WHT Manual
WHT Manual
WHT Manual
This manual is intended to act as a single source of useful information on account of transactions subject to
Withholding / Advance Tax under the Income Tax Ordinance, 2001.
This manual contains link to the information available in the Income Tax Ordinance, 2001; the Income Tax Rules,
2002; relevant Notifications and Circulars. The document is subdivided in the following parts:
DISCLAIMER
Although the information contained in this manual is believed to be accurate and updated, while every care has
been taken in compiling this manual, Softax takes no responsibility, makes no representations and gives no
warranties of whatever nature in respect of this manual, including but not limited to the accuracy or
completeness of any information contained therein.
We always depend on your assistance and feedback and request to please inform us if find any mistake or
omission through email at care@softax.com.pk
Page 2 of 166
Contents
WITHHOLDING TAX UNDER INCOME TAX LAW...................................................................................................7
TIME OF DEDUCTION OF TAX.............................................................................................................................7
Section 158 - Time of deduction of tax ......................................................................................................................... 7
Rule 43B - Amount actually paid under section 158 ....................................................................................................... 7
PAYMENT OF TAX COLLECTED OR DEDUCTED ....................................................................................................8
Section 160 - Payment of tax collected or deducted ...................................................................................................... 8
Rule 43 - Payment of tax collected or deducted ............................................................................................................. 8
CERTIFICATE OF COLLECTION OR DEDUCTION OF TAX ........................................................................................9
Section 164 - Certificate of collection or deduction of tax ............................................................................................. 9
Rule 42 - Certificate of collection or deduction of tax.................................................................................................... 9
WITHHOLDING TAX STATEMENT UNDER INCOME TAX LAW ............................................................................. 10
Section 165 - Statements ............................................................................................................................................. 10
Rule 44 - Statement of tax collected or deducted......................................................................................................... 11
RECOVERY OF TAX .......................................................................................................................................... 12
Section 161 - Failure to pay tax collected or deducted ................................................................................................ 12
Section 162 - Recovery of tax from the person from whom tax was not collected or deducted ..................................... 12
Section 163 - Recovery of tax from the person from whom tax was not collected or deducted ..................................... 13
RELEVANT PENALTIES...................................................................................................................................... 14
Section 182 - Offences and penalties .......................................................................................................................... 14
EXEMPTION OR LOWER RATE CERTIFICATE ...................................................................................................... 16
Section 159 - Exemption or lower rate certificate ........................................................................................................ 16
Rule 40 - Exemption or lower rate certificate u/s 159 ................................................................................................. 16
PROVISIONS RELATING TO PERSONS NOT APPEARING IN ACTIVE TAXPAYERS' LIST ........................................... 17
Section 100BA - Special provisions relating to persons not appearing in active taxpayers' list ..................................... 17
RULES FOR PERSONS NOT APPEARING IN THE ACTIVE TAXPAYERS' LIST ................................................................ 17
TRANSACTIONS SUBJECT TO WITHHOLDING TAX UNDER INCOME TAX LAW ..................................................... 20
Section 148 - Imports .................................................................................................................................................. 21
Section 149 - Salary ................................................................................................................................................... 37
Section 5 - Tax on dividends ........................................................................................................................................ 39
Section 150 - Dividends............................................................................................................................................... 39
Section 7B - Tax on profit on debt ............................................................................................................................... 42
Section 151 - Profit on debt ........................................................................................................................................ 43
Section 6 - Tax on certain payments to non-residents ................................................................................................... 48
Section 152 - Payments to non-residents ...................................................................................................................... 49
Section 153 - Payments for goods, services and contracts ........................................................................................... 58
Section 154 - Exports .................................................................................................................................................. 69
Section 154A - Export of Services ............................................................................................................................... 74
Section 155 - [Rent of immoveable] property .............................................................................................................. 76
Page 3 of 166
Section 156 - Prizes and winnings ............................................................................................................................... 78
Section 156A - Petroleum Products.............................................................................................................................. 79
Section 231B - Advance tax on private motor vehicles ................................................................................................ 82
Section 233 - Brokerage and commission .................................................................................................................... 85
Section 234 - Tax on motor vehicles ............................................................................................................................ 89
Section 235 - Electricity consumption ........................................................................................................................... 92
Section 236 - Telephone and internet users .................................................................................................................. 97
Section 236A - Advance tax at the time of sale by auction .......................................................................................... 98
Section 236C - Advance Tax on sale or transfer of immovable property ................................................................... 100
Section 236G - Advance tax on sales to distributors, dealers and wholesalers ........................................................... 104
Section 236H - Advance tax on sales to retailers ....................................................................................................... 104
Section 236I - Collection of advance tax by education institutions ............................................................................. 107
Section 236K - Advance tax on purchase or transfer of immovable property ............................................................. 108
Section 236O - Advance tax under this chapter......................................................................................................... 111
Section 236Q - Payment to residents for use of machinery and equipment ................................................................. 112
THE ELEVENTH SCHEDULE OF THE SALES TAX ACT, 1990 ................................................................................. 117
Table 117
CHAPTER XIV-D OF THE SALES TAX RULES, 2006 ............................................................................................. 119
WITHHOLDING OF SALES TAX BY THE RECIPIENT OF SUPPLY .................................................................................. 119
150ZZH. Application. .............................................................................................................................................. 119
150ZZI. Responsibility of a withholding agent. .................................................................................................... 119
150ZZJ. Responsibility of the registered supplier. ................................................................................................ 120
150ZZK. Responsibility of the Commissioner. ....................................................................................................... 121
SINDH SALES TAX SPECIAL PROCEDURE (WITHHOLDING) RULES, 2014 ............................................................ 122
1. Short title, application and commencement. .......................................................................................... 122
2. Definitions................................................................................................................................................ 123
3. Responsibility of a withholding agent. .................................................................................................... 124
4. Responsibility of the registered service provider. ................................................................................... 127
5. Application of other provisions. .............................................................................................................. 128
6. Forms prescribed for withholding agents................................................................................................ 128
7. Repeal. ..................................................................................................................................................... 128
PUNJAB SALES TAX ON SERVICES (WITHHOLDING) RULES, 2015 ..................................................................... 135
1. Short title and commencement............................................................................................................... 135
2. Definitions................................................................................................................................................ 135
3. Applicability. ............................................................................................................................................ 136
4. Responsibility of a withholding agent. .................................................................................................... 136
5. Withholding from registered service providers....................................................................................... 136
6. Withholding from unregistered person. .................................................................................................. 136
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7. Deduction of tax on advertisement services. .......................................................................................... 136
8. Procedure. ............................................................................................................................................... 137
9. Filing of statement. .................................................................................................................................. 138
10. Provision of information or date. ............................................................................................................ 138
11. Certificate of withholding tax. ................................................................................................................. 138
12. Responsibility of the registered person................................................................................................... 138
13. Deposit of withheld sales tax amounts. .................................................................................................. 139
14. Failure to pay tax withheld or deducted. ................................................................................................ 139
15. Application of other provisions. .............................................................................................................. 139
16. Active taxpayers’ list. ............................................................................................................................... 140
17. Repeal and Saving. ................................................................................................................................... 140
KHYBER PAKHTUNKHWA SALES TAX ON SERVICES (WITHHOLDING) REGULATION, 2020 ................................. 143
1. Short title, application and commencement. .......................................................................................... 143
2. Definitions................................................................................................................................................ 143
3. Withholding agents and their responsibility. .......................................................................................... 144
4. Services not subject to withholding. ....................................................................................................... 145
5. Compulsory application of full withholding. ........................................................................................... 145
6. Extent of withholding in other cases. ...................................................................................................... 146
7. Input tax adjustment under withholding regime. ................................................................................... 146
8. Deposit time of withheld tax amounts. ................................................................................................... 146
9. Registration of withholding agents of different categories..................................................................... 147
10. Procedure for accounting and deposit of withheld amount of sales tax on services under different
accounting systems of the federal and provincial Governments. ........................................................................... 147
11. Monthly withholding statements by other withholding agents.............................................................. 149
12. Conditions for withholding from unregistered services providers.......................................................... 149
13. Issuance of withholding certificates. ....................................................................................................... 149
14. Adjudication for failure or default in tax withholding. ............................................................................ 149
15. Miscellaneous matters. ........................................................................................................................... 150
16. Repeal: ..................................................................................................................................................... 150
BALOCHISTAN SALES TAX SPECIAL PROCEDURE (WITHHOLDING) RULES, 2018 ................................................ 151
1. Short title, application and commencement. .......................................................................................... 151
2. Definitions................................................................................................................................................ 152
3. Responsibility of a withholding agent. .................................................................................................... 155
4. Responsibility of registered service provider. ......................................................................................... 159
5. Application of other provisions. .............................................................................................................. 159
6. Forms prescribed for withholding agents................................................................................................ 159
Page 5 of 166
Page 6 of 166
Withholding Tax under INCOME TAX LAW
Time of deduction of tax
Section 158 - Time of deduction of tax
A person required to deduct tax from an amount paid by the person shall deduct tax -
(a) in the case of deduction under section 151, at the time the amount is paid or credited to the
account of recipient, whichever is earlier;
(b) in other cases, at the time the amount is actually paid; and
(c) amount actually paid shall have the meaning as may be prescribed.
(2) In case of remittance abroad to non-resident, seven days before the amount is intended to be
remitted abroad to that non-resident, through State Bank or any banking company.
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Payment of Tax Collected or Deducted
Section 160 - Payment of tax collected or deducted
Any tax that has been collected or purported to be collected under Division II of this Part or deducted or
purported to be deducted under Division III of this Part or deducted or collected, or purported to be deducted
or collected under Chapter XII shall be paid to the Commissioner by the person making the collection or
deduction within the time and in the manner as may be prescribed.
(a) where the tax has been collected or deducted by the Federal Government or a Provincial
Government on the day the tax was collected or deducted; or
(b) where the tax has been collected or deducted by a person other than the Federal Government
or a Provincial Government,-
(ii) by remittance abroad to a non-resident through State Bank or any other banking
company, prior to remitting abroad of the amount from which tax is to be deducted
or collected.
Provided that the tax collected by a banking company upto 19th July, 2015 in respect
of advance tax on banking transactions under section 236P of the Ordinance may be
deposited into the Government Treasury by 31st July, 2015.
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Certificate of collection or deduction of tax
Section 164 - Certificate of collection or deduction of tax
(1) Every person collecting tax under Division II of this Part or deducting tax from a payment under
Division III of this Part or deducting or collecting tax under Chapter XII shall, at the time of collection
or deduction of the tax, furnish to the person from whom the tax has been collected or to whom the
payment from which tax has been deducted has been made, copies of the challan of payment or any
other equivalent document alongwith a certificate setting out the amount of tax collected or deducted
and such other particulars as may be prescribed.
(2) A person required to furnish a return of taxable income for a tax year shall attach to the return copies
of the challan of payment on the basis of which a certificate is provided to the person under this
section in respect of tax collected or deducted in that year.
