The Federal Board of Revenue (FBR) has isued excise duty on property purchases for developers and builders, Express News reporeted.
The notification issued on Thursday modifies the Federal Excise Rules 2005.
According to the notification, a developer is defined as an entity that transforms land into residential or commercial plots for sale.
This includes housing societies, cooperative societies, development authorities, or any other organisation involved in land development and subsequent sale of residential or commercial plots.
The new duty collection procedure mandates that developers and builders collect a 3% duty on the gross amount at the time of allotment or transfer of commercial property, or for the first allotment or transfer of open plots or residential properties, provided the buyer is on the active taxpayer list on the acquisition date.
If the buyer has not filed an income tax return on time, the duty rate rises to 5%, and to 7% if the buyer is not on the active taxpayer list.
The collected duty must be remitted to the federal government on the same day using a CPR or SWAPS payment receipt, as outlined in Form A.
The FBR has also issued specific forms for duty payment on properties, and all developers and builders will submit monthly statements to the relevant commissioner of the FBR using Form B.
Should there be any shortfall or delay in payment, the inland revenue officer responsible for the developer or builder will collect the unpaid duty and any applicable default surcharges for the period starting from when the duty was due.
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