Law: Sales Tax Act, 1990

Section: 11

Law: Sales Tax Special Procedure (Withholding) Rules, 2007

Section: 2

Sales Tax Act (VII of 1990)---S.11---Sales Tax Special Procedure (Withholding) Rules, 2007, R.2---SRO No.897(I)/2013, dated, 4-10-2013---Assessment of tax and recovery of tax nor levied or short levied or erroneously refunded--- Responsibility of withholding agent---Scope---Appellant assailed order passed by department whereby it was ordered to pay short-levied amount of withholding tax---Contention of appellant was that Commissioner (Appeals) erred by levying withholding tax at the rate of 17% instead of 1%---Validity---Appellant was a withholding agent by virtue of SRO No. 897(I)/2013, dated, 4-10-2013---Before issuance of said SRO, the rate of withholding tax was 17% and from 4-10-2013 the withholding rate was 1%---Appellant was required to withhold the tax at the rate of 17% before 4-10-2013 and after 4-10-2013 withholding tax was reduced to 1%, in case of unregistered person---Impugned order did not require interference---Appeal was disposed of accordingly. ORDER MRS. AMBREEN ASLAM, JUDICIAL MEMBER:---.--- Through this order, I intend to dispose off the titled appeal filed by the appellant/taxpayer against the Order bearing No.32/2015 dated 30-09-2015, passed by the learned Commissioner Inland Revenue (Appeals-III), Karachi on the following grounds:- “2. That learned Commissioner Inland Revenue (Appeals-III) has erred levying sales tax withholding rate of 17% instead of 1% from the payment to unregistered persons. 3. That withholding sales tax was applicable at the time of payment and not when purchases are made. 4. That retrospective rate of withholding cannot be applied when payment is made. 2. Brief facts of the case as gathered from the record are that the appellant/taxpayer qualifies as “withholding agent” as per clause (d) Rule (2) of Sales Tax Special Procedure (Withholding) Rules, 2007 since it a “registered as company and is liable to withhold sales tax on specified rate. As per data available in FBR e-portal, declared by the appellant/taxpayer for the tax periods July, 2013 to June, 2014 was scrutinized, it was revealed that the appellant/taxpayer made purchases against the unregistered persons, but failed to deduct and deposit full amount of…

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