Law: Sales Tax Act, 1990

Section: 40C, 50A, 50, 40, 23, 76

The Video Analytics Rules (“Rules”) establish a precisely defined scope of application that operationalizes the board authority granted under Section 40C. The Rules apply specifically to \"specified goods\" as defined in Rule 150 ZQR , encompassing goods listed in the Third Schedule to the Act of 1990 and any other goods subsequently notified by the FBR through specific orders. The Rules mandate that no person engaged in manufacturing specified goods shall remove production from business premises without undergoing the process of intelligent video surveillance, creating a statutory prohibition that carries significant legal consequences for non-compliance.
The Rules establish a sophisticated technological framework that transforms the general mandate of Section 40C into a functional monitoring system. Rule 150 ZQT mandates monitoring through intelligent video surveillance and video The Video Analytics Rules (“Rules”) establish a precisely defined scope of application that operationalizes the board authority granted under Section 40C. The Rules apply specifically to \"specified goods\" as defined in Rule 150 ZQR , encompassing goods listed in the Third Schedule to the Act of 1990 and any other goods subsequently notified by the FBR through specific orders. The Rules mandate that no person engaged in manufacturing specified goods shall remove production from business premises without undergoing the process of intelligent video surveillance, creating a statutory prohibition that carries significant legal consequences for non-compliance. The Rules establish a sophisticated technological framework that transforms the general mandate of Section 40C into a functional monitoring system. Rule 150 ZQT mandates monitoring through intelligent video surveillance and video analytics using approved equipment including video cameras, sensors, and related apparatus. The system requirements, as detailed in Rules 150 ZQX and 150 ZQY , encompass high-definition video capture, object detection and counting capabilities, weighing functionality for bagged products, real-time data transmission to the Central Control Room (CCR), automated alarm generation for unauthorized production stoppages, and comprehensive data storage architectures with both local (60-day) and central (5-year) retention capabilities. This technological specification represents a deliberate implementation of the \"electronic or other means\" contemplated by Section 40C, creating an integrated system that provides the FBR with unprecedented real-time visibility into production activities while establishing clear technical standards for system implementation and operation.
Section 50 of the Act of 1990 grants the FBR the power to “make rules for carrying out the purposes of this Act.” This is the general enabling provision for delegated legislation. More specifically, Section 40C of the Act of 1990 provides the particularized delegation for electronic monitoring, authoring the Board to “specify any registered person or class of registered persons or any good or class of goods” for monitoring through electronic means. Thus, the legal architecture is clear: Parliament (via Sections 50 and 40C) delegates the authority to the FBR. Similarly, section (8) of the Act of 2007 envisages that the FBR subject to certain conditions may delegate any of its functions and powers to any Government agency, Chairman or any member duly appointed under the Act. The FBR (via SRO 889(I)/2020) exercises that delegated power. In this regard, the worthy counsel representing the FBR has provided notification No.C.No.6(96)S(BIC)/Admn/2020 /23382-R, dated 16.02.2021. According to the said notification, the power of framing Rules under section 50(1) has been delegated to the Member Inland Revenue (Policy). The worthy counsel for the Revenue has also provided all the relevant record through detailed comments, showing that the proposed structure of installation of IP CCTV camera has been placed before the Member (Operations), who is the competent authority (delegated authority) under notification dated 16.02.2021 to issue the said directive. Nevertheless, such delegation does not amount to the essential legislative function of the Parliament; rather, it constitutes ancillary/incidental functions relating to the machinery provisions of a taxing statute, and therefore, does not fall within the prohibited field of delegation. This was very aptly observed by the apex Court in the case of Messrs Sh. Abdur Rahim, Allah Ditta vs. Federation of Pakistan and others (PLD 1988 SC 670) in the following terms:
“What is prohibited by the Legislature is the delegation of its function to make the law; but not the authority exercised under and in pursuance of eth law itself to another agency in regard to the provision of details when by the very nature these are incapable of being laid down by the legislature itself.”
150 ZQR. Application.- The provisions of this Chapter shall apply to video surveillance for electronic monitoring of production on real time basis, hereinafter referred to as the specified goods meant, namely:- (a) goods specified in Third Schedule appended to the Sales Tax Act, 1990; or
(b) any other goods notified by the Board through a specific order:
Provided that for any or all of the goods specified above shall be monitored through video surveillance and video analytics from the date as notified by the Board through a specific order.
. 150 ZQT. Goods to be monitored electronically through video cameras etc- (1) Production of specified goods, manufactured in Pakistan, shall be monitored through intelligent video surveillance, and video analytics by installation of equipments including video cameras, sensors, etc., at production lines, as are approved by the Board for,-
(a) real time collection of data that shows production through object detection and object counting;
(b) transmission of data to central control room at FBR on real time basis, storage and archiving of data;
(c) detection of unexpected stops;
(d) quantitative analyses of productions; and
(e) data analytics for required legal actions.
(2) No person engaged in manufacturing of specified goods shall remove the production from its business premises unless it has undergone the process of intelligent video surveillance.
. 150 ZQX. Criteria for grant of an authorization.- (1) The vendor shall be required to have and demonstrate ability to provide equipment with high security and efficiency for electronic monitoring of production and video analytics on real time basis.
(2) The equipment offered by the vendor must have the following features, namely:-
(a) the equipment shall have high definition video camera and sensor that can record and count the production;
(b) the equipment shall have ability to weigh the product contained in bags;
(c) the equipment shall have ability to integrate with the software recommended by FBR which will be used for transmission of data to central control room;
(d) the equipment will conduct video analytics and communicate results thereof to CCR;
(e) the equipment will report any unauthorized stoppages production through generation of appropriate alarm;
(f) the system should have sixty days remotely retrievable local, on-site, and at place, specified by the Board, off-site, data storage at each site;
(g) the CCR should have a central data storage capacity capable of storing and retrieving data on long term basis up to five years; and
(h) the equipment must be stable, fault-tolerant, secure and accessible only by username and password as authorized by the Board.
. 150 ZQY. Functions and responsibilities of IT team of FBR.-(1) IT team shall develop a software to run and operate the system, as per requirements of the Board. The equipment provided by the vendor after integration with FBR software shall be able to perform the following functions, namely:-
(a) monitoring capability on real-time basis at factory premises or production lines;
(b) the ability to configure the production unit remotely;
(c) the system must be capable of sending alert messages and trigger alarms, visible and audible, in case of occurrence of abnormal events such as unauthorized stoppages of production, tempering with equipments and camera etc;
(d) the system reporting should be capable to filter and process the production data for statistical and analytical purposes; and
(e) the system should ensure secure data storage and archiving of data for five years from its generation or recording;
(2) The team shall submit a complete list of operations, software and maintenance required to operate the equipment.