08-15-2011, 01:46 AM
Dear Mr. Khurram Shaikh Sb!!!
Please Note that
All the companies register under Large Tax Unit -LTU are with holding agent and required to deduct the with holding tax @ 1 % of taxable supplies made by the suppliers who registered under Regional Tax Office - RTO.
FOR FURTHER INFORMATION
I refer to Sales Tax Withholding Rules, 2007 as amended by the SRO 603(I)/2009, SRO704(I)/2009, SRO719(I)/2009 and SRO846(I)/2009, we would like to elaborate sales tax withholding procedures as follows;
A - Sales tax withholding on supplies received from person who is registered in RTO
In this regard, we would like to inform you that in compliance of the said Rules, the company is required to withheld 1% of the value of the supply as sales tax withholding amount on supplies of goods (services are not included in this case) made to the company by its suppliers who are registered in RTO.
However, we would like to inform you that the company is not required to withheld sales tax from payment made to its suppliers (whether registered in RTO or not) who are engaged in following business activity, namely;
(i) Electrical energy;
(ii) Natural gas;
(iii) Petroleum products as supplied by petroleum production and
exploration companies, oil refineries and
oil marketing companies;
(iv) Mild steel products;
(iv) Products made from sheets of iron or non-steel alloy, stainless
steel or other alloy steel, such as pipes,
admirals, trunks etc.
(v) Paper, in rolls or sheets;
(vii) Plastic products including pipes;
(viii)Vegetable ghee and cooking oil; and
(ix) Telecommunication services.
B - Sales tax withholding against Advertisement Services
In his connection, we would like to inform you that the company is required to deduct the whole amount of sales tax (i.e. 16%) as shown on the invoice issued by the âAdvertisement Services Providerâ [detail of services which construed as Advertisement is enumerated below] to the bank. However, if the âAdvertisement Services Providerâ is unregistered person, the company is required to deduct the amount of sales tax as per the following formula, namely;
[16 * value of the services shown in the bill ] / 116
List of Advertisement Services
Advertisement services means
1- Broadcast or telecast by radio or TV stations based in Pakistan
2- Booked in Pakistan for broadcasting or telecasting on TV or radio
stations base abroad, whether or not
possessing landing rights in Pakistan
3- Transmitted on closed circuit TV or cable TV network
4- Advertisement on TV
5- Advertisement on Radio
6- Advertisement on CCTV
7- Advertisement on Hoarding Boards, Pole Signs and Sign Boards.
8- Advertisement on Cable T.V Network
C - Time of deduction of such amount of tax
It is to clarify that the company is required to deduct sales tax at the time of making payment to its suppliers subject to Section 73 of the Act [as per section 73 of the Act, it is required that every person shall make payment to its suppliers through banking channels and within the period of six month from the date of invoice].
D - Time of deposit of such amount into government treasury
In this connection, we would like to inform you that the company should deposit such amount into government treasury by 15th of following month to the month in which payment has been made to its suppliers by the bank.
E - Time on which such withholding amount should be declared in the monthly return
In this regards, we advise you that while filing sales tax cum federal excise return for such month, in which deduction has been made, the company should declared such withholding tax amount in the relevant column of Annexure-A of monthly return.
F - Time of claiming input tax against invoices of such suppliers
We inform you that the company may claim input tax against these invoices as usual are being claimed by the company in term of Section 7, 8, 8A, 23 and 73 of the Act.
Plz feel free to contact in case of any ambiguity / clarification, should you so desire.
Regards,
Umar
<blockquote id="quote"><font size="1" face="Verdana, Arial, Helvetica, san" id="quote">quote<hr height="1" noshade id="quote"><i>Originally posted by khurramsheikh1983</i>
<br />THKS FOR YOUR INFORMATION ABOUT THE WITHHOLDING TAX.
BUT I WANT TO ASK THE LIMITATION OF WITHHOLDING AGENT AND
SECONDLY WILL WITHHOLDING AGENT DEDUCT WITHHOLDING TAX ON PURCHASE OR SALE ? PLS TELL ME IN DETAIL
PLS REPLY ME ASAP
KHURRAM SHEIKH
<hr height="1" noshade id="quote"></font id="quote"></blockquote id="quote">
Please Note that
All the companies register under Large Tax Unit -LTU are with holding agent and required to deduct the with holding tax @ 1 % of taxable supplies made by the suppliers who registered under Regional Tax Office - RTO.