Page 9 of 166
Withholding Tax Statement under INCOME TAX LAW
Section 165 - Statements
(1) Every person collecting tax under Division II of this Part or Chapter XII or the Tenth Schedule or
deducting tax from a payment under Division III of this Part or Chapter XII or the Tenth Schedule shall,
furnish to the Commissioner a quarterly statement in the prescribed form setting out-
(a) the name Computerized National Identity Card Number, National tax Number and address of
each person from whom tax has been collected under Division II of this Part or Chapter XII or
the Tenth Schedule or to whom payments have been made from which tax has been deducted
under Division III of this Part or Chapter XII or the Tenth Schedule in each quarter;
(b) the total amount of payments made to a person from which tax has been deducted under
Division III of this Part or Chapter XII or the Tenth Schedule in each quarter;
(c) the total amount of tax collected from a person under Division II of this Part or Chapter XII or
the Tenth Schedule or deducted from payments made to a person under Division III of this
Part or Chapter XII or the Tenth Schedule in each quarter; and
(d) such other particulars as may be prescribed:
Provided that every person as provided in sub-section (1) shall be required to file
withholding statement even where no withholding tax is collected or deducted during the
period:
Provided further that this section shall not apply where information required under
sub-section (1) has been furnished under section 165A.
Explanation.- For the removal of doubt, it is clarified that this sub-section overrides all conflicting
provisions contained in the Protection of Economic Reforms Act, 1992 (XII of 1992), the Banking
Companies Ordinance, 1962 (LVII of 1962), the Foreign Exchange Regulation Act, 1947 (VII of 1947)
and the regulations made under the State Bank of Pakistan Act, 1956 (XXXIII of 1956), if any, on the
subject, in so far as divulgence of information under section 165 is concerned.
(1A) Every person involved or engaged in economic transactions as prescribed by the Board shall furnish
to the Commissioner a quarterly statement in the prescribed form and manner.
(2) Every prescribed person collecting tax under Division II of this Part or Chapter XII or the Tenth
Schedule or deducting tax under Division III of this Part of Chapter XII or the Tenth Schedule shall
furnish statements under sub-section (1) or (1A) as per the following schedule namely:-
(a) in respect of quarter ending on the 31st day of March, on or before the 20th day of April;
(b) in respect of quarter year ending on the 30th day of June, on or before the 20th day of July;
(c) in respect of quarter ending on the 30th day of September, on or before the 20th day of
October; and
(d) in respect of quarter ending on or before the 31st day of December, on or before the 20th
January.
(2A) Any person who, having furnished statement under sub-section (1) or sub-section (2), discovers any
omission or wrong statement therein, may file a revised statement within sixty days of filing of
statement under sub-section (1) or sub-section (2), as the case may be.
(2B) Notwithstanding anything contained in this section, the Commissioner as he deems fit may by notice
in writing require any person, collecting or deducting tax under this Ordinance, to furnish a statement
for any period specified in the notice within such period of time as may be specified in the notice.
(3) Board may prescribe a statement requiring any person to furnish information in respect of any
transactions in the prescribed form and verified in the prescribed manner.
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(4) A person required to furnish a statement under sub-section (1), may apply in writing, to the
Commissioner for an extension of time to furnish the statement after the due date and the
Commissioner if satisfied that a reasonable cause exists for non-furnishing of the statement by the
due date may, by an order in writing, grant the applicant an extension of time to furnish the
statement.
(5) The Board may make rules relating to electronic furnishing of statements under this section including,-
(a) mandatory electronic filing of statements; and
(b) determination of eligibility of the data of such statements and e-intermediaries, etc.
(6) Every person deducting tax from payment under section 149 shall furnish to the Commissioner an
annual statement in the prescribed form and manner.
1 Sub-rule (1) omitted by SRO 1218(I)/2015 dated: December 08, 2015. Earlier it was:
(1) An annual statement required to be furnished under sub-section (1) of section 165 for a financial year shall be in the form
as set out in Part VIII and Part IX of the Second Schedule to these rules.
Page 11 of 166
Recovery of tax
Section 161 - Failure to pay tax collected or deducted
(1) Where a person -
(a) fails to collect tax as required under Division II of this Part or Chapter XII or deduct tax from a
payment as required under Division III of this Part or Chapter XII or as required under section
50 of the repealed Ordinance; or
(b) having collected tax under Division II of this Part or Chapter XII or deducted tax under Division
III of this Part or Chapter XII fails to pay the tax to the Commissioner as required under section
160, or having collected tax under section 50 of the repealed Ordinance pay to the credit of
the Federal Government as required under sub-section (8) of section 50 of the repealed
Ordinance,
the person shall be personally liable to pay the amount of tax to the Commissioner who may pass an
order to that effect and proceed to recover the same.
(1A) No recovery under sub-section (1) shall be made unless the person referred to in sub-section (1) has
been provided with an opportunity of being heard.
(1B) Where at the time of recovery of tax under sub-section (1) it is established that the tax that was to be
deducted from the payment made to a person or collected from a person has meanwhile been paid
by that person, no recovery shall be made from the person who had failed to collect or deduct the tax
but the said person shall be liable to pay default surcharge at the rate of twelve percent per annum
from the date he failed to collect or deduct the tax to the date the tax was paid.
(2) A person personally liable for an amount of tax under sub-section (1) as a result of failing to collect or
deduct the tax shall be entitled to recover the tax from the person from whom the tax should have
been collected or deducted.
(3) The Commissioner may, after making, or causing to be made, such enquiries as he deems necessary,
amend or further amend an order of recovery under sub-section (1), if he considers that the order is
erroneous in so far it is prejudicial to the interest of revenue:
Provided that the order of recovery shall not be amended, unless the person referred to in
sub-section (1) has been provided an opportunity of being heard.
Section 162 - Recovery of tax from the person from whom tax was not
collected or deducted
(1) Where a person fails to collect tax as required under Division II of this Part or Chapter XII or deduct
tax from a payment as required under Division III of this Part or Chapter XII, the Commissioner may
pass an order to that effect and recover the amount not collected or deducted from the person from
whom the tax should have been collected or to whom the payment was made.
(2) The recovery of tax under sub-section (1) does not absolve the person who failed to deduct tax as
required under Division III of this Part or Chapter XII from any other legal action in relation to the
failure, or from a charge of default surcharge or the disallowance of a deduction for the expense to
which the failure relates, as provided for under this Ordinance.
(3) The Commissioner may, after making, or causing to be made, such enquiries as he deems necessary,
amend or further amend an order of recovery under sub-section (1), if he considers that the order is
erroneous in so far it is prejudicial to the interest of revenue:
Provided that the order of recovery shall not be amended, unless the person referred to in
sub-section (1) has been provided an opportunity of being heard.
Page 12 of 166
Section 163 - Recovery of tax from the person from whom tax was not
collected or deducted
The provisions of this Ordinance shall apply to any amount required to be paid to the Commissioner
under this Division as if it were tax due under an assessment order.
Page 13 of 166
Relevant Penalties
Section 182 - Offences and penalties
Section of the
Sr. # Offences Penalties Ordinance to
which offence
has reference.
(1) (2) (3) (4)
1A Where any person fails to furnish a Such person shall pay a penalty of 165, 165A and
statement as required under section 115, Rs. 5000 if the person had already 165B
165, 165A or 165B within the due date. paid the tax collected or withheld by
him within the due date for
payment and the statement is filed
within ninety days from the due
date for filing the statement and, in
all other cases, a penalty of Rs. 2500
for each day of default from the due
date subject to a minimum penalty
of Rs. 10,000:
1
Provided that where it
stands established that no tax was
required to be deducted or
collected during the relevant
period, minimum amount of penalty
shall be ten thousand Rupees.
5 Any person who fails to deposit the Such person shall pay a penalty of 137
amount of tax due or any part thereof in five per cent of the amount of the
the time or manner laid down under this tax in default.
Ordinance or rules made thereunder.
For the second default an additional
2
[Provided that if the person opts to pay penalty of 25% of the amount of tax
the tax due on the basis of an order under in default.
section 129 on or before the due date
For the third and subsequent
given in the notice under sub-section (2) of
defaults an additional penalty of
section 137 issued in consequence of the
50% of the amount of tax in default.
said order, and does not file an appeal
under section 131 the penalty payable
shall be reduced by 50%.]
6 Any person who repeats erroneous Such person shall pay a penalty of 137
calculation in the return for more than one thirty thousand rupees or three per
year whereby amount of tax 3[paid is] less cent of the amount of the tax
than the actual tax payable under this involved, whichever is higher:
5
4
Ordinance [ ]. Provided that no penalty
shall be imposed to the extent of
the tax shortfall occurring as a result
of the taxpayer taking a reasonably
arguable position on the application
(2) A certificate issued by the Commissioner under sub-section (1) of section 159 shall be in the form
specified in Part VIII of the First Schedule to these rules.
(3) An application for a certificate under sub-section (1) of section 159 read with clause (v) of paragraph
1 of Notification No. S.R.O 947(1)/2008, dated the 5th September, 2008, shall be in the form specified
in Part VII(a) of the First Schedule to these rules.
(4) A system based exemption certificate issued by the Commissioner for goods specified under clause
(v) of paragraph 1 of Notification No. S.R.O. 947(1)2008, dated the 5th September, 2008 shall be in the
(2) The Commissioner, on receipt of a notice under sub-rule (1), shall within thirty days pass an order
accepting the contention or making the order under sub-rule (3).
(3) Where the withholding agent or the person from whom tax is required to be collected or deducted
has notified the Commissioner under sub-rule (1) and the Commissioner has reasonable grounds to
believe that the person not appearing in the active taxpayers' list was required to file return or
statement, as the case may be, the Commissioner may, by an order in writing, direct the withholding
agent to deduct or collect tax under rule 1:
Provided that in case the Commissioner does not pass any order within thirty days of receipt
of notice under sub-rule (1), the Commissioner shall be deemed to have accepted the contention
under sub-rule (2) and approval shall be treated to have been granted.
(2) In making the provisional assessment under sub-rule (1), the Commissioner shall impute taxable
income on the amount of tax deducted or collected under rule 1 by treating the imputed income as
concealed income for the purposes of clause (d) of sub-section (1) of section 111:
Provided that the provision of section 111 shall be applicable on unexplained income, asset
or expenditure in excess of imputed income treated as concealed income under this rule.
Explanation.— For the removal of doubt it is clarified that the imputable income so calculated
or concealed income so determined shall not absolve the person so assessed, from requirement of
filing of wealth statement under sub-section (1) of section 116, the nature and source of amounts
subject to deduction or collection of tax under section 111, selection of audit under section 177 or
214C or subsequent amendment of assessment as provided in rule 8 and all the provisions of the
Ordinance shall apply.
(2) The provisional assessment shall stand abated and shall be taken to be assessment finalized under
sub-section (1) of section 120 where the returns of income and wealth statement for the relevant tax
year and the preceding tax year along with prescribed forms, statements or documents are filed by
the person within a period of forty-five days of receipt of provisional assessment order.
