However, in certain situations, the income of the non-resident is not chargeable to tax under the Ordinance, the person intending to make the payment without deduction of tax at source is required to inform the Commissioner and obtain an exemption certificate to this effect.

Delay in issuance of exemption certificates was a constant problem, for which it was provided that the commissioner will dispose of the exemption certificate application within 30 days. However, no consequence of non-issuance of exemption certificate within this time limit was provided in the law, he maintained.

A positive step has been taken and now, if the exemption certificate is not issued within 30 days, it will be deemed that the exemption certificate is issued and the FBR’s electronic system “IRIS” will automatically process and issue the certificate.

On the other hand, the Commissioner has been empowered to modify or cancel the certificate issued automatically by the “IRIS” on the basis of reasons to be recorded in writing after providing an opportunity of being heard to the applicant.

The subsequent modification or cancellation of the exemption certificate by the commissioner will raise issues in respect of payments made during the currency of automatically issued exemption certificate, which have not been addressed.