FOR FURTHER INFORMATION
I refer to Sales Tax Withholding Rules, 2007 as amended by the SRO 603(I)/2009, SRO704(I)/2009, SRO719(I)/2009 and SRO846(I)/2009, we would like to elaborate sales tax withholding procedures as follows;
A - Sales tax withholding on supplies received from person who is registered in RTO
In this regard, we would like to inform you that in compliance of the said Rules, the company is required to withheld 1% of the value of the supply as sales tax withholding amount on supplies of goods (services are not included in this case) made to the company by its suppliers who are registered in RTO.
However, we would like to inform you that the company is not required to withheld sales tax from payment made to its suppliers (whether registered in RTO or not) who are engaged in following business activity, namely;
(i) Electrical energy;
(ii) Natural gas;
(iii) Petroleum products as supplied by petroleum production and
exploration companies, oil refineries and
oil marketing companies;
(iv) Mild steel products;
(iv) Products made from sheets of iron or non-steel alloy, stainless
steel or other alloy steel, such as pipes,
admirals, trunks etc.
(v) Paper, in rolls or sheets;
(vii) Plastic products including pipes;
(viii)Vegetable ghee and cooking oil; and
(ix) Telecommunication services.
B - Sales tax withholding against Advertisement Services
In his connection, we would like to inform you that the company is required to deduct the whole amount of sales tax (i.e. 16%) as shown on the invoice issued by the âAdvertisement Services Providerâ [detail of services which construed as Advertisement is enumerated below] to the bank. However, if the âAdvertisement Services Providerâ is unregistered person, the company is required to deduct the amount of sales tax as per the following formula, namely;
[16 * value of the services shown in the bill ] / 116
List of Advertisement Services
Advertisement services means
1- Broadcast or telecast by radio or TV stations based in Pakistan
2- Booked in Pakistan for broadcasting or telecasting on TV or radio
stations base abroad, whether or not
possessing landing rights in Pakistan
3- Transmitted on closed circuit TV or cable TV network
4- Advertisement on TV
5- Advertisement on Radio
6- Advertisement on CCTV
7- Advertisement on Hoarding Boards, Pole Signs and Sign Boards.
8- Advertisement on Cable T.V Network
C - Time of deduction of such amount of tax
It is to clarify that the company is required to deduct sales tax at the time of making payment to its suppliers subject to Section 73 of the Act [as per section 73 of the Act, it is required that every person shall make payment to its suppliers through banking channels and within the period of six month from the date of invoice].
D - Time of deposit of such amount into government treasury
In this connection, we would like to inform you that the company should deposit such amount into government treasury by 15th of following month to the month in which payment has been made to its suppliers by the bank.
E - Time on which such withholding amount should be declared in the monthly return
In this regards, we advise you that while filing sales tax cum federal excise return for such month, in which deduction has been made, the company should declared such withholding tax amount in the relevant column of Annexure-A of monthly return.
F - Time of claiming input tax against invoices of such suppliers
We inform you that the company may claim input tax against these invoices as usual are being claimed by the company in term of Section 7, 8, 8A, 23 and 73 of the Act.
Plz feel free to contact in case of any ambiguity / clarification, should you so desire.
Regards,
Umar
<blockquote id="quote"><font size="1" face="Verdana, Arial, Helvetica, san" id="quote">quote<hr height="1" noshade id="quote"><i>Originally posted by khurramsheikh1983</i>
<br />THKS FOR YOUR INFORMATION ABOUT THE WITHHOLDING TAX.
BUT I WANT TO ASK THE LIMITATION OF WITHHOLDING AGENT AND
SECONDLY WILL WITHHOLDING AGENT DEDUCT WITHHOLDING TAX ON PURCHASE OR SALE ? PLS TELL ME IN DETAIL
PLS REPLY ME ASAP
KHURRAM SHEIKH
<hr height="1" noshade id="quote"></font id="quote"></blockquote id="quote">