(3) Where returns have been filed before provisional assessment or under sub-rule (2), the tax deducted
or collected under rule 1 shall be adjustable against the tax payable in the return filed for the relevant
tax year.
5. Where the provisional assessment has been treated as final assessment under sub-rule (1) of rule 4,
the Commissioner may within thirty days of the final assessment initiate proceedings for imposition
of penalties under section 182 on account of non-furnishing of return and concealment of income.
7. Where the withholding agent fails to furnish in the withholding statement complete or accurate
particulars of persons not appearing on active taxpayers' list, the Commissioner shall initiate
proceedings under sections 182 and 191 against the withholding agent within thirty days of filing of
withholding statement under section 165.
1 Words “or statement, as the case may be,” omitted by Finance Act, 2020.
2 Words “or a statement under sub-section (4) of section 115,” omitted by Finance Act, 2020.
Page 18 of 166
8. Amendment of assessment.
(1) The Commissioner may amend an assessment order where the imputed income is less than the
amount on which tax was deducted or collected under rule 1 or on the basis of definite information
acquired from an audit or otherwise, the Commissioner is satisfied that—
(a) any income chargeable to tax has escaped assessment; or
(b) total income has been under-assessed, or assessed at too low a rate, or has been the subject
of excessive relief or refund; or
(c) any amount under a head of income has been misclassified.
(2) Notwithstanding the provisions of sub-rule (1), where a provisional assessment has been treated as
final assessment or where in response to the provisional assessment, return has been filed within
forty- five days or where assessment has been amended under sub-rule (1) and the assessment order
is considered erroneous in so far it is prejudicial to the interest of revenue, the Commissioner may,
after making or causing to be made, such enquiries as he deems necessary, amend the assessment
order.
(3) For the purposes of sub-rule (1), "definite information" shall have the same meaning as defined in
sub-section (8) of section 122.
10. The provisions of this Schedule shall not apply on tax collectible or deductible in case of the
following sections:-
(a) tax deducted under section 149;
(b) tax deducted under section 152 other than sub-section 1[(2A)(a),] (2A)(b) and (2A)(c) of
section 152
(ba) Tax deducted under clause (5A) of Part II of the Second Schedule read with sub-section (2) of
section 152.
(bb) tax deducted under sub-section (2) of section 152 to the extent of clause (5AA) of Part II.
(c) tax collected or deducted under section 154;
(e) tax deducted under section 156B.
(i) tax deducted under section 235;
(l) tax collected under section 236;
(p) tax collected under section 236I;
(t) tax collected under section 236Q;
Page 20 of 166
Transactions subject to Withholding Tax under INCOME TAX
LAW
Section 148 - Imports
(1) The Collector of Customs shall collect advance tax from every importer of goods on the value of the
goods at the rate specified in Part II of the First Schedule 1[in respect of goods classified in Parts I to
III of the Tenth Schedule] 2:
Provided that the Board may, by a notification in the official Gazette, add in the Twelfth
Schedule any entry thereto or omit any entry therefrom or amend any entry therein:
Provided further that in case of goods classified under Part III of the Twelfth Schedule which
are used both as raw material and finished goods, the Board may, by notification in the official
Gazette, specify that goods imported by a person or class of persons as raw material for its own use
shall be treated as classified under Part II of the Twelfth Schedule, subject to such conditions and
procedure as may be prescribed.]
3
[ ]
4
(2A) Notwithstanding omission of sub-section (2), any notification issued under the said sub-section and
for the time being in force, shall continue to remain in force, unless amended or rescinded by the
Board through notification in the official Gazette.
5
[ ]
6
[ ]
7
[ ]
(5) Advance tax shall be collected in the same manner and at the same time as the customs-duty payable
in respect of the import or, if the goods are exempt from customs-duty, at the time customs-duty
would be payable if the goods were dutiable.
(6) The provisions of the Customs Act, 1969 (IV of 1969), in so far as relevant, shall apply to the collection
of tax under this section.
(7) The tax required to be collected under this section shall be 8[minimum] tax 9[ ] on the income of the
importer arising from the imports subject to sub-section (1) and this sub-section shall not apply in the
case of import of 10[goods on which tax is required to be collected under this section at the rate of 1%
or 2% by an industrial undertaking for its own use.]
11
[]
(ii) have imports exceeding Rs.500 million during the tax year;
(iii) own total assets exceeding Rs. 350 million at the close of the tax year;
(iv) is single object company;
(v) maintain computerized records of imports and sale of goods;
(vi) maintain a system for issuance of 100% cash receipts on sales;
(vii) present accounts for tax audit every year;
(viii) is registered under the Sales Tax Act, 1990; and
(ix) make sales of industrial raw material of manufacturer registered under the Sales Tax Act, 1990; and
(e) a foreign produced film imported for the purpose of screening and viewing.
1 Clause (b) omitted by Finance Act, 2017. Earlier it was:
(b) fertilizer by manufacturer of fertilizer; and
2 Sub-section (8) and (8A) omitted by Finance Act, 2020.Earlier it was:
(8) The tax required to be collected from a person under this section shall be minimum tax for a tax year on the import of─
[]
(b) edible oil;
(c) packing material; and
(d) plastic raw material imported by an industrial undertaking falling under PCT headings 39.01 to 39.12.
(8A) The tax collected under this section at the time of import of ships by ship-breakers shall be minimum tax.
3 The word “and” omitted by Finance Act, 2009.
4 Expression “value of goods” means the value of the goods as determined under the Customs Act, 1969 (IV of 1969), as if the
goods were subject to ad valorem duty increased by the customs-duty, federal excise duty and sales tax, if any, payable in respect
of the import of the goods.” substituted by Finance Act, 2020.
5 Definition omitted by Finance Act, 2005. Earlier it was inserted by Finance Act, 2004.
6 Explanation omitted by Finance Act, 2020. Earlier it was:
Explanation.- For the purpose of this section the expression “edible oils” includes crude oil, imported as raw material for
manufacture of ghee or cooking oil.
Page 22 of 166
1WITHHOLDING TAX RATES (Double rates applicable on persons not appearing in the ATL)
Withholding Adjustable / Final
Section Nature of Payment / Transaction Rate Agent / Minimum
148 Imports
Persons importing goods classified 1% of the import value as Collector M
(A for industrial
1. in Part I of the Twelfth Schedule increased by customs-duty, sales of
undertaking importing
Part I, Twelfth Schedule tax and federal excise duty Customs for its own use)
Page 23 of 166
Persons importing goods classified 2% of the import value as M
(A for industrial
2. in Part II of the Twelfth Schedule increased by customs-duty, sales
undertaking importing
Part II, Twelfth Schedule tax and federal excise duty for its own use)
Persons importing goods classified 5.5% of the import value as
3. in Part III of the Twelfth Schedule increased by customs-duty, sales M
Part III, Twelfth Schedule tax and federal excise duty
Page 25 of 166
54. Padded Sheets
55. Stomach Tube
56. Stylet for Endotracheal Tube
57. Suction Tube control valve
58. Tracheostomy Tube 7, 7.5, 8
59. Ventilator Circuit
60. Ventury Masks
61. Disposable shoes cover (water proof)
[Clause (12B) of Part IV of 2nd Schedule]
1
9. The provision of section 148 shall not apply to persons importing pulses for a period commencing from
the date of issuance of this notification till 30th June, 2020. [Clause (12C) of Part IV of 2nd Schedule]
2
10. The provisions of section 148 shall not apply on the import of finished drug Remdesivir 100 mg injection
and injectable solution 100 mg vial for the period starting from the 22nd day of June, 2020 and ending on
the date as may be notified by the Board in the official Gazette on recommendation of the National Health
Services, Regulation and Coordination Division. [Clause (12D) of Part IV of 2nd Schedule]
3
11. The provisions of section 148 shall not apply to persons on import of medicines for treatment of life
threatening rare diseases not manufactured in Pakistan, subject to the following conditions, namely:–
(i) the import is approved by the Board, through notification in the official Gazette;
(ii) the specification and quantity of medicine is recommended by the National Health Services,
Regulation and Coordination Division in a prescribed format on a case to case basis; and
(iii) such medicine is required for the personal use of the importing person or his immediate family
member:
Provided that where circumstances exist to take immediate action in emergency situations, the Board
may, on recommendation of a provincial health department or a tertiary care hospital of the Federal or
Provincial Government, provisionally allow import of such quantity of medicine under this clause which
does not exceed sixty days usage. [Clause (12E) of Part IV of 2nd Schedule]
12. The provision of section 148 shall not apply on import of 1.5 million tons of wheat having PCT Heading
1001.1900 and 1001.9900 in pursuance of Cabinet Decision in case No.399/23/2020 dated the 16 th June,
2020. [Clause (12F) of Part IV of 2nd Schedule]
13. The provisions of section 148 shall, in pursuance of the Cabinet Decision in case No. 541/30/2020 dated
the 4th August, 2020, not apply on import by the Trading Corporation of Pakistan of 300,000 metric tons
of white sugar having PCT heading 1701.9910, 1701.9920, specification B. [Clause (12G) of Part IV of 2nd
Schedule]
14. (a) The provisions of section 148 shall not apply on import of following goods for a period of three
months starting from 23rd of June, 2020, namely:-
S. No. Description PCT Code
(1) (2) (3)
1 Oxygen gas 2804.4000
2 Cylinders (for oxygen gas) 7311.0090
3 Cryogenic tanks (for oxygen gas) 7311.0030
; and
(b) the concessions given in this clause shall also apply in respect of the letters of credit opened or
foods declaration forms filed on or after the 23rd June, 2020. [Clause (12H) of Part IV of 2nd Schedule]
15. The provisions of section 148 shall not apply on import of 83 X Micron sprayers for Anti-Locust Operation
(Respective heading) by National Disaster Management Authority (NDMA). [Clause (12I) of Part IV of 2nd
Schedule]
16. The provisions of section 148 shall, in pursuance of the Cabinet Decision in case No. 34/02/2021, dated
12th January, 2021, not apply on import of three hundred thousand metric tons of wheat through
tendering process by the Trading Corporation of Pakistan. [Clause (12J) of Part IV of 2nd Schedule]
17. (a) The provisions of section 148 shall not apply on import of following goods by the manufacturers of
oxygen for a period of three months starting from the 25th day of December, 2020, namely:-
S. No. Description PCT Code
1 Clause (12C) inserted by Finance Act, 2020. Earlier it was inserted by SRO 287(I)/2020 dated April 07, 2020.
2 Clause (12D) inserted Finance Act, 2020. Earlier same was inserted by SRO 557(I)/2020 dated June 22, 2020.
3 Clause (12E) inserted Finance Act, 2020.
Page 26 of 166
(1) (2) (3)
1. Cryogenic Tanks (for oxygen Gas) 7311.0030
(b) the concessions given in this clause shall also apply in respect of the letters of credit opened or goods
forms filed on or after the 25th day of December, 2020. [Clause (12K) of Part IV of 2nd Schedule]
18. The provisions of section 148 and 153 shall not apply on import and subsequent supply of five hundred
thousand metric tons of white sugar imported by the Trading Corporation of Pakistan. [Clause (12L) of Part
IV of 2nd Schedule]
19. The provisions of section 148 shall not apply on import of following goods for a period of one hundred
and eighty days starting from the 14th day of May, 2021, namely:-
S.No. Description PCT Code
(1) (2) (3)
1. - Oxygen 2804.4000
2. - - - Other (Oxygen Cylinders) 7311.0090
3. - - - For Cryogenic (Tanks/Vessels) 7311.0030
4. Oxygen Concentrators/Generators/Manufacturing Plants of all Respective
specifications and capacities. headings
nd
[Clause (12M) of Part IV of 2 Schedule]
20.
