Day: April 14, 2022

The Oil and Gas Regulatory Authority (OGRA) has recommended an increase in petroleum prices by up to Rs. 119 effective from April 16, 2022.

The working forwarded by OGRA to the Petroleum Division has proposed an increase in petroleum prices based on the current zero petroleum levy and GST rate and also on the maximum petroleum levy and GST rate.

The working based on maximum petroleum levy and GST rate proposes an increase in prices of high-speed diesel (HSD) by Rs. 119 per liter, prices of petrol by Rs. 83.50 per liter, prices of kerosene oil by Rs. 77.56 per liter and light diesel oil (LDO) by Rs. 77.31 per liter.

On the other hand, the working based on the zero petroleum levy and GST rate proposes an increase in prices of high-speed diesel (HSD) by Rs. 51.32 per liter, prices of petrol by Rs. 21.30 per liter, prices of kerosene oil by Rs. 36.5 per liter and light diesel oil (LDO) by Rs. 38.89 per liter.

The final decision to increase the prices of petroleum products rests with Prime Minister Shahbaz Sharif. The prime minister, on Wednesday, had chaired an emergency meeting to review the prices of petroleum products. The premier was briefed by the OGRA Chairman petroleum prices mechanism and potential options to continue the subsidy considering the IMF commitments.

It is pertinent to mention here that back in February former prime minister Imran Khan had announced a reduction of Rs. 10 per liter in petroleum prices and announced the new rates would remain in place till the FY23 budget.

The global crude oil prices have soared since then, however, prices of petroleum products have remained unchanged in Pakistan. The current price of petrol stands at Rs. 149.86 per liter, whereas the per-liter prices of diesel, kerosene oil, and light diesel are Rs. 144.15 per liter, Rs. 125.56 per liter, and Rs. 118.31 per liter, respectively.

Source: Pro Pakistan

Karachi-based business-to-business raw materials marketplace, Zaraye, raises $2.1 million in their pre-seed round from Tiger Global and Zayn Capital.

Other investors include +92 Ventures, Alan Rutledge, Jack Rizvi, and current and former Careem employees holding key positions in their tenures. This is Tiger Global’s first pre-seed investment in Pakistan.

Founded in late 2021, Zaraye helps manufacturing businesses procure raw materials and finance the working capital. It is currently serving clients across the textile and construction industries, with over 300 partners and suppliers spread out in 20+ cities.

Pakistan’s industrial manufacturing sector contributes to 20 percent of the country’s economy with a $35 billion raw material market annually, with raw materials contributing 60-65 percent of the total costs for the manufacturers. In conditions where net margins are thin, finding efficiency in costs becomes critical for these businesses to win orders and sustain against competition locally and globally. Additionally, SMEs have always found acquiring financing a huge battle for their businesses from financial institutions, and are forced to turn to informal markets with ~2.5x premiums.

Co-founder and CEO of Zaraye, Ahsan Ali Khan, commented:

We aim to strengthen the backbone of the country’s economy by helping the entrepreneurs in finding avenues to optimize and scale. Zaraye will help our partners to compete locally and globally as they find more savings in time and money to create the best products. With the confidence of amazing investors in Zaraye, we are geared to supercharge our mission to reach millions of users.

Traditionally, a manufacturer would connect with a handful of intermediaries or directly with the suppliers with a tedious process of going through multiple phone calls and waiting for them to furnish rates. This process is long and tedious, and brings very limited options for the buyers to make a decision. With Zaraye, buyers of raw materials can simply post their requirements for the required product, and the relevant suppliers can furnish quotes in real-time, making the information for buying decisions vast and quick. At the same time, the suppliers can access consolidated demand volumes with the vast network of buyers on Zaraye’s platform.

Managing Partner & Co-Founder of Zayn Capital BitRate Fund, Faisal Aftab, commented:

Procurement in the manufacturing industry is a massive problem with similar models showing immense success in comparable markets. We believe in the Zaraye team and their capabilities in solving this problem in Pakistan. We’re super excited to be a part of their journey.

Zaraye is available across platforms with their iOS, Android, and web app. The platform helps buyers of raw materials connect with a multitude of suppliers who furnish their quotes in real-time making the process faster and hassle-free.

Zaraye was founded by IBA class fellows, Taha Iqbal Teli, Hashair Junaid Ahmedani, and Ahsan Ali Khan, who worked together on multiple instances throughout their academic and professional careers. Taha and Ahsan have been part of the tech ecosystem for the past five years, with experience at giants like Careem and Swvl. Ahsan led Swvl’s Travel category for Pakistan in his last stint, while Taha led the TaaS product for Karachi before launching the Daewoo Adda, a logistics product for transportation’s leading player Daewoo.

Meanwhile, Hashair after completing his post-graduate degree at the University of Bath, where he studied with Taha, returned to Pakistan to join his family business in Karachi. Hashair soon found his passion in the hospitality industry introducing Czech and Levantian cuisine to Pakistan with two successful ventures while building an FMCG brand for imported coffee from Latin America.

