FBR issues new withholding sales tax rates on supplies

FBR issues new withholding sales tax rates on supplies

ISLAMABAD: Federal Board of Revenue (FBR) has announced new rates of withholding sales tax after abolishing Sales Tax Special Procedure (Withholding) Rules, 2007.

The FBR said that as Sales Tax Special Procedure (Withholding) Rules, 2007, have been rescinded, the rates of withholding and exclusions for the same have been provided in newly inserted Eleventh Schedule, as provided in amended section 3(7) of Sales Tax Act, 1990, effective from July 01, 2019, as under:

Table

S.No.Withholding agentSupplier categoryRate or extent of deduction
(1)(2)(3)(4)
1(a) Federal and provincial government departments; autonomous bodies; and public sector organizations

 

(b) Companies as defined in the Income

Tax Ordinance, 2001 (XLIX of 2001)

Registered personsl/5th of Sales Tax as shown on invoice
2(a) Federal and provincial government departments; autonomous bodies; and public sector organizations

 

(b) Companies as defined in the Income

Tax Ordinance, 2001 (XLIX of 2001)

Person registered as a wholesaler, dealer or distributor1/10th of Sales Tax as shown on invoice
3Federal and provincial government departments; autonomous bodies; and public sector organizationsUnregistered personsWhole of the tax involved or as applicable to

 

supplies on the basis of gross value of supplies

4Companies as defined in the Income Tax Ordinance, 2001 (XLIX of 2001)Unregistered persons5% of gross value of supplies
5Registered persons as recipient of advertisement servicesPerson providing advertisement servicesWhole of sales tax applicable
6Registered persons purchasing cane molasses.Unregistered personsWhole of sales tax applicable

The rates for withholding or deduction by the withholding agent shall not be applicable on following goods and supplies:

(i) Electrical energy;

(ii) Natural gas;

(iii) Petroleum products as supplied by petroleum production and exploration companies, oil refineries, oil marketing companies and dealers of motor spirit and high speed diesel;

(iv) Vegetable ghee and cooking oil;

(v) Telecommunication services;

(vi) Goods specified in the Third Schedule to the Sales Tax Act, 1990;

(vii) Supplies made by importers who paid value addition tax on such goods at the time of import; and

(viii)  Supplies made by an Active Taxpayer as defined in the Sales Tax Act, 1990 to another registered persons with exception of advertisement services.

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