A. Background: (1) TLQC 3605 of 7.7.26 about FST Third Schedule items' Compliance Guidance as per STGO 8 and KC Views in trail, blue, italic and double Line (2) For List of earlier relevant QCs, please refer to Para C.

B. Executive Summary - KC Recommendations

1. Be ready for any SRO, STGO, etcetc effective Immediately like STGO 9. In this connection, please also refer to TLQC about 3605 about STGO (in trail) having the same issue. Hence see para 2 to 4 and KC Views para D

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4. Multiplication: Although all the Commentaries are to the extent of the Subscribed IDs only, however, your Goodself is allowed to share this QC to Impart Knowledge to the maximum Employees, Relatives, Groups, etc as soon as possible, as they may get Notice anytime.

C. Updated Commentary – STGO 9

Further to KQU 3984 of 8.7.26, being an important matter, we would inform you about STGO 9 / 2026 / IR - Operations - Procedure and Conditions for Application of Minimum Value Addition Tax at the Rate of one percent on Import of Coal under Clause (6) of the Twelfth Schedule FST Act, 1990 of 7.7.26 (Attachment 3610.1) in ensuing paragraph, with emphasis ours in bold & Underline for quick reading.

In terms of clause (6) under the heading "Procedure and Conditions" of the Twelfth Schedule FST Act, I 990" the FBR hereby prescribed the following procedure and conditions for the application of minimum value addition tax at the rate of one per cent (l%) as specified therein on the import of coal. namely:-

1. Applicability.–This General Order is available to the import of coal falling under Chapter 27 of the Pakistan Customs Tariff where such coal is imported exclusively for, and directly supplied to. Coal-Fired Independent Power Producers.

2. Conditions.-The minimum value addition tax at the rate specified in clause (6) of the Twelfth Schedule is applicable only where–

(a)         the importer is registered under the FST Act. 1990:

(b)         the imported coal is imported exclusively for direct supply to a Coal-Fired Independent Power Producer holding a generation licence issued by the National Electric Power Regulatory Authority (NEPRA);

(c)         at the time of import. the importer furnishes to the Collector of Customs a purchase order, supply agreement. contract or such other documentary evidence as may establish that the imported coal is intended exclusively for direct supply to such Coal Fired independent Prover Producer:

(d)         the importer maintains complete documentary evidence relating to the import and subsequent direct supply of the coal and produces the same on demand before the Commissioner Inland Revenue or the Collector of Customs. as the case may be; and

(e)         the importer complies with such verification or audit requirements as may be prescribed under the Sales Tax Act. 1990 and the rules made thereunder.

3. Verification.-The Collector of Customs may allow assessment of imported coal in accordance with clause (6) of the Twelfth Schedule on the basis of the documents fulfilment by the importer and may subsequently verify fulfilment of the prescribed conditions through post-clearance audit or in coordination with the Inland Revenue authorities.

4. Recovery of Differential Tax. – Where it is established that–

(a)         the imported coal has been supplied to any person other than a Coal-Fired Independent Power Producer;

(b)         the imported coal was not imported exclusively for direct supply to a Coal-Fired Independent Power Producer; or

(c)         any condition prescribed under this General Order has not been fulfilled,

(d)         the importer shall be liable to pay the differential amount of minimum value addition tax. together with default surcharge and penalty, if any. in accordance with the provisions of the FST Act, 1990.

5. Definitions.-For the purposes of this General Order, unless there is anything repugnant in the subiect or context,-

(a)         "Coal-Fired Independent Power Producer (IPP)" means an independent Power Producer generating electricity from coal under a generation licence issued by the National Electric Power Regulatory Authority (NEPRA):

(b)         "Direct supply" means the supply imported coal by the importer directly to a Coal-Fired independent Power Producer without any intermediate sale, transfer or diversion: and

(c)         "words and expressions" used but not defined in this General Order shall have the same meanings as assigned to them FST Act, the Customs Act, 1969, and the rules made thereunder.

6. Effective Date: This General Order  come into force (as per STO) may be agreed from 8.7.26.

D. Kasbati & Co Views

It is always surprising that almost all STGOs (e.g. TLQC 3605 of 7.7.26 are applicable with immediate effective, Messrs same day when the STGO is issue when the same is unknown to several, as hardly everyone watch FBR plus other websites everyday for 3 times like eating food.

Hence, we recommended that all the Associations should take up this matter to Finance Ministry / FBR Policy Wing. We are also sending the same to relevant officials.

E. Further Details & Services

Should you require any clarification or explanations in respect of the above or otherwise, or require Income Tax, Federal & Provincial Sales Tax or Withholding Tax Statement, Advisory, Return Filing or Review services, please feel free to email Mr Amsal at amsal@kasbati.co with CC to info.kasbati@professional-excellence.com, asif.s.kasbati@professional-excellence.com.

Best regards for Here & Hereafter
Asif S Kasbati (FCA, FCMA & LLB)

Managing Partner 

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