Whatsapp

" LETTER FROM   LETTER FROM   MUHAMMAD AYUB & CO., ADVOCATES   AND LEGAL ADVISORS, KARACHI   TO   MEMBER (DIRECT TAX),   FEDERAL BOARD OF REVENUE   (Re: Recovery of income tax under section 235, Income Tax Ordinance, 2001)   The Member (Direct Tax),   Federal Board of Revenue,   Government of Pakistan   Constitution Avenue, Islamabad   SUBJECT: RECOVERY OF INCOME TAX UNDER SECTION 235, INCOME TAX ORDINANCE, 2001   Dear Sir,   Our one client is an old taxpayer who is, by status an individual, exclusively a supplier and exporter of plastic goods after manufacturing thereof. The ratio of supply and export is about 80 and 20 per cent of the total sales; both the transactions are subject to 100% WHT which was in terms of final discharge of tax liability till tax year 2009. For and from tax year 2010 the legal position has been changed.   2. The taxpayer is also paying income tax on telephone bills, cell-phone cards, cash withdrawal (bank), and commercial/industrial electricity bills. It is pertinent to mention here that the taxpayer is paying monthly electricity (single meter) bill exceeding Rs.80,000 - this amount sometime goes upward exceeding one lac resulting in levy of income tax to a great extent. In case, any taxpayer/manufacturer got two or more electricity meters installed, the volume of income tax payment will be about one million or more in a year.   3. In short, the taxpayer discharges tax liability forthwith on import of raw materials (for self-manufacturing), supplies, and exports being the minimum tax liability, and again he suffers from levy of income tax on telephone/cell-phone cards, electricity bills, cash withdrawal (from bank) etc. In fact the taxpayer has been facing a…