Sales Tax Rules, 2006

CHAPTER-XIV-D

WITHHOLDING OF SALES TAX BY THE RECIPIENT OF SUPPLY

Sales Tax Rules, 2006 CHAPTER-XIV-D WITHHOLDING OF SALES TAX BY THE RECIPIENT OF SUPPLY From: 2025-01-01 - To: 0000-00-00 150ZZI. 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 this Chapter shall be deducted from the payment to be made to the supplier. (2) A withholding agent, other than a recipient of advertisement services, shall deduct an amount as specified in the Eleventh Schedule to the Act and make payment of the balance amount to him as per illustration given below,-- ILLUSTRATION (in case 1/5th of sales tax amount is to be deducted) Value of taxable supplies excluding sales tax Rs. 1000 Sales tax chargeable @ 17% Rs. 170 Sales tax to be deducted by the withholding Agent Rs. 34 (i.e. Rs. 170 - 5) Sales tax payable by the withholding agent to the supplier Rs. 136 (i.e. Rs. 170- Rs.34) Balance amount payable to the supplier by the withholding agent. Rs. 1136 (i.e. Rs. 1000 + Rs.136) Provided that the withholding agent shall not be entitled to reclaim or deduct the amount of tax withheld from such persons as input tax. (3) A person who receives advertisement services, in case the sales tax amount is not indicated on the invoice received, he shall deduct sales tax at the applicable rate of the value of taxable services from the payment due to the service provider. (4) Where the purchases are made by a government department, the following procedure shall be observed, namely:-- (a) the Drawing and Disbursing Officer (DDO) preparing the bill for the accounting office shall indicate the amount of sales tax withheld as illustrated above. The accounting office shall adopt the procedure as indicated below: (i) in case of purchases made by a department under the Federal Government, the office of the Accountant General of Pakistan Revenue shall account for the amount deducted at source during a month under the Head of Account “B02341-Sales Tax” and send an intimation to the Chief Commissioner, Regional Tax Office, Islamabad, by the 15th of the following month; (ii) in case of purchases by…