Goods/Services/Contracts - S153

Question 1

Who is required to deduct (Prescribed persona)

Any businesses which are PP irrespective of their legal status

Answer 1

Almost everyone except

Ind/Aop less than 100m (any preced year)

Businesses which are prescibed persons irrespective of their legal status

• developer
• contractors
• AoP u/law
• exporter
• Consortium/JV

Question 2

Exclsuions from W/H

Answer 2

Payment by Non-PP

Goods - aggregate in FY (Jul-Jun) < 75k

Services - aggregate in FY (Jul-Jun) < 30k

Question 3

What is Execution of Contracts

Answer 3

Hybrid (Goods+Services)

Turnkey Projects

Sports contracts also included

Question 4

What is amount subject to Withholding in case of partial or advance payment

Answer 4

All Payments whether

Full

Partial

Advance

Question 5

What is situation where withholding tax will be collected instead of deduction

Answer 5

When an agent pays to principal after deduction of his charges. Principal shall collect from Agent.

Question 6

How will be tax deduction applied where in an agency relationship agent pays to principal after deduction of his agency comission (like control of paymet is with agent)

Answer 6

When an agent pays to principal after deduction of his charges. Principal shall collect from Agent.

Question 7

What is nute of nature of Taxation or Taxation System for Tax Deducted u/153

Answer 7

NTR - Manufacturer if Co. (whether lsited/unlisted); Trader (Listed Co. which is listed in Pakistanonly) for sales of goods

NTR - Contract execution by Listed Co., which is Listed in Pakistan. Not foreign listed Co.

Rest All MTR, whether Services, Sale of goods, EC

There is no FTR

,

Question 8

What is FTR under S153

Answer 8

Nothing

Question 9

Is Foreign Listed Co. engaged in Trading Business NTR

Answer 9

No, Co. shouldbe listed in Pakistan

Question 10

In which case Services are NTR or FTR

Answer 10

Services are MTR in all cases

Question 11

Inwhich Regimes, a taxpayer (whose tax has been deducted) can apply for W/H exepmtion certificatae

Answer 11

Only when NTR Regime

So

Sale of Goods - Manufacturer Co

Sale of Goods - Trader - Listed Co

EC - Listed Co

Question 12

What are situations where Payer will not deduct withholding Tax

Answer 12

From Commercial importer/other selling goods in same condition (who paid u/148)

Yarn Traders (special taxation)

Security Deposit Refund

Payment to construction contractor in kind by Fed Govt

Purchase of assets under lease/buy back by Modaraba/FI

When SPV makes payment (of recovered receivables) cto originator

Question 13

What is Turnover when determining prescribe persons for Ind/AoP (100 m TO)

Answer 13

Gross sales (incl. ST, FED, Trade disc, comission, etc) including share of AoP.

Question 14

Rates

Answer 14

1. Goods
   
   1. Normal - 4%,4.5%
   2. FMCG-2%,2.5%
2. Service
   
   1. Co -8%
   2. Ind/AoP-10%
3. Contracts
   
   1. Co-7%
   2. Ind/AoP-7.5%
   3. Sports Person-10%

Question 15

What if payer fails to deduct W/H tax while making payment of invoice for local purchases?

Answer 15

Follwoings do not require deduction of WHT, hence allowed;

WH not required to be deducted from Invoice of local goods purchase, hence allowed as expense;

1. Purchases from large import house
2. Purchases from large trade house
3. Purchase of renewable sources of energy goods e.g solar even locally manufactured
4. Payment for food to hotels & restaurants when payment in cash
5. Purchase worth less than 75k in FY
6. Purchase of (food items) unprocessed zinda murghi ya anday from poultry farm/industrial undertaking

Question 16

What if payer fails to deduct W/H tax while making payment of invoice for local services?

Answer 16

Follwoings do not require deduction of WHT, hence allowed;

1. accommodation (or food) or both by hotels and restaurants, if payment in cash.
2. Purchase equal/less than 25k in FY
3. Carriage of goods (karai di gaddi), ek phayra saal wich
4. Insurance premium
5. Claims payment by insurance

Question 17

What if payer fails to deduct W/H tax while making payment of invoice for local contract?

Answer 17

Payment for contract value equal/less than 25k in FY,

Expense is allowed as deduction…..No tension