Income Tax Exemption Certificate

[nadeem4u]

We are a importer cum manufacturer and having status of AOP and supplies to multinational companies and huge amount of income tax has been deducted through out the year, can we apply for income tax exemption certificate.
please also tell us relevant provision under the income tax ordinance.

Regards
Imran Liaquat

[LapTop]

<b>153. Payments for goods and services.- </b>

(1) Every prescribed person making a payment in full or part including a payment by way of advance to a resident person or permanent establishment in Pakistan of a non-resident person -

(a) for the sale of goods;
(b) for the rendering of 1[or providing of] 2[ ] services;
(c) on the execution of a contract, other than a contract for the sale of goods or the rendering of or providing of services,

shall, at the time of making the payment, deduct tax from the gross amount payable at the rate specified in Division III of Part III of the First Schedule.


(5) Sub-section (1) shall not apply to –
(a) a sale of goods where –
(i) the sale is made by the importer of the goods;
(ii) the importer has paid tax under section 148 in respect of the goods; and
(iii) the goods are sold in the same condition they were in when imported;

[Sheraz Ahmad]

<blockquote id="quote"><font size="1" face="Verdana, Arial, Helvetica, san" id="quote">quote<hr height="1" noshade id="quote"><i>Originally posted by nadeem4u</i>
<br />We are a importer cum manufacturer and having status of AOP and supplies to multinational companies and huge amount of income tax has been deducted through out the year, can we apply for income tax exemption certificate.
please also tell us relevant provision under the income tax ordinance.

Regards
Imran Liaquat
<hr height="1" noshade id="quote"></font id="quote"></blockquote id="quote"><b>Agar aap Importer hain tou Goods Purchased k doran Bill of Entry ki through Income Tax at Import Stage zaroor pay kiya hoga.
Ab Jab aap yeh Taxable Goods Sell karaingay tou 1 Undertaking Selling Party ko Invoice k saath submit karaingay.Jis may yeh mention hoga k yeh Goods hum nay Import ki hain aur wahan hum Import Tax u/s 148 deposit kar chukay hain is liye mazeed tax u/s 153 hamara na kata jay.
I shall feel pleasure to submit you the related draft if u want.
Thanks </b>

[awaisaftab]

It is very easy for importer to get exemption certificate from Income Tax Comissioner. Under section 159 of Income Tax Ordinance and Under Rule 40 of Income Tax Rules,2002 you may apply for the issuance of exemption certificate on prescribed application form. The application form for grant of exemption certificate is provided in income tax rules see Part VII of First Shedule of Income Tax Rules,2002.

[Omeir]

I have come to know that an importer can only give an undertaking u/s 49 if the profit margin is 12% or less. Otherwise you cannot supply on a profit margin of more than 12%.

[Omeir]

Sorry I had clicked submit before i could finish.
What i wish to know is that i find it absurd that i cannot sell on a margin greater than 12%.
This i can accept that if i supply at a greater margin then i have to pay more tax.

Please can anyone refer me to the exact law.

[awaisaftab]

<blockquote id="quote"><font size="1" face="Verdana, Arial, Helvetica, san" id="quote">quote<hr height="1" noshade id="quote"><i>Originally posted by Omeir</i>
<br />I have come to know that an importer can only give an undertaking u/s 49 if the profit margin is 12% or less. Otherwise you cannot supply on a profit margin of more than 12%.
<hr height="1" noshade id="quote"></font id="quote"></blockquote id="quote">
Omeir
Section 49 is relating to the income of Federal,Provincial and Local Government. Give exact reference.

[Omeir]

Dear Awais,

Sorry i meant u/s 148.
The scenario is such that i am a commercial importer and pay advance income tax at import stage u/s 148, hence when i supply i give an undertaking that my 3.5% tax u/s 153 should not be deducted as paid u/s 148. Now i have come to know that i can only give an undertaking when i have supplied with 12% profit or less; otherwise i cannot supply.

I need clarification for this.

[Farhan2009]

In light of <i><b>SRO Notification No_ S_R_O_ 97(I)-2002, dated 12th February, 2002_(IT) and Circular No_ 05 of 2002 (IT)</b></i> a Commercial Importer doest not need any Exemption Certificate from Tax Authorities. You jsut issue a Undertaking that comapny/AOP has paid advance tax at import stage and supply theses goods without value addition.
Regards
Farhan

[Omeir]

any reply to the issue of 12% raised on 27th march.

[Anfal Shabbir]

nadeem
u cant get exemption certificate on status of AOP, U have to convert your status to company for obtaining exemption certificate

Best Regards

Anfal Shabbir

[zuhaib.muneer]

Assalam o Alaikum I need some help about the exemption certificate of Income Tax U/S 153(1)b, because our customers deduct a huge amount of tax at the time of payment @ 3.5% so i want to get the exemption certificate for saving this tax deduction at source. ( my status is Private Limited). plzzz help me out and tell me the procedure of getting the exemption certificate

[olympia]

snd them a request for getting the income tax certificate for the year 2009 - 2010. They are liable to issue U tax Certificate.

[ranaok]

Dear All,

We are selling Telecom and satellite services to different government and enterprises, They deduct at source 6% in normal condition and after flood this is 6.95%, We usually work only on 3-5% of profit margin, And this amount is quite huge.

One of our competitor has produced a tax exemption certificate to the customer, Please advise how to get a Tax exemtion certificate for a private limited company.

[yaseen]

With reference to below question posted on dated 9 March 2010. I want to ask that if I am
1.importer cum exporter
the reply will be same as of below question or different.

Originally posted by nadeem4u

We are a importer cum manufacturer and having status of AOP and supplies to multinational companies and huge amount of income tax has been deducted through out the year, can we apply for income tax exemption certificate.
please also tell us relevant provision under the income tax ordinance.

Regards
Imran Liaquat