Tax rates on sales to retailers during TY 2022

Tax rates on sales to retailers during TY 2022

The rates of income tax on sales to retailers 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 236H:

The rate of collection of tax under section 236H on the gross amount of sales shall be 0.5%.

Following is the text of Section 236H of Income Tax Ordinance, 2001:

236H. Advance tax on sales to retailers.— (1) Every manufacturer, distributor, dealer, wholesaler 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, motorcycles, pesticides, cigarettes, glass, textile, beverages, paint or foam sector, at the time of sale to retailers“, and every distributor or dealer to another wholesaler in respect of the said sectors”, shall collect advance tax at the rate specified in Division XV of Part IV of the First Schedule, from the aforesaid person to whom such sales have been made.

(2) Credit for the tax collected under sub-section (1) shall be allowed in computing the tax due by the retailer on the taxable income for the tax year in which the tax was collected.

(Disclaimer: The text of the above section is only for information. Team makes all efforts to provide the correct version of the text. However, the team is not responsible for any error or omission.)

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