sections (2) omitted by the Finance Act, 2022. The omitted sub-section read as follows: “(2) Every authorised dealer in foreign exchange shall, at the time of realisation of foreign exchange proceeds on account of the commission due to an indenting commission agent, deduct tax from the proceeds at the rate specified in Division IV of Part III of the First Schedule.” 3 The words “Central Board of Revenue” substituted by the Finance Act, 2007. 4 Inserted by the Finance Act, 2003. 5 Inserted by the Finance Act, 2003. 6 Expression inserted by the Finance Act, 2023. 7 Inserted by the Finance Act, 2009. 8 The words “deducted” substituted by the Finance Act, 2012. 9 The word, figures, brackets and commas “sub-section (1), (3), (3A) or (3B)” substituted by the Finance Act, 2006. 10 The word “final” substituted by the Finance Act, 2024. 11 The words ”export or sale to an exporter” substituted by the Finance Act, 2007. 12 Sub-section (5) inserted by the Finance Act, 2015. 329 Chapter X – Procedure 1[ ]