21. The provisions of section 148, regarding withholding tax on imports shall not apply in respect of-
(i) goods classified under Pakistan Customs Tariff falling under Chapter 86 and 99 except PCT heading
9918;
(ia) Petroleum oils and oils obtained from bituminous minerals crude (PCT Code 2709.0000), Furnace-
oil (PCT Code 2710.1941), High speed diesel oil (PCT) Code 2710.1931), Motor spirit (PCT Code
2710.1210), J.P.1 (PCT Code 2710.1912), base oil for lubricating oil (PCT Code 2710.1993), Light
diesel oil (PCT Code 2710.1921) and Super Kerosene Oil imported by Pakistan State Oil Company
Limited, Shell Pakistan Limited, Attock Petroleum Limited, Byco Petroleum Pakistan Limited,
Admore Gas Private Limited, Chevron Pakistan Limited, Total- PARCO Pakistan(Private) Limited,
Hascol Petroleum Limited, Bakri Energy (Private) Limited, Overseas Oil Trading Company (Pvt) Ltd,
Gas and Oil Pakistan (Pvt) Ltd or any other oil marketing company licensed by Oil and Gas Regulatory
Authority(OGRA) and oil refineries;
(ii) goods imported by direct and indirect exporters covered under sub chapter 7 of Chapter XII of SRO
450(I)/2001 dated June 18, 2001;
(iii) goods temporarily imported into Pakistan for subsequent exportation and which are exempt from
customs duty and sales tax under Notification No. 492(I)/2009, dated the 13th June, 2009;
(iiia) Goods temporarily imported into Pakistan by international athletes which would be subsequently
taken back by them within one hundred and twenty days of temporary import;
(iv) Manufacturing Bond as prescribed under Chapter XV of Customs Rules, 2001 notified vide S.R.O.
450(I)/2001, dated June 18, 2001; and
(v) mineral oil imported by a manufacturer or formulator of pesticides which is exempt from customs-
duties under the customs Notification No. S.R.O. 857(I)/2008, dated the 16th August, 2008.
(vi) the Federal Government;
(vii) a Provincial Government;
(vii) a Local Government;
(ix) a foreign company and its associations whose majority share capital is held by a foreign government;
(x) a person who imports plant and machinery for execution of a contract with the Federal Government
or a provincial government or a local government and produces a certificate from that government;
(xi) companies importing high speed diesel oil, light diesel oil, high octane blending component or
kerosene oil, crude oil for refining and chemical used in refining thereof in respect of such imports;
and
(xii) Petroleum (E&P) companies covered under the Customs and Sales Tax Notification No.
S.R.O.678(I)/2004, dated the 7th August, 2004, except motor vehicles imported by such companies.
(xiii) Goods produced or manufactured and exported from Pakistan which are subsequently imported in
Pakistan within one year of their exportation, provided conditions of section 22 of the Customs Act,
1969 (IV of 1969) are complied with;
Page 27 of 166
(xiv) plant and machinery imported for setting up of a bagasse/biomass based cogeneration power project
qualifying for exemption under clause (132C) of Part-I of this Schedule.;
(xv) persons authorized under Export Facilitation Scheme 2021 notified by the Board with such scope,
conditions, limitation, restrictions and specification of goods.;
(xvi) motor vehicles upto 1000cc in CBU condition;
(xvii) Printed books excluding brochures, leaflets and similar printed matter, whether or not in single
sheets.(PCT code 49.01);
(xviii) Newspapers, journals and periodicals, whether or not illustrated or containing advertising material (PCT
code 49.02); and
(xix) blind talking mobile phones imported by blind persons as per rules issued by the Board (respective PCT
headings)[Clause (56) Part IV of 2nd Schedule]
22. Fully as well partly designed/assembled cypher devices, for use within the country as are verified by
Cabinet Division (NTISB) with reference to design, quality and quantity. [Clause (60) of Part IV of 2nd
Schedule]
23. The provisions of section 148 of the Income Tax Ordinance, 2001 shall not apply for import of plant, machinery
and equipment including dumpers and special purposes motor vehicles imported by the following for
construction of Sukkur-Multan section of Karachi-Peshawar motorway project and Karakorum Highway (KKH)
Phase-II (Thakot to Havellian Section) of CPEC project respectively:-
a. M/s China State Constrution Engineering Corporation Ltd. (M/s CSEC); and
b. M/s China communication Costruction Company (M/s CCCC).]
[Clause(60A), Part IV, 2nd Schedule]
24. The provisions of section 148 of the Income Tax Ordinance, 2001 (XLIX of 2001), shall not apply for import of
construction materials or goods up to a maximum of 10,898,000 million rupees imported by China State
Construction Engineering Corporation (M/s CSCEC) for construction of Sukkur-Multan section Karachi-
Peshawar Motorway project of National Highway Authority under CPEC. [Clause(60AA), Part IV, 2nd Schedule]
25. The provision of section 148 of the Income Tax Ordinance, 2001 shall not apply on import of Thirty-five (35)
Armoured and Security vehicles imported by or for Ministry of Foreign Affairs, Government of Pakistan meant
for security of visiting foreign dignitaries, Subject to the following conditions, namely:-
(i) that the vehicles imported under this clause shall only be used for the security purpose of foreign
dignitaries and will be parked in Central Pool of Cars (CPC) in the Cabinet Division for further use as and
when needed; and
(ii) that the importing Ministry at the time of import shall furnish an undertaking to the concerned Collector
of Customs to the extent of customs-dues exempted under this clause on consignment to consignment
basis binding themselves that the vehicles imported under this clause shall not be re-exported, sold or
otherwise disposed of without prior approval of the Board and in the manner prescribed thereof.
[Clause(60B), Part IV, 2nd Schedule]
26. The provision of section 148 of the Income Tax Ordinance, 2001 (XLIX of 2001) shall not apply on import of
equipmemt to be furnished or installed for Rail Based Mass Transit Projects in Lahore, Karachi, Peshawar and
Quetta under CPEC. [Clause(60C), Part IV, 2nd Schedule]
27. The provisions of section 148 shall not apply on import of fire fighting equipments by industrial undertakings
set up in the special economic zones established by the Federal Government. [Clause(60D), Part IV, 2nd
Schedule]
28. The provisions of section 148 shall not apply to the import of the capital equipment as defined in section 2 of
the Special Technology Zones Ordinance 2020 (XIII of 2020) by –
(a) zone developers as defined in section 2 of the Special Technology Zones Ordinance 2020 for
consumption in the special technology zones for the period of 10 years commencing from the date of
signing the development agreement;
(b) zone enterprises as defined in section 2 of the Special Technology Zones Authority Ordinance, 2020 for
a period of ten years from the date of issuance of license by the Special Technology Zone Authority;
and
(c) Special Technology Zones Authority established under the Special Technology Zones Ordinance 2020.
[Clause(60DA), Part IV, 2nd Schedule]
29. The provisions of section 148 shall not apply on mobile phones brought in personal baggage under the
Baggage Rules, 2006. [Clause(60E), Part IV, 2nd Schedule]
Page 28 of 166
30. Goods imported by foreign company and its associations whose majority share capital is held by a foreign
government. [SRO 947(I)/2008, 05-09-2008]
31. A person who imports plant, machinery, fixtures, fittings or its allied equipments for the purposes of setting
up an industrial undertaking (including hotels) owned by such person, or for installation of an existing
industrial undertaking (including hotels) owned by the person and a certificate to that effect from the
Commissioner of income tax, in respect of such plant, machinery, fixtures, fittings or equipments is produced.
[SRO 947(I)/2008, 05-09-2008]
32. A person who imports plant and machinery for execution of a contract with the Federal Government or a
provincial government or a local government and produces a certificate from that government [SRO
947(I)/2008, 05-09-2008]
33. Companies importing High-speed diesel oil, light diesel oil, high-octane blending component or kerosene oil
crude oil for refining and chemicals used in refining thereof in respect of such imports. [SRO 947(I)/2008, 05-
09-2008]
34. Import of petroleum (E&P) companies covered under the Customs and Sales Tax Notification SRO 678/2004
dated 7-08-2004, except motor vehicles imported by such companies.
35. Goods imported by Businessmen Hospital Trust, Lahore. [SRO 840(I)/79 dated September 12, 1979]
36. Goods temporarily imported into Pakistan for subsequent exportation which are exempt from Customs duty
and Sales Tax under Notification No. S.R.O 1065(I)/2005 dated 20th October 2005. [SRO 863(I)/2006 dated
22nd August 2006]
37. Import of goods or classes of goods for the execution of contract, imported by contractors and sub-
contractors engaged in the execution of power project under the agreement between the Islamic Republic of
Pakistan and HUB Power Company Limited. [SRO 129(I)/2009 dated 7th February 2009]
38. Import and subsequent supply of items with dedicated use of renewable sources of energy like solar and
wind etc., even if locally manufactured, which include induction lamps, SMD, LEDs with or without ballast
with fittings and fixtures, wind turbines including alternator and mast, solar torches, tubular daylighting
devices such as solatube, lanterns and related instruments, PV modules with or without related
components including invertors, charge controllers and batteries. [Clause(77), Part IV, 2nd Schedule]
39. The provisions of section 148 shall not apply to import of ships and other floating crafts including tugs, survey
vessels and other specialized crafts purchased or bare-boat chartered by a Pakistani entity and flying Pakistani
flag:
Provided that exemption under this clause shall be available up to the year 1[2030], subject to the
condition that the ships and crafts are used for the purpose for which they were procured, and in case such
ships and crafts are used for demolition purposes, tax collectible under section 148, applicable to ships and
crafts purchased for demolition purposes, shall be chargeable. [Clause (98), Part IV, 2nd Schedule]
40. The provisions of section 148 shall not apply to import or acquisition of aircraft on wet or dry lease by M/s
Pakistan International Airlines Corporation with effect from 19th March, 2015. [Clause (99), Part IV, 2nd
Schedule]
41. The provision of section 148 of the Income Tax Ordinance, 2001 (XLIX of 2001) shall not apply on import of
equipmemt to be furnished or installed for Rail Based Mass Transit Projects in Lahore, Karachi, Peshawar and
Quetta under CPEC. [Clause (60C), Part IV, 2nd Schedule]
42. The provision of section 148 of the Income Tax Ordinance, 2001 shall not apply on import of Thirty-five (35)
Armoured and Security vehicles imported by or for Ministry of Foreign Affairs, Government of Pakistan meant
for security of visiting foreign dignitaries, Subject to the following conditions, namely:-
(i) that the vehicles imported under this clause shall only be used for the security purpose of foreign
dignitaries and will be parked in Central Pool of Cars (CPC) in the Cabinet Division for further use as
and when needed; and
(ii) that the importing Ministry at the time of import shall furnish an undertaking to the concerned
Collector of Customs to the extent of customs-dues exempted under this clause on consignment to
consignment basis binding themselves that the vehicles imported under this clause shall not be re-
exported, sold or otherwise disposed of without prior approval of the Board and in the manner
prescribed thereof. [Clause (60B), Part IV, 2nd Schedule]
43. The provisions of section 148 of the Income Tax Ordinance, 2001 (XLIX of 2001), shall not apply for import of
construction materials or goods up to a maximum of 10,898,000 million rupees imported by China State
Page 34 of 166
(iii) Such items in case of import, shall be allowed clearance by the Customs Authorities subject to
furnishing of bank quarantee equal to the amount of income tax involved and the same shall be
released after presentation of consumption certificate issued by the Commissioner Inland Revenue
having jurisdiction;
(iv) The said exemption shall only be available to a person upon furnishing proof of having a functional
business premises located within limits of the Border Sustenance Markets; and
(v) Breach of any of the conditions specified herein shall attract relevant legal provisions of the
Ordinance, besides recovery of the amount of income tax along with default surcharge and penalties
involved.
