S. Tax (Withholding)

Question 1

Sales tax special procedure withholding rules - Applicability

Import

Sales

Exceptions

Answer 1

Not applicable on imports. Applicable only on sales.

Applicable on goods supplied by all above registered persons except following goods:
(a) Goods specified in 3rd Schedule
(b) Supplies made by commercial importer who paid value addition tax on such goods at the time of import
(c) Supplies made by active taxpayer as defined in the Sales Tax Act, 1990 to another registered person with the exception of advertisement services subject to Islamabad Capital Territory Sales Tax.
(d) electrical energy, natural gas, vegetable ghee and cooking oil, petroleum products by OMC, telecommunication services,
(e) Ships breakers, steel melters, re-rollers paying sales tax under chp xi of special procedure rules
Note: WHT not applicable if supply made by registered person. Tax will be withheld @ 1% of value in case of supplies by non-registered person in all above cases.

Question 2

Withholding agents

Answer 2

(a) Company as per ITO, 2001 and registered for Income, sales or federal excise tax
(b) person registered as exporter
(c) Recipient of advertisement services
(d) Autonomous bodies, federal and provincial government, public sector org.

Question 3

Purchases from registered person (other than active tax payer)

Answer 3

Dealer, distributor, wholesaler 1/10 (10%)

Other than above 1/5(Normally manufacturer) (20%)

Recipient of advertisement services - full amount of sales tax

Question 4

Purchases from Non-registered

Answer 4

By Federal/provincial govt, autonomous body- Fully amount of sales tax calculated at tax fraction (17/117) from persons liable to be registered but not actually registered.

Other withholding agents: 1% of value of goods from only those liable to be registered including third schedule items