According to the clause, digital means payments and financial services including but not limited to –
(a) Online portals or platforms for digital payments / receipts;
(b) Online interbank fund transfer services;
(c) Online bill or invoice presentment and payment services;
(d) Over the counter digital payment services or facilities;
(e) Card payments using point of sale terminals, QR codes, mobile devices, ATMs, Kiosk or any other digital payments enabled devices; or
(f) Any other digital or online payment modes.
While introducing Clause (la), the term ‘digital means’ was not defined. It was, although, ought to mean all sort of paperless mode of payments; however, due to lack of proper definition confusion persisted.
The State Bank of Pakistan (SBP) in its instructions issued to banks vide PSP & OD Circular Letter No. 5 of 2021 dated October 15, 2021 explained digital modes of payments, which had been considered to be relevant for the purposes of Clause (la).
The Act also authorized the Federal Board of Revenue (FBR) to notify the date of implementation of digital payment service.
Through the Tax Laws (Third Amendment) Ordinance, 2021, a new Clause (la) was introduced under section 21 which requires every company to make payment for a transaction under a single account head exceeding Rs250,000 through ‘digital means’ from their notified business bank account, subject to certain exclusions. Otherwise, the expense would become inadmissible.
Due to challenges and practical difficulties in the implementation of Clause (la), the Federal Board of Revenue (FBR) deferred its implementation from time to time till January 31, 2022.