The rates of income tax on sales to distributors during tax year 2022 to be applicable under Second Schedule of Income Tax Ordinance, 2001.
The Federal Board of Revenue (FBR) issued the Income Tax Ordinance, 2001 updated up to June 30, 2021. The Ordinance incorporated amendments brought through Finance Act, 2021.
Following are the rates on sales to distributors that shall be applicable during tax year 2022 under Section 236G:
The rate of collection of tax under section 236G shall be as set out in the following table namely:-
TABLE
| S.No. | Category of Sale | Rate of Tax |
| (1) | (2) | (3) |
| 1. | Fertilizers | 0.7% |
| 2. | Other than Fertilizers | 0.1% |
Provided that the rate of advance tax on sale to distributors, dealers or wholesalers of fertilizer shall be 0.25%, if they are already appearing on both the Active Taxpayers’ Lists issued under the provisions of the Sales Tax Act, 1990 and the Income Tax Ordinance, 2001 (XLIX of 2001).
236G. Advance tax on sales to distributors, dealers and wholesalers.— (1) Every manufacturer or commercial importer of pharmaceuticals, poultry and animal feed, edible oil and ghee, auto-parts, tyres, varnishes, chemicals, cosmetics, IT equipment, electronics, sugar, cement, iron and steel products, fertilizer, motorcycles, pesticides, cigarettes, glass, textile, beverages, paint or foam sector, at the time of sale to distributors, dealers and wholesalers, shall collect advance tax at the rate specified in Division XIV of Part IV of the First Schedule, from the aforesaid person to whom such sales have been made.
Advance tax on sale to distributors, dealers or wholesalers.
The rate of collection of tax under section 236G shall be as set out in the following table namely:-
TABLE
| S.No. | Category of Sale | Rate of Tax |
| (1) | (2) | (3) |
| 1. | Fertilizers | 0.7% |
| 2. | Other than Fertilizers | 0.1% |
(2) Credit for tax collected under sub-section (1) shall be allowed in computing the tax due by the distributor, dealer or wholesaler on the taxable income for the tax year in which the tax was collected.
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