Online market places to require collect sales tax

Online market places to require collect sales tax

ISLAMABAD: As per proposed laws in Sales Tax Act, 1990 persons running online market place will require to collect sales tax whether goods owned by them or not, sources in Federal Board of Revenue (FBR) said on Monday.

The Finance Bill, 2021 proposed to insert clause 3(1)(c) to Sales Tax Act, 1990 requiring the person running online market place to charge sales tax on the value of supply of goods through that online market place, whether the goods are owned by him or not.

Tax experts at KPMG Taseer Hadi & Co said that Covid-19 has catapulted the universe into adopting truly digital lifestyle and Pakistan has also seen drastic growth in e-Commerce.

As a way forward to clearer taxation policy in this sector, there have been many changes in Pakistani Taxation laws.

The Bill proposes to insert new clause 18A, defining the term “Online marketplace” to include an electronic interface such as a market place, e-commerce platform, portal or similar means which facilitate sale of goods, including third party sale, in any of the following manner, namely:(a) by controlling the terms and conditions of the sale;(b) authorizing the charge to the customers in respect of the payment for the supply; or(c)ordering or delivering the goods.

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