Co-founder of Zaraye, Hashair Junaid Ahmedani, added:

Small and medium business owners have been trapped in a cycle of high competition and lack of financing options- Zaraye aims to help these businesses scale as they find the efficiencies in procurement and financing options to make better decisions for their businesses.

Co-founder of Zaraye, Taha Iqbal Teli, said:

Our goal is to help these entrepreneurs focus on manufacturing and selling their products. Zaraye will handle the entire procurement process, all the way from getting quotes, assuring quality, and delivering to their doorsteps with any after-sales assistance our partners might require. Our partners remain at the heart of all our endeavors and we believe this massive problem cannot be solved without a world-class team. As we build great solutions for our customers, we are always on the lookout for great talent and I would encourage everyone who feels passionately about building solutions at scale that make lives easy and loved by customers to apply away.

Having worked together on multiple projects, the three came together to solve one of the biggest problems faced by the manufacturing industry in emerging markets.

Hashair’s experience while working with his family business was critical in understanding the problems faced by the businessmen and how they operate. The team amalgamates context from legacy businesses and builds modern solutions at scale.

Zaraye has built a strong team with experience from Swvl, the PWC UK chapter, Daraz, and Louis Dreyfus, and their tech team is led by ex-CTO Cheetay, Asif Ali.

Source: Pro Pakistan

The Appellate Tribunal Inland Revenue (ATIR), Islamabad declared that the Pakistan Ordinance Factories (POF) Board is the department of the Federal Government and any payment received by the Federal Government, a Provincial Government, or a Local Government shall not be liable to any collection or deduction of advance tax.

This has been announced by the Appellate Tribunal Inland Revenue (ATIR), Islamabad while deciding the case about the status of the M/s Wah Industries Limited, Wah Cantt (appellant).

The ATIR has declared that the POF Board is the department of the Federal Government and any payment received by the Federal Government, a Provincial Government, or a Local Government shall not be liable for any collection or deduction of advance tax. Further, the revenue department itself issued the Free Tax Number (FTN) to the POF Board.

Details of the case revealed that the appellant i.e. M/s Wah Industrie Limited, was incorporated as a public limited company under the Companies Act. The company is wholly owned by the Government of Pakistan through the Pakistan Ordinance Factories (POF).

The company is principally engaged in the manufacturing and sale of 12-Bore ammunition, Ammo containers, and sale of civil products from POF and other parties. The company also acts as a commission agent for POF to facilitate the sale of obsolete/surplus stores and scraps.

During the scrutiny of the taxpayer’s record for Tax Year 2015, it was observed that the taxpayer has not deducted withholding tax in terms of section 150 of the Income Tax Ordinance, 2001 (“the Ordinance”) while making dividend payments amounting to Rs.200,000,000/- to the POF Board.

Subsequently, Large Taxpayer Office (LTO), Islamabad passed an assessment order under section 161/205 of the Income Tax Ordinance. Felt aggrieved, the appellant taxpayer filed an appeal before the Commissioner Inland Revenue (Appeals-I), Islamabad who decided the appeal of the taxpayer vide Order in Appeal No.89/2021 dated 24.09.2021. Being aggrieved, the appellant registered person has now come up before the ATIR and has assailed the impugned order on a number of grounds.

The judgment of the ATIR stated that the only issue involved in the instant appeal is whether the appellant was required to withhold the tax under section 150 of the Ordinance while making payment on account of the dividend to the Pakistan Ordnance Factories Board? Before answering the said question, it is necessary to first determine the status of the POF Board whether it is a body corporate and comes within the ambit of section 49(4) of the Income Tax Ordinance.

Whereas the POF is a corporate body, it has been established by the Federal Government under the Pakistan Ordnance Factories Board Ordinance, 1961. The preamble of the Ordinance clearly suggests that POF Board is working on behalf of the Federal Government which says that “Whereas it is expedient to provide for the constitution of Pakistan Ordnance Factories Board and for investing it with certain powers and functions of the Central Government in relation to the Ordinance Factories.’ Section 3 and 6 of the Ordinance provide the constitution of the Board and its functions respectively.

The lawyers of the POF Board explained that the POF Board is a government organization invested in the functions of the Federal Government. The mere fact that government functions have been entrusted to the board would not make such a Board as a corporate body. Further argued that POF Board does not fall within the ambit of section 49(4) of the Income Tax Ordinance.

The judgment of the ATIR concluded that the principal function of the Board is to manage and administer the affairs of the factories and to run them and commercial lines to adequately meet during war and peace the needs of the defense of the country and to utilize the surplus capacity of the factories to meet the needs of the civil population. Section 7 of the Ordinance provides the power of the Board.

Thus, the POF Board is the department of the Federal Government and in terms of subsection (3) of section 49 of the Ordinance, any payment received by the Federal Government, a Provincial Government, or a Local Government shall not be liable to any collection or deduction of advance tax, ATIR added.

Source: Pro Pakistan