04-01-2005, 03:02 PM
Aslam O Aliakum,
thanx for ur kind advice.
my question was relating to the use of words 'sale of goods' in the said section.
for deduction of tax at source the deducting agent will be purchasing any goods or services.
Now with reference to the 'Sale of goods' any person making a sales is making a taxable activity, whether or not he is actually filing an income tax return.
As the deducting agent will have to deduct the tax of the person from whom he has received goods or services exceeding prescribed limits. the tax status of the seller is not important, unless he has obtain a tax exemption certificate.one of my friend quoted the case law of the Prime diary milk in which the court has decided that the company will have to deduct the tax at source from the payments it made to the milkmen, where the company's argument was the same that the seller is not in the tax net hence his tax should not be deducted (hence not making a taxable sale).
Moreover he has also refer me the SRO (Number i could not recall at the moment but i found it in the PBP text book ) of 1991 in which the financial limit of supply and services are define and certain transactions are exempted from deduction of tax at source in which the hotels and restaurants also falls.
Hope this will help me getting more help from my fellow members. I do need a lot of help and luck as i m sitting in Module F exams for my first attempt.
Regards
Zahid
thanx for ur kind advice.
my question was relating to the use of words 'sale of goods' in the said section.
for deduction of tax at source the deducting agent will be purchasing any goods or services.
Now with reference to the 'Sale of goods' any person making a sales is making a taxable activity, whether or not he is actually filing an income tax return.
As the deducting agent will have to deduct the tax of the person from whom he has received goods or services exceeding prescribed limits. the tax status of the seller is not important, unless he has obtain a tax exemption certificate.one of my friend quoted the case law of the Prime diary milk in which the court has decided that the company will have to deduct the tax at source from the payments it made to the milkmen, where the company's argument was the same that the seller is not in the tax net hence his tax should not be deducted (hence not making a taxable sale).
Moreover he has also refer me the SRO (Number i could not recall at the moment but i found it in the PBP text book ) of 1991 in which the financial limit of supply and services are define and certain transactions are exempted from deduction of tax at source in which the hotels and restaurants also falls.
Hope this will help me getting more help from my fellow members. I do need a lot of help and luck as i m sitting in Module F exams for my first attempt.
Regards
Zahid
