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The FBR said that as Sales Tax Special Procedure (Withholding) Rules, 2007, have been rescinded, the rates of withholding and exclusions for the same have been provided in newly inserted Eleventh Schedule, as provided in amended section 3(7) of Sales Tax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 agent Supplier category Rate 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 persons l/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 distributor 1/10th of Sales Tax as shown on invoice
3 Federal and provincial government departments; autonomous bodies; and public sector organizations Unregistered persons Whole of the tax involved or as applicable to

supplies on the basis of gross value of supplies

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