[Clause (12N)(a), Part IV, 2nd Schedule]
Page 35 of 166
1[ ]
WITHHOLDING TAX RATES (Double rates applicable on persons not appearing in the ATL)
Adjustable/ Final
Section Nature of Payment / Transaction Rate
/ Minimum
148A Tax on local purchase of cooking oil or vegetable ghee by certain persons
The manufacturers of cooking oil or vegetable ghee, or both, shall be chargeable to tax at the
rate of two percent on purchase of locally produced edible oil. 2% F
Page 36 of 166
Section 149 - Salary
(1) Every 1[person responsible for] paying salary to an employee shall, at the time of payment, deduct tax
from the amount paid at the employee’s average rate of tax computed at the rates specified in
Division I of Part I of the First Schedule on the estimated income of the employee chargeable under
the head “Salary” for the tax year in which the payment is made after making adjustment of tax
withheld from employee under other heads and tax credit admissible under section 61, 62, 63 and 64
during the tax year after obtaining documentary evidence, as may be necessary, for:
(i) tax withheld from the employee under this Ordinance during the tax year;
(ii) any excess deduction or deficiency arising out of any previous deduction; or
(iii) failure to make deduction during the year;
(2) The average rate of tax of an employee for a tax year for the purposes of sub-section (1) shall be
computed in accordance with the following formula, namely:-
A/B
where -
A is the tax that would be payable if the amount referred to in component B of the formula
were the employee’s taxable income for that year; and
B is the employee’s estimated income under the head “Salary” for that year.
(3) Notwithstanding anything contained in sub-sections (1) and (2), every person responsible for making
payment for directorship fee or fee after attending board meeting or such fee by whatever name
called, shall at the time of payment, deduct tax at the rate of twenty percent of the gross amount
payable.
(2) The tax imposed under sub-section (1) on a person who receives a dividend shall be computed by
applying the relevant rate of tax to the gross amount of the dividend.
(3) This section shall not apply to a dividend that is exempt from tax under this Ordinance.
Every person paying a dividend shall deduct tax from the gross amount of the dividend paid 1[or collect tax
from the amount of dividend in specie], at the rate specified in Division I of Part III of the First Schedule.
WITHHOLDING TAX RATES (Double rates applicable on persons not appearing in the ATL)
Adjustable/
Withholding
Section Nature of Payment / Transaction Rates Final /
Agent
Minimum
150 Dividend
(a) in case of dividend paid by Independent Power Producers
where such dividend is a pass through item under an
Implementation Agreement or Power Purchase Agreement
7.5% F
or Energy Purchase Agreement and is required to be
reimbursed by Central Power Purchasing Agency (CPPA-G) or
its predecessor or successor entity. Every Person
(b) mutual funds and cases other than those mentioned in
15% F
clauses (a) and (ba)
(ba) in case of a person receiving dividend from a company where
no tax is payable by such company, due to exemption of 25% F
income or carry forward of business losses
Page 41 of 166
Section 7B - Tax on profit on debt
(1) Subject to this Ordinance, a tax shall be imposed, at the rate specified in Division IIIA of Part I of the
First Schedule, on every person, other than a company, who receives a profit on debt from any person
mentioned in clauses (a) to (d) of sub-section (1) of section 151.
(2) The tax imposed under sub-section (1) on a person, other than a company, who receives a profit on
debt shall be computed by applying the relevant rate of tax to the gross amount of the profit on debt.
(3) This section shall not apply to a profit on debt that—
(a) is exempt from tax under this Ordinance; or
(b) exceeds 1[five] million Rupees
WITHHOLDING TAX RATES (Double rates applicable on persons not appearing in the ATL)
Adjustable/
Section Nature of Payment / Transaction Rates Withholding Agent Final/
Minimum
151 Profit on Debt
a) Profits on DSC or National Saving Deposit
15% Every Person
certificates M
Banking Companies & (Adjustable
b) Profit on account or deposit 15%
Financial Institutions for:
Federal / Provincial Companies,
c) Government Securities etc. 15%
Government / Local Authority profit on
d) Profit to any person other than a financial debt u/s 7B
institution, or any bond, certificate, debenture, Banking company, financial & profit
security, or instrument of any kind (other than a 15% institution, company or exceeding
loan agreement between a borrower & a banking finance society 36 M)
company or a development finance institution)
e) Payment to non-resident having no PE [Clause
10% Every Person F
(5A), Part II, 2nd Sch.]
Sukuks
In case the sukuk-holder is a company 25% F
Page 44 of 166
20. The provisions of sections 147, 150A, 151, 155 and 236K shall not apply to “The second Pakistan
international Sukuk Company Limited” and the Third Pakistan International Sukuk Company Limited, as a
recipient. [Clause (96), Part IV, 2nd Schedule]
21. The provisions of sections 131 and 151 shall not apply to the Supreme Court of Pakistan – Diamer Bhasha &
Mohmand Dams – Fund. [Clause (108), Part IV, 2nd Schedule]
22. 1The provisions of sections in Division III of Part V of Chapter X and Chapter XII of this Ordinance for deduction
or collection of withholding tax which were not applicable prior to commencement of the Constitution
(Twenty-fifth Amendment) Act, 2018 (XXXVII of 2018) shall not apply to individual domiciled or company and
association of persons resident in the Tribal Areas forming part of the Provinces of Khyber Pakhtunkhwa and
Balochistan under paragraph (d) of Article 246 of the Constitution with effect from the 1st day of June, 2018
to the 30th day of June, 2023 (both days inclusive). [Clause (109A) Part IV, 2nd Schedule]
23. The provisions of section 151 shall not apply to The Prime Minister’s COVID-19 Pandemic Relief Fund-
2020. [Clause (116) Part IV, 2nd Schedule]
Page 46 of 166
5. Profit on bond, certificate, etc. paid to a banking company or a development financial institution under a loan
agreement by a borrower. [Section 151(1)(d)].
6. Profit on bond, certificate, etc. paid to non-residents and such profit is subject to withholding tax under
section 152(2). [Section 151(2)].
7. Profit on bond, certificate, etc. paid to a person whose income is exempt from tax and produces a certificate
from the Commissioner of an exemption from deduction of tax. [Section 159].
8. Profit on bond, certificate, etc. paid to institutions of the Agha Khan Development Network (Pakistan) listed
in Schedule 1 of the Accord and Protocol dated November 13, 1994, executed between the Government of
the Islamic Republic of Pakistan and Agha Khan Development Network. [Clause (16) of Part IV of 2nd Schedule]
9. Profit on Pak rupees denominated corporate securities and redeemable capital, as defined in the Companies
Ordinance, 1984, listed on a registered stock exchange paid to a non-resident, (excluding local branch or
subsidiary or office of foreign bank, company, association of persons or any other person operating in
Pakistan), where the investment is exclusively made from foreign exchange remitted into Pakistan through a
Special Convertible Rupees Account maintained with a bank in Pakistan. [Clause (19) of Part IV of 2nd
Schedule].
10. Profit on bond, certificate, etc. paid to National Investment (Unit) Trust or a Collective Investment Scheme or
a modaraba or Approved Pension Fund or an Approved Income Payment Plan or a REIT Scheme or a Private
Equity and Venture Capital Fund or a recognized provident Fund or an approved superannuation fund or an
approved gratuity fund. [Clause (47B) of Part IV of 2nd Schedule].
11. Profit on bond, certificate, etc. paid to Special purpose Vehicle for the purpose of securitization. [Clause (38)
of Part IV of 2nd Schedule].
12. Profit on bond, certificate, etc. paid to a Venture Capital Company. [Clause (38A) of Part IV of 2nd Schedule].
13. Profit on Term Finance Certificate issued on, or after 1st July, 1999 to a company. [Clause (59)(i) of Part IV of
2nd Schedule].
14. Profit paid on Term Finance Certificate being the instrument of redeemable capital under the Companies Act,
2017 issued by Prime Minister’s Housing Development Company (Private) Limited. [Clause (59)(ii) of Part IV
of 2nd Schedule].
15. Profit on inter-bank deposits paid to a banking company by another banking company. [SRO 594(I)/91 dated
June 30, 1991].
