The Impact!

February, 2024
- Federal Income Tax
- Federal Sales Tax
- Provincial Sales Tax
- Corporate Laws
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Preamble:

Riaz Ahmad, Saqib, Gohar & Co. Chartered Accountants is pleased to present herewith its
monthly technical updates encompassing the broadened scope under the banner of “The
Impact” for the month of February, 2024. This document aims to provide an update with respect
to the changes in the Income Tax Ordinance, 2001 (the Ordinance), Sales Tax Act, 1990, Provincial
Sales Tax on Services, Company Laws and related rules therein, introduced through various
SROS/Circulars issued during the month of February, 2024.

Disclaimer: This memorandum is prepared to the best of our knowledge and belief. It is
intended to provide only a general outline of the matters covered in the document. It should
neither be regarded as comprehensive nor sufficient for decision making purposes nor should
it be used in place of professional advice. Riaz Ahmad, Saqib, Gohar & Co. Chartered
Accountants does not accept any responsibility for any loss arising due to any action taken or
not taken by the readers of this publication.

Click here to download our android application for all the latest updates.

UPDATES PERTAINING TO FEDERAL SALES
TAX LAWS –
LAUNCHING OF SINGLE SALES TAX RETURN
- CIRCULAR 17230R:
The Federal Board of Revenue has through
its Circular bearing Ref. No. 2(54)SS(BDT-
1)GST/17230R dated February 01, 2024
announced the launch of the single sales tax
return for all provinces in order to promote
ease of doing business.
The single sales tax return is being
implemented in a phased approach by
making it mandatory for telecommunication
sectors only i.e. the following companies:
1- CM Pak Limited;
2- Pakistan Mobile Communications
Limited;
3- Pak Telecom Mobile Limited;
4- Telenor Pakistan (Private) Limited and
5- Pakistan Telecommunication Company.
EXCLUSION FROM SECTION 8B – SRO
242(I)/2024:
The Federal Board of Revenue has through
its SRO 242(I)/2024 dated February 23, 2024
added the following exclusion from the
purview of Section 8B of the Sales Tax Act,
1990:
- Pakistan LNG Limited (PLL)
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Section 8B restricts a taxpayer from
adjusting input tax exceeding 90% of its
output tax liability in a particular tax period.
However, the exclusions from this section
including the one added above are entitled
to adjust 100% of their output tax liability
from their input tax adjustments.
UPDATES PERTAINING TO CORPORATE
LAWS –
ACCOUNTING STANDARDS FOR NON-
GOING CONCERN BASIS OF ACCOUNTING –
SRO 69(I)/2024:
The Securities and Exchange Commission of
Pakistan has through its SRO 69(I)/2024
dated February 01, 2024 issued accounting
standards on preparing financial statements
on non-going concern basis for the annual
reporting period beginning on or after
January 01, 2024.
Earlier application of the above-referred
standards is permitted as well.
UPDATION IN LIST OF AUDITORS FOR SECP
REGULATED ENTITIES – CIRCULAR 03 OF
2024:
The Securities and Exchange Commission of
Pakistan has through its Circular 03 of 2024
dated February 06, 2024 updated the list of
audit firms authorized to audit SECP
Regulated entities which include but not
limited to Securities Exchanges, Futures
Exchanges, Clearing Houses, and Depository
Companies; Securities Brokers, Asset
Management Companies or Pension Fund
Managers or NBFCs and so on.

FIT AND PROPER CRITERIA FOR CORPORATE
RESTRUCTURING COMPANY – CIRCULAR 06
OF 2024:
The Securities and Exchange Commission of
Pakistan has through its Circular 06 of 2024
dated February 06, 2024 issued a detailed fit
and proper criteria for promotors, major
shareholders, board of directors and Chief
Executive Officer of a corporate
restructuring company.
PROMULGATION OF COMPANIES
REGULATIONS, 2024 – SRO 210(I)/2024:
The Securities and Exchange Commission of
Pakistan has through its SRO 210(I)/2024
dated February 12, 2024 promulgated the
Companies Regulations, 2024.
These regulations provide procedure
pertaining to matters such as Reservation of
a name of a Company, Change of name,
Incorporation of a Company, Memorandum
and Articles of Association and other such
matters.
GUIDANCE ON TRANSFER BETWEEN
REVENUE AND CAPITAL RESERVES –
CIRCULAR 04 OF 2024:
The Securities and Exchange Commission of
Pakistan has through its Circular 04 of 2024
dated February 15, 2024 issued guidance for
making transfers between capital and
revenue reserves.
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The board of directors with and to the extent
as provided in the Articles of Association
may transfer an amount to capital reserves.
The said amount would be set aside and
would not be used for the purpose of
distributing dividends.
The amount transferred may be utilized for
the purpose of issuing bonus shares and in
rare circumstances where the capital reserve
is no longer required may be transferred
back.
The above guidance also requires a Company
to disclose in its audited financial statements
the following regarding transfers made
between capital and revenue reserves:
- The amount transferred during the year
and
- Background and rationale of transfer
including brief of any strategy or plan
approved by the Board of Directors.
CLARIFICATION REGARDING TERM OF
INDEPENDENT DIRECTORS – CIRCULAR 05
OF 2024:
The Securities and Exchange Commission of
Pakistan has through its Circular 05 of 2024
dated February 19, 2024 provided its
clarification regarding tenure of
independent directors.
Under the law, an independent director shall
not be considered for re-appointment if
he/she has served for three consecutive
terms in the Board.
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It is clarified by the Securities and Exchange DISSOLUTION OF NON-PROFIT

Commission that any independent director
filling in a casual vacancy shall be deemed to
be appointed for the entire term for the
purpose of computing his/her three-tenure
limit.
PERMISSION TO OPERATE AS A SECURITIES
BROKER – SRO 202(I)/2024:
ORGANIZATIONS – SRO 239(I)/2024:
The Securities and Exchange Commission of
Pakistan has through its SRO 239(I)/2024
dated February 16, 2024 amended the
articles of association provided in Table F of
the First Schedule to the Companies Act,
2017.

The Securities and Exchange Commission of
Pakistan has through its SRO 202(I)/2024
dated February 14, 2024 amended the
Securities Brokers (Licensing and
Operations) Regulations, 2016.
Through the said amendment, a person
intending to operate as a securities broker
under the category of “Trading only” or
“Online only” shall not be required to obtain
prior permission from the Securities and
Exchange Commission of Pakistan.
Through the said amendment, where a non-
profit organization incorporated as per the
Companies Act, 2017 is dissolved, the said
organization after meeting its liabilities shall
transfer the remaining assets to another
non-profit organization incorporated as per
Section 42 of the Companies Act, 2017. Prior
to the said amendment, upon dissolution,
the remaining assets could be transferred to
any other fund or trust as well.

DISCLOSURE REQUIREMENTS FOR ZAKAT

RECEIVED – SRO 240(I)/2024:

The Securities and Exchange Commission of

Pakistan has through its SRO 240(I)/2024
dated February 16, 2024 issued accounting
standards on financial statement disclosures “Document End.”
of zakat received by an entity.

These standards require a non-profit

organization to disclose the accounting
policy adopted for the purpose of accounting
the receipt of zakat along with movement in
zakat balance, utilization of the said amount
and such other disclosures.
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