Changes in rates of withholding tax on sales to retailers, wholesalers, distributors

Withholding-Tax-FBR

Federal Board of Revenue (FBR) issued changes in withholding tax rates on sales made. Sales made by manufacturers to retailers, wholesalers and distributors during the tax year 2021. New rates implemented through Finance Act 2020.

Under section 236G

Under section 236G of the Income Tax Ordinance 2001. Every manufacture or commercial importer of electronics sugar, cement, iron and steel products, fertilizers, motorcycles, pesticides, cigarettes glass, textile, beverages, paint or foam sector shall collect/deduct withholding tax from distributor, wholesaler and dealer at the time of sale.

Deduction of advance tax from wholesaler, distributor and dealers will be at the time of sales.

In case of sales of fertilizers the withholding tax rate shall be 0.7 percent of gross amount. The tax rate will be double in case taxpayers are in-active in FBR.

Other than fertilizers the tax rate shall be 0.1 percent of gross amount. The tax rate shall be 0.2 percent of gross amount if taxpayer is inactive in FBR.

The tax deducted or withheld under this section shall be adjustable.

Under Section 236H

Under Section 236H of the Income Tax Ordinance 2001, every manufacture ,distributor, dealer, wholesaler or commercial importer. Of electronics, sugar, cement, iron & steel products, motorcycles, pesticides, Cigarettes glass, textile, beverages, paint or foam sector shall withheld from every retailer at the sale time.

Withheld tax from retailers at the time of sales made to them:

In case of sale of electronics the withholding tax rate shall be 1 percent of the gross amount. The rate shall be 2 percent of gross amount if taxpayer are inactive.

The withholding tax rate under this section for others shall be 0.5 percent of gross amount. The rate shall be 1 percent in case persons are not on the ATL.

The tax withheld under this section shall be adjustable.

Under Section 236HA

Under Section 236HA of the Income Tax Ordinance 2001. Every person selling petroleum products shall collect/deduct withholding tax from every petrol pump operator or distributor. Where such operator or distributor not allowed a commission or discount at the time of sale.

Advance tax to collect on ex-depot sale price of such petroleum products at the rate of 0.5 percent. The rate shall be 1 percent of ex-depot sale price.

The withholding tax withheld under this section shall be final.

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RELATED STORIES

-Finance Act 2020 | FBR Budget Salient Features | Tax Year 2021 |

-FBR’s New Tax Regime For Imported Items. Through Twelfth Schedule

-Withholding tax rates on sales made to retailers, wholesalers, distributors

 

WITHHOLDING TAX RATES CARD OF FBR – DOWNLOAD

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