16. Provisions of withholding tax under this ordinance shall not apply to a banking company as a recipient of the
amount on which tax is deductible. [Rule 5(2), 7th Schedule, ITO, 2001] No exemption Certificate is required
[Circular # 2 of 2008]
17. Payment made to the International Finance Corporation established under the International Finance
Corporation Act, 1956(XXVIII of 1956) [Clause (67), Part IV, 2nd Schedule]
18. Payment made to the Pakistan Domestic Sukuk Company Ltd. [Clause (68), Part IV, 2nd Schedule]
19. Payment made to Asian Development Bank established under ADB Ordinance, 1971. [Clause (69), Part IV, 2nd
Schedule]
20. Payment made to The ECO Trade and Development Bank. [Clause (71), Part IV, 2nd Schedule]
21. Coal Mining and Coal based Power Generation Projects in Sindh],- (i) the dividend income of the
shareholders of such a project shall be exempt from provisions of section 150 from the date of
commencement of business till 30 years from such date; and (ii) the payments made on account of sale
or supply of goods or providing or rendering of services during project construction and operations, shall
be exempt from the provisions of section 153. [Clause (78), Part IV, 2nd Schedule]
22. Inter-corporate profit on debt within the group companies entitled to group taxation and group relief
under section 59AA or section 59B subject to the condition that the return of the group has been filed for
the latest completed tax year. [Clause (11C), Part IV, 2nd Schedule]
23. The provisions of section 151 shall not apply to profit on debt paid on promissory notes and sales tax refund
bonds issued under the provisions of the Sales Tax Act, 1990. [Clause (36B), Part IV, 2nd Schedule]
24. The provisions of section 151 shall not apply to profit on debt paid on Pakistan Banao Certificate. [Clause
(36C), Part IV, 2nd Schedule]
25. The provisions of sections 150 and 151 shall not apply to SARMAYA-E-PAKISTAN LIMITED. [Clause (36D), Part
IV, 2nd Schedule]
26. The provisions of section 151 shall not apply on profit on debt paid on bonds issued under the Federal
Government Duty Drawback Bonds Rules, 2019. [Clause (36E), Part IV, 2nd Schedule]
Page 47 of 166
27. The provisions of section 151 and 153 shall not apply to the National Disaster Risk Management Fund.
[Clause (38D), Part IV, 2nd Schedule]
28. The rate of tax to be deducted under section 151 shall be ten percent from the profit on debt from a debt
instrument, whether conventional or Shariah compliant, issued by the Federal Government under the
Public Debt Act, 1944 (XVIII of 1944) or its wholly owned special purpose company, purchased by a
resident citizen of Pakistan who has already declared foreign assets to the Board through a Foreign
Currency Value Account (FCVA) maintained with authorized banks in Pakistan under the foreign exchange
regulation issued by the State Bank of Pakistan:
Provided that the tax so deducted shall be the final tax. [Clause (5AB), Part II, 2nd Schedule]
(2) The tax imposed under sub-section (1) on a non-resident person shall be computed by applying the
relevant rate of tax to the gross amount of the royalty or fee for technical services.
(4) Any Pakistani-source royalty 3[, fee for offshore digital services] or fee for technical services received
by a non-resident person to which this section does not apply by virtue of clause (a) or (b) of sub-
section (3) shall be treated as income from business attributable to the permanent establishment in
Pakistan of the person.
WITHHOLDING TAX RATES (Partially double rates applicable on persons not appearing in the ATL)
Adjustable/
Withholding
Section Nature of Payment / Transaction Rate Final/
Agent
Minimum
152 Payment to non-resident
Royalties or fee for technical services Every
(1) 15% 30% F
Person
Every
Banking
(1C) Fee for offshore digital service 5% Company / F
Financial
Institution
Execution of contract or sub contract under a
construction, assembly or installation project
in Pakistan including a contract for supply of Every
(1A) 7% M
supervisory activities relating to such project; Person
or any other contract for construction or
services rendered relating thereto; or
Page 54 of 166
EXEMPTIONS, RATE REDUCTION AND CLARIFICATIONS (Section 152 - PAYMENT TO NON-RESIDENTS)
1. Salary paid that is covered under section 149. [Section 152(3)(a)].
2. Dividend paid that is covered under section 150. [Section 152(3)(a)].
3. Prize on prize bond, or winnings from a raffle, lottery, or crossword puzzle that is covered by section 156.
[Section 152(3)(a)].
4. The provisions of sub-section (2) of section 152 shall not apply in respect of payments to foreign news
agencies, syndicate services and non-resident contributors, who have no permanent establishment in
Pakistan.
5. Commission and brokerage that is covered by section 233. [Section 152(3)(a)].
6. Payment that is taxable in the hands of a permanent establishment in Pakistan, with the written approval of
the Commissioner. [Section 152(3)(b)].
7. Payment made by the person who is liable to pay tax thereon as a representative of the non-resident provided
a declaration to this effect is filed with the Commissioner prior to making the payment [Sections 152(3)(c) and
152(4)].
8. Payment that is not chargeable to tax subject to a notice in writing to the Commissioner to this effect
indicating the name and address of the payee and the nature and amount of payment. The Commissioner on
receipt of the notice shall pass an order accepting the contention or directing to deduct the tax. This
exemption shall not apply if the Commissioner directs otherwise. [Sections 152(3)(d), 152(5), 152(5A) and
152(6)].
No notice to the Commissioner is required for payment on account of:
- Import of goods where the title to the goods passes outside Pakistan (certain restrictions apply) [Sections
152(7)].
- Educational and medical expenses remitted in accordance with the regulations of the State Bank of
Pakistan [Sections 152(7)]
9. The rate of tax to be deducted under sub-section (2) of section 152, in respect of payments from profit on
debt payable to a non-resident person having no permanent establishment in Pakistan, shall be 10% of the
gross amount paid.
Provided that tax deducted on profit on debt from debt instrument, Government securities including
treasury bills and Pakistan Investment Bonds shall be final tax on profit on debt payable to a non-resident
person having no permanent establishment in Pakistan and the investments are exclusively made through a
special Rupee Convertible Account maintained with a Bank in Pakistan. [Clause (5A), Part II, 2nd Schedule]
10. 1The rate of tax to be deducted under sub-section (2) of section 152, in respect of payments to an
individual, on account of profit on debt earned from a debt instrument, whether conventional or shariah
compliant, issued by the Federal Government under the Public Debt Act, 1944 and purchased exclusively
through a bank account maintained abroad, a non-resident Rupee account repatriable (NRAR) or a foreign
currency account maintained with a banking company in Pakistan shall be ten percent of the gross amount
paid:
Provided that tax deducted on such profit on debt shall be final tax. [Clause (5AA), Part II, 2nd Schedule]
11. Payment made to the International Finance Corporation established under the International Finance
Corporation Act, 1956(XXVIII of 1956) [Clause 67, Part IV, 2nd Schedule]
12. Payment made to Asian Development Bank established under ADB Ordinance, 1971. [Clause 69, Part IV, 2nd
Schedule]
13. The provisions of section 152 shall not apply in case of a Hajj Group Operator in respect of Hajj operations.
[Clause (72AA) of Part IV of 2nd Schedule]
14. The payments made on account of sale or supply of goods or providing or rendering of services during project
construction and operations, shall be exempt from the provisions of section 152(2A) and section 153.] [Clause
(78)(ii), Part IV of 2nd Schedule].
15. The provisions of sections 147, 150A, 151, 152, 236A and 236K shall not apply to “The second Pakistan
international Sukuk Company Limited” and the Third Pakistan International Sukuk Company Limited, as a
payer. [Clause (95), Part IV, 2nd Schedule]
16. 2The provisions of sections in Division III of Part V of Chapter X and Chapter XII of this Ordinance for deduction
or collection of withholding tax which were not applicable prior to commencement of the Constitution
(Twenty-fifth Amendment) Act, 2018 (XXXVII of 2018) shall not apply to individual domiciled or company and
Page 56 of 166
1
[]
WITHHOLDING TAX RATES (Double rates applicable on persons not appearing in the ATL)
Adjustable/
Section Nature of Payment / Transaction Rate Withholding Agent Final/
Minimum
152A Payment for foreign produced commercials
Every person responsible for making payment directly or through an
agent or intermediary to a non-resident person for foreign produced
20% Every Person F
commercial for advertisement on any television channel or any
other media.
EXEMPTIONS, RATE REDUCTION AND CLARIFICATIONS (Section 152A - PAYMENT FOR FOREIGN PRODUCED COMMERCIALS)
1. The provisions of sections in Division III of Part V of Chapter X and Chapter XII of this Ordinance for deduction or collection of withholding
tax which were not applicable prior to commencement of the Constitution (Twenty-fifth Amendment) Act, 2018 (XXXVII of 2018) shall
not apply to individual domiciled or company and association of persons resident in the Tribal Areas forming part of the Provinces of
Khyber Pakhtunkhwa and Balochistan under paragraph (d) of Article 246 of the Constitution with effect from the 1st day of June, 2018
to the 30th day of June, 2023 (both days inclusive). [Clause (109A) Part IV, 2nd Schedule]
Page 57 of 166
Section 153 - Payments for goods, services and contracts
(1) Every prescribed person making a payment in full or part including a payment by way of advance to a
resident person—
(a) for the sale of goods 1[including toll manufacturing] 2[except where payment is less than
seventy-five thousand Rupees in aggregate, during a financial year];
(b) for the rendering of or providing of services 3[except where payment is less than thirty
thousand Rupees in aggregate, during a financial year];
(c) on the execution of a contract including contract signed by a sportsperson, but not including
a contract for the sale of goods or the rendering of or providing of services, shall, at the time
of making the payment, deduct tax from the gross amount payable (including sales tax, if any)
at the rate specified in Division III of Part III of the First Schedule:
Provided that where the recipient of the payment under clause (b) receives the payment
through an agent or any other third person and the agent or, as the case may be, the third person
retains service charges or fee, by whatever name called, from the payment remitted to the recipient,
the agent or the third person shall be treated to have been paid the service charges or fee by the
recipient and the recipient shall collect tax along with the payment received.
(2) Every exporter or an export house making a payment in full or part including a payment by way of
advance to a resident person or permanent establishment in Pakistan of a non-resident person for
rendering of or providing of services of stitching, dying, printing, embroidery, washing, sizing and
weaving, shall at the time of making the payment, deduct tax from the gross amount payable at the
rate specified in Division IV of Part III of the First Schedule.
(3) The tax deductible under 4[ ] sub-section (1) and under sub-section (2) of this section, on the income
of a resident person or, shall be 5[minimum] tax.
Provided that,-
(a) tax deducted under clause (a) of sub-section (1) shall 6[not be minimum tax] where payment
are received on sale or supply of goods, by a, -
(i) company being a manufacturer of such goods; or
(ii) public company listed on a registered stock exchange in Pakistan;
7
[]
(c) tax deducted under clause (c) of sub-section (1) shall be adjustable if payment are received
by a public company listed on a registered stock exchange in Pakistan, on account of execution
of contracts;
8
[]
(4) The Commissioner may, on application made by the recipient of a payment referred to in sub-section
(1) and after making such inquiry as the Commissioner thinks fit, may allow in cases where tax
deductible under sub-section (1) is 9[not minimum tax], by an order in writing, any person to make
* Print & Electronic Media Services (Company & Other taxpayers): 1.5% M
153(1)(c) Execution of contracts:
Other than a contractor for the supply of goods or rendering or
providing of services in case, M
1
- Company [6.5%] (A for public
2 companies)
- other taxpayers [7%]
In case of contract payment to sportsperson 10% M
(a) The tax in respect of income from services rendered outside Pakistan and construction contracts executed outside
Pakistan shall be charged at the rates as specified in sub-clause (b), provided that receipts from services and income
from contracts are brought into Pakistan in foreign exchange through normal banking channel.
