SRO 1376(I)2024 for Duty Collection on Property Transfers

FBR has issues SRO Excise Duty On Property SRO 1376(I)2024 outlines the procedure for collecting FED on commercial property and open plots or residential property in Pakistan. Here’s a breakdown:

Duty Rates:

• 3%: For buyers who are active taxpayers as per Section 181A of the Income Tax Ordinance.
• 5%: For buyers who have not filed their income tax returns by the due date.
• 7%: For buyers who are not registered as active taxpayers under Section 181A.

Duty Collection:

• Developers or builders must collect the duty at the time of allotment or transfer of property.
• The collected duty must be credited to the Federal Government on the same day using a computerized payment receipt (CPR) or SWAPS payment receipt (SPR).
• If the duty is not paid or short-paid, the Inland Revenue Officer will proceed to collect the unpaid amount, including default surcharge.

Recovery from Developers:

• If a developer or builder fails to collect the duty from a buyer, they will be liable to pay the default surcharge.
• If the buyer has already paid the duty, the developer will not be held liable for recovery. However, they will still be responsible for paying the default surcharge.

Key Points:

• The duty rate depends on the buyer’s tax filing status.
• Duty must be collected at the time of property transfer.
• Failure to collect or pay duty can result in penalties and surcharges.
• Developers are responsible for ensuring that buyers pay the required duty.
• If a buyer has already paid the duty, the developer will not be liable for recovery.

Note: FED is not an adjustable tax.