S.R.O. 660(I)/2007, Islamabad, the 30th June, 2007

SROS: S.R.O. 660(I)/2007, Islamabad, the 30th June, 2007 SALES TAX SPECIAL PROCEDURE(WITHHOLDING) RULES, 2007 S.R.O. 660(I)/2007, Islamabad, the 30th June, 2007:- In exercise of the powers conferred by sub-section(6) and sub-section(7) of section 3 of the Sales Tax Act, 1990, read with section 71 thereof, the Federal Government is pleased to make the following rules, namely: 1. Short title, application and commencement.-(1) These rules may be called the Sales Tax Special Procedure(Withholding) Rules, 2007. (2) They shall apply to all taxable goods and services as are supplied by a supplier to the Government departments, autonomous bodies and public sector organizations, hereinafter referred to as withholding agents. (3) They shall come into force on the 1st day of July, 2007. 2. Responsibility of a withholding agent.(1) The withholding agent, intending to make purchases of taxable goods, shall indicate in an advertisement or notice for this purpose that the sales tax to the extent as provided in these rules shall be deducted from the payment to be made to the supplier. (2) A withholding agent shall deduct an amount equal to one fifth of the total sales tax shown in the sales tax invoice issued by the supplier and make payment of the balance amount to him as per illustration given below,-- ILLUSTRATION: Value of taxable supplies excluding sales tax Rs. 100 Sales tax chargeable @ 15% Rs. 15 Sales tax deductible by the withholding agent Rs. 3(i.e. Rs. 15 5) Sales tax payable by the withholding to the supplier Rs. 12(i.e. Rs. 15 - Rs. 3) Balance amount payable to the supplier by the withholding agent Rs. 112 (Rs. 100 + Rs. 12); (3) All withholding agents shall make purchases of taxable goods from a person duly registered under the Sales Tax Act, 1990, provided that under unavoidable circumstances and for reasons to be recorded in writing, purchases are made from unregistered persons, the withholding agent shall deduct sales tax at 15% of the value of taxable supplies made to him from the payment due to the supplier. (4) The sales tax so deducted shall be deposited by the withholding agent in the designated branch of National Bank of Pakistan under Head of Account…