(b) The rates in respect of income from services rendered outside Pakistan shall be 50% of the rates as specified in clause
(2) of Division III of Part III of the First Schedule and the rates in respect of contracts executed outside Pakistan shall be
50% of the rates as specified in clause (3) of Division III of Part III of the First Schedule. [Clause (3), Part II, 2nd Schedule]
Services rendered or provided for stitching, dying, printing, Exporter /
1% M
embroidery, washing, sizing and weaving Export house
EXEMPTIONS, RATE REDUCTION AND CLARIFICATIONS (Section 153 - PAYMENT FOR GOODS, SERVICES
AND CONTRACTS)
1. Payment made to the Federal Government [Section 49].
2. Payment made to a local authority [Section 49 and SRO 586(I)/91 dated June 30, 1991].
3. Payment made to a local government [Section 49 and SRO 586(I)/91 dated June 30, 1991].
4. Payment for sale of goods where payment is less than seventy-five thousand Rupees in aggregate, during a
financial year. [Section 153(1)(a)]
5. Payment for rendering of or providing of services where payment is less than thirty thousand Rupees in
aggregate, during a financial year. [Section 153(1)(b)]
6. Payment for sale of goods to an importer who has paid tax at the time of import of such goods provided the
goods are sold in the same condition as they were when imported [Section 153(5)(a)]
7. Payment of refund of security deposit. [Section 153(5)(c)].
8. Payment representing the cost of construction material supplied to the contractor by the Federal
Government, Provincial Government or a local authority [Section 153(5)(d)].
9. Payment for purchase of an asset under a lease and buy back agreement by a modaraba, leasing company,
banking company or financial institution [Section 153(5)(f)].
10. The rate of tax, under clause (a) of sub-section (1) of section 153, from distributors of cigarette and
pharmaceutical products shall be 1% of the gross amount of payments. [Clause(24A), Part II, 2nd Schedule]
11. The rate of tax under clause (a) of sub-section (1) of section 153 in the case of distributors, dealers, sub-
dealers, wholesalers and retailers of fast moving consumer goods, fertilizers, electronics excluding mobile
phones, sugar, cement, and edible oil as recipient of payment shall be 0.25% of gross amount of payments
subject to the condition that beneficiaries of reduced rate are appearing on the Active Taxpayers’ Lists issued
under the provisions of the Sales Tax Act, 1990 and the Income Tax Ordinance, 2001 (XLIX of 2001);
Provided that the benefits under this clause shall only be available to those Tier-1 retailers as defined
under Sales Tax Act, 1990 who are integrated and configured with Board or its computerized system for real
time reporting of sales or receipt. [Clause (24C), Part II, 2nd Schedule]
12. The rate of tax under clause (a) of sub-section (1) of section 153 in case of a person, other than a company,
as a recipient of payment for goods supplied to Utility Stores Corporation of Pakistan shall be 1.5% of the
gross amount of payment in respect of supply of tea, spices, salt, dry milk, sugar, pulses, wheat flour and ghee
for the period commencing from the date of issuance of this notification till 30th June, 2020:
Provided that this clause shall not be applicable to supply of tea, spices, salt and dry milk which are sold
under a brand name:
Page 63 of 166
withholding tax under clause (a) and (b) of sub-section (1) of section 153 is available only to
the local sales, supplies and services made by the taxpayers of categories specified at serial
no (i) to (v) of this clause
Provided that the rate of deduction of withholding tax under clauses (a) and (b) of
sub-section (1) of section 153 shall be 0.5% on local sales, supplies and services made by
traders of yarn to the above mentioned categories of taxpayers.
[Clause (45A), Part IV, 2nd Schedule] (Clarifications available in circular # 8 of 2011)
28. The provisions of section 153 shall not apply on the purchase of used motor vehicles from general public.
[Clause (45B), Part IV, 2nd Schedule]
29. Payment made to an oil distribution company or an oil refinery or PE of non-resident E&P companies for
supply of its petroleum products. [Clause (46) of Part IV of 2nd Schedule]
30. The provisions of sub-section (3) of section 153 shall not apply to any payment received by a manufacturer
of iron and steel products relating to sale of goods manufactured by him. [Clause (46A) of Part IV of 2nd
Schedule]
31. The provisions of section 153 shall not apply to the following persons as recipients of payment, namely:-
(i) a Provincial Government;
(ii) a local authority;
(iii) persons who are residents of Azad Kashmir and execute contracts in Azad Kashmir only and
produce a certificate to this effect from the concerned income tax authority;
(iv) subject to fulfillment of procedure laid down in clause (12) of Part IV of Second Schedule,
persons receiving payments exclusively for the supply of agriculture produce including
following–
(I) fresh milk;
(II) fish by any person engaged in fish farming;
(III) live chicken, birds and eggs by any person engaged in poultry farming;
(IV) live animals by any person engaged in cattle farming;
(V) unpackaged meat; and
(VI) raw hides:
Provided that this clause shall not apply to the payments for agriculture produce
which has been subjected to any process other than that which is ordinarily performed to
render such produce to be fit to be taken to the market.;
(v) companies receiving payments for the supply of electricity and gas including companies
receiving payments for the transmission of electricity and gas;
(vi) companies receiving payments for the supply of crude oil;
(vii) hotels and restaurants receiving payments in cash for providing accommodation or food or
both, as the case may be;
(viii) shipping companies and air carriers receiving payments for the supply of passenger tickets
and for the cargo charges of goods transported;
(ix) individuals who are not registered under section 181 of the Ordinance, receiving payments
for the supply of sand, bricks, grit, gravel, crushed stone, soft mud or clay; and
(x) artisans, plumbers, electricians, surface finishers, carpenters, painters or daily wagers,
receiving payments in respect of services provided or rendered to the construction sector
including construction of buildings, roads, bridges and other such structures or the
development of land, subject to the following conditions, namely: –
(a) services under this clause are provided or rendered by an individual who is not
registered under section 181;
(b) the name, Computerized National Identity Card Number and address of such individual
is recorded by the recipient of such service; and (c) payment for such services is made
directly to such individual. [Clause (46AA) of Part IV of 2nd Schedule]
32. The provisions of section 153 shall not apply in respect of payments received by a resident person for supply
of such goods as were imported by the same person and on which tax has been paid under section 148.
[Clause (47), Part IV, 2nd Schedule]
33. The provisions of section 153 shall not apply in respect of payments received by a resident person for supply
of such goods as were imported by the same person and on which tax has been paid under section 148.
[Clause (47A) of Part IV of 2nd Schedule]
Page 64 of 166
34. The provisions of sections 150, 151, 233 and Part I, Division VII of the First Schedule shall not apply to any
person making payment to National Investment Unit Trust or a collective investment scheme or Approved
Pension Fund or an Approved Income Payment Plan or a REIT Scheme or a recognized provident fund or an
approved superannuation fund or an approved gratuity fund. [Clause (47B), Part IV, 2nd Schedule]
35. The provisions of clause (a) of sub-section (3) of section 153 shall not apply to cotton ginners. [Clause (47D),
Part IV, 2nd Schedule]
36. Goods imported by companies operating trading houses which-
a. Have paid up capital of exceeding Rs.250 million;
b. Own fixed assets exceeding Rs. 300 million at the close of the Tax Year;
c. Maintain computerized records of imports and sales of goods;
d. Maintain a system for issuance of 100% cash receipts on sales;
e. Present accounts for tax audit every year; and
f. Is registered with the Sales Tax Department:
Provided that the exemption under this clause shall not be available if any of the
aforementioned conditions are not fulfilled for a tax year
Provided further that minimum tax under section 113 shall be 0.5% upto the tax year 2021
and one per cent thereafter.
Explanation.-
(i) For the removal of doubt, exemption under this clause, in respect of section 153, shall only
be available as a recipient and not as withholding agent.
(ii) It is further clarified that in-house preparation and processing of food and allied items for sale
to customers shall not disqualify a company from being treated as a Trading House, provided
that all the conditions in this clause are fulfilled and sale of such items does not exceed two
per cent of the total sales. [Clause (57) of Part IV of 2nd Schedule]
37. Fully as well partly designed/assembled cypher devices, for use within the country as are verified by
Cabinet Division (NTISB) with reference to design, quality and quantity. [Clause (60) of Part IV of 2nd
Schedule].
38. Payment made to the International Finance Corporation established under the International Finance
Corporation Act, 1956(XXVIII of 1956) [Clause (67), Part IV, 2nd Schedule]
39. Payment made to the Pakistan Domestic Sukuk Company Ltd. [Clause (68), Part IV, 2nd Schedule]
40. Payment made to Asian Development Bank established under ADB Ordinance, 1971. [Clause (69), Part IV, 2nd
Schedule]
41. Import and subsequent supply of items with dedicated use of renewable sources of energy like solar and
wind etc., even if locally manufactured, which include induction lamps, SMD, LEDs with or without ballast
with fittings and fixtures, wind turbines including alternator and mast, solar torches, tubular daylighting
devices such as solartube, lanterns and related instruments, PV modules with or without related
components including invertors, charge controllers and batteries [Clause (77), Part IV, 2nd Schedule]
42. The payments made on account of sale or supply of goods or providing or rendering of services during project
construction and operations, shall be exempt from the provisions of section 152(2A) and section 153.] [Clause
(78)(ii), Part IV of 2nd Schedule].
43. The provisions of clause (b) of sub-section (1) of section 153 shall not apply to payments received by National
Telecommunication Corporation against provision of telecommunication services including ancillary services
specified in sub-section (3) of section 41 of the Pakistan Telecommunication (Re-organization) Act, 1996 (XVII
of 1996). [Clause (79A), Part IV of 2nd Schedule].
44. The provisions of sections in Division III of Part V of Chapter X and Chapter XII of this Ordinance for deduction
or collection of withholding tax which were not applicable prior to commencement of the Constitution
(Twenty-fifth Amendment) Act, 2018 (XXXVII of 2018) shall not apply to individual domiciled or company and
association of persons resident in the Tribal Areas forming part of the Provinces of Khyber Pakhtunkhwa and
Balochistan under paragraph (d) of Article 246 of the Constitution with effect from the 1st day of June, 2018
to the 30th day of June, 2023 (both days inclusive). [Clause (109A) Part IV, 2nd Schedule]
45. The provisions of section 153 shall not apply to traders being individuals having turnover upto one
hundred million Rupees as a prescribed person.
Explanation: Trader in this clause shall have the meaning as provided in clause (28D) of Part II of the
Second Schedule. [Clause (115) Part IV, 2nd Schedule]
Page 65 of 166
‘trader’ shall mean an individual engaged in business of buying and selling of goods in the same state
including a retailer and a wholesaler but shall not include a distributor. [Clause (28D) Part II, 2nd Schedule]
46. The provisions of section 153(1)(a) shall with effect from the first day of July, 2020 not apply to
distributors, dealers, wholesalers and retailers of locally manufactured mobile phone devices as
withholding agent. [Clause (119) Part IV, 2nd Schedule]
47. Payment made to residents of Tribal Areas or Azad Kashmir who execute contracts in Tribal Areas or as the
case may be, Azad Kashmir only and produces a certificate to this effect from the Political Agent concerned
or the district authority, as the case may be, or in case of Azad Kashmir, from the Taxation Officer concerned
[SRO 586(I)/91 dated June 30, 1991].
48. Payment made to a person who produces a certificate from the Commissioner to the effect that his income
during the tax year is exempt from tax [SRO 586(I)/91 dated June 30, 1991].
49. Payment made by a company or an AOP having turnover of 50M rupees or above exclusively for the sale of
agricultural produce, including fresh milk, live chicken birds and eggs by any grower/producers of agricultural
produce, engaged in poultry farming and by an industrial undertaking engaged in poultry processing which
has not been subjected to any process other than that which is ordinarily performed to render such produce
fit to be taken to the market [SRO 586(I)/91 dated June 30, 1991].
50. Payment made to a company for the sale of electricity and gas [SRO 586(I)/91 dated June 30, 1991].
51. Payment made to a company for the sale of crude oil [SRO 586(I)/91 dated June 30, 1991].
52. Payment made to Attock Refinery Limited, National Refinery Limited or Pakistan Refinery Limited for the sale
of their products [SRO 586(I)/91 dated June 30, 1991].
53. Payment made to Pakistan State Oil Company Limited, Shell Pakistan Limited or Caltex Oil (Pakistan) Limited
for the sale of petroleum products [SRO 586(I)/91 dated June 30, 1991].
54. Payments made in cash to a hotel or restaurant for providing accommodation or food or both as the case
may be [SRO 586(I)/91 dated June 30, 1991].
55. Payment made to a shipping company or air carrier for sale of passenger ticket or cargo charges of goods
transported [SRO 586(I)/91 dated June 30, 1991].
56. Payment made for sale of goods not exceeding Rs. 75,000 in a financial year. Provided that where the total
payments in a financial year, exceed Rs. 75,000 the payer shall deduct tax from the payments including the
tax on payments made earlier without deduction of tax during the same financial year [SRO 586(I)/91 dated
June 30, 1991].
57. Payment made for services rendered, services provided and execution of a contract not exceeding Rs. 30,000
in a financial year. Provided that where the total payments in a financial year, exceed Rs. 30,000, the payer
shall deduct tax from the payments including the tax on payments made earlier without deduction of tax
during the same financial year [SRO 586(I)/91 dated June 30, 1991].
58. Payment made for sale of cottonseed [SRO 586(I)/91 dated June 30, 1991].
59. Payment made to a manufacturer of goods, who produces a certificate from the Commissioner to the effect
that his income during the tax year is not likely to be chargeable to tax due to assessed losses carried forward
[SRO 586(I)/91 dated June 30, 1991].
60. Payment made to an owner of one goods transport vehicle, once in a financial year from a payer on account
of carriage of goods on behalf of such payer on a single journey undertaken during the said financial year [SRO
586(I)/91 dated June 30, 1991].
61. Payment made to a person whose income is not liable to final taxation and who produces a certificate from
the Commissioner to the effect that his income during the tax year is not likely to be chargeable to tax due to
assessed losses carried forward. [SRO 586(I)/91 dated June 30, 1991].
62. Payment made to a person whose income is not liable to final taxation; and
(a) in respect of goods sold in Pakistan, the said tax shall be paid by the exporter, if the sales in
Pakistan are in from whom tax has been deducted under sub-section (1) of section 153;
(b) the aggregate of the tax deducted under the said sub-section is equal to or exceeds the tax
payable under section 147 in respect of that tax year; and
(c) produces a certificate to that effect from the Commissioner [SRO 586(I)/91 dated June 30, 1991].
63. Payments made by exporters of goods on account of supply of such goods as are purchased in respect of
goods exported outside Pakistan. Provided that –
a. the exporter shall deduct tax on account of goods purchased in respect of goods sold in Pakistan;
b. if tax has not been deducted from payments on account of supply of goods excess of five percent
of export sales; and
Page 66 of 166
c. nothing contained in this clause shall apply to payments made on account of purchases of such
goods in respect of which special rates of tax deduction have been specified. [SRO 368(I)/94
dated March 07, 1994].
64. Provisions of withholding tax under this ordinance shall not apply to a banking company as a recipient of the
amount on which tax is deductible. [Rule 5(2), 7th Schedule, ITO, 2001] No exemption Certificate is required
[Circular # 2 of 2008]
65. Payments on account of insurance premiums to and claims discharged by the Insurance Companies are not
liable to deduction of tax [C. No. 1(25)IT-I/80, 1-10-1980]
66. The provisions of section 153 shall not apply to builders and developers on-
(a) the purchase of building material except steel and cement;
(b) services of plumbing, electrification, shuttering and other similar services other than those provided
by companies. [Sub-rule 1 of Rule 7, Eleventh Schedule]
Page 67 of 166
1
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WITHHOLDING TAX RATES (Double rates applicable on persons not appearing in the ATL)
Adjustable /
Withholding
Section Nature of Payment / Transaction Rate Final/
Agent
Minimum
153B Payment of royalty to resident persons
Every person paying an amount of royalty, in full or in part including by
way of advance, to a resident person shall deduct tax from the gross
15% Every person A
amount payable (including Federal excise duty and provincial sales tax,
if any)
EXEMPTIONS, RATE REDUCTION AND CLARIFICATIONS (Section 153B - PAYMENT OF ROYALTY TO RESIDENT PERSONS)
The provisions of sections in Division III of Part V of Chapter X and Chapter XII of this Ordinance for deduction or collection of withholding tax
which were not applicable prior to commencement of the Constitution (Twenty-fifth Amendment) Act, 2018 (XXXVII of 2018) shall not apply
to individual domiciled or company and association of persons resident in the Tribal Areas forming part of the Provinces of Khyber
Pakhtunkhwa and Balochistan under paragraph (d) of Article 246 of the Constitution with effect from the 1st day of June, 2018 to the 30th
day of June, 2023 (both days inclusive). [Clause (109A) Part IV, 2nd Schedule]
Page 68 of 166
Section 154 - Exports
(1) Every authorised dealer in foreign exchange shall, at the time of realisation of foreign exchange
proceeds on account of the export of goods by an exporter, deduct tax from the proceeds at the rate
specified in Division IV of Part III of the First Schedule.
(2) Every authorised dealer in foreign exchange shall, at the time of realisation of foreign exchange
proceeds on account of the commission due to an indenting commission agent, deduct tax from the
proceeds at the rate specified in Division IV of Part III of the First Schedule.
(3) Every banking company shall, at the time of realisation of the proceeds on account of a sale of goods
to an exporter under an inland back-to back letter of credit or any other arrangement as prescribed
by the Board, deduct tax from the amount of the proceeds at the rate specified in Division IV of Part
III of the First Schedule.
(3A) The Export Processing Zone Authority established under the Export Processing Zone Authority
Ordinance, 1980 (VI of 1980), shall at the time of export of goods by an industrial undertaking located
in the areas declared by the Federal Government to be a Zone within the meaning of the aforesaid
Ordinance, collect tax at the rate specified in Division IV of Part III of the First Schedule.
(3B) Every direct exporter and an export house registered under the Duty and Tax Remission for Exports
Rules, 2001 provided in Sub-Chapter 7 of Chapter XII of the Customs Rules, 2001 shall, at the time of
making payment for a firm contract to an indirect exporter defined under the said rules, deduct tax
at the rates specified in Division IV of Part III of the First Schedule.
(3C) The Collector of Customs at the time of clearing of goods exported shall collect tax from the gross
value of such goods at the rate specified in Division IV of Part III of the First Schedule.
(4) The tax deductible under this section shall be a final tax on the income arising from the transactions
referred to in this section.
(5) The provisions of sub-section (4) shall not apply to a person who opts not to be subject to final
taxation:
Provided that this sub-section shall be applicable from tax year 2015 and the option shall be
exercised every year at the time of filing of return under section 114:
Provided further that the tax deducted under this sub-section shall be minimum tax.
Page 69 of 166
WITHHOLDING TAX RATES
Adjustable
Section Nature of Payment / Transaction Rate Withholding Agent / Final /
Minimum
154 Exports/Indirect Exports/EPZ/Export House:
On realization of proceeds on account of export
(1) 1% F
of goods
Commission to non-export indenting agent 5% F
(2) Commission to Export Indenting Agent / export
5% Authorized Dealer / F
buying house
Banking Company
On realization of proceeds on account of sale of
goods to an exporter under inland back to back
(3) 1% F
LC or any other arrangement as may be
prescribed by CBR
(3A) Exports of goods located in EPZ 1% EPZ Authority F
Exporter / Export house
Payment to indirect exporters as defined in DTRE
(3B) 1% registered under DTRE F
Rules, 2001
Rules, 2001
(3C) Clearance of goods exported 1% Collector of Customs F
The exemption under this clause shall be available on the import of goods subject to following
conditions, namely:-
(i) Such goods shall be supplied only within the limits of Border Sustenance Markets established in
cooperation with Iran and Afghanistan;
(ii) If the goods, on which exemption under this table has been availed, are bought outside the limits of
such markets, income tax shall be charged on the import value as per provisions of section 148 of this
Ordinance;
(iii) Such items in case of import, shall be allowed clearance by the Customs Authorities subject to
furnishing of bank quarantee equal to the amount of income tax involved and the same shall be
released after presentation of consumption certificate issued by the Commissioner Inland Revenue
having jurisdiction;
(iv) The said exemption shall only be available to a person upon furnishing proof of having a functional
business premises located within limits of the Border Sustenance Markets; and
(v) Breach of any of the conditions specified herein shall attract relevant legal provisions of the
Ordinance, besides recovery of the amount of income tax along with default surcharge and penalties
involved.
[Clause (12N)(b), Part IV, 2nd Schedule]
Page 73 of 166
1
Section 154A - Export of Services
(1) Every authorized dealer in foreign exchange shall, at the time of realization of foreign exchange
proceeds on account of the following, deduct tax from the proceeds at the rates specified in Division
IVA of Part III of the First Schedule-
(a) exports of computer software or IT services or IT enabled services in case tax credit under
section 65F in not available;
(b) services or technical services rendered outside Pakistan or export from Pakistan;
(c) royalty, commission or fees derived by a resident company from a foreign enterprise in
consideration for the use outside Pakistan of any patent, invention, model, design, secret
process or formula or similar property right, or information concerning industrial, commercial
or scientific knowledge, experience or skill made available or provided to such enterprise;
(d) construction contracts executed outside Pakistan; and
(e) other services rendered outside Pakistan as notified by the Board from time to time;
(2) The tax deductible under this section shall be a final tax on fulfillment of the following conditions-
(a) return has filed;
(b) withholding tax statements for the relevant tax year have been filed;
(c) sales tax returns under Federal or Provincial laws have been filed, if required under the law;
(d) no credit for foreign taxes paid shall be allowed.
(3) The provisions of sub-section (2) shall not apply to a person who does not fulfill the specified
conditions or who opts not to be subject to final taxation:
Provided that the option shall be exercised every year at the time of filing of return under
section 114.
(4) Where a taxpayer, while explaining the nature and source of any amount, investment, money,
valuable article, expenditure, referred to in section 111, take into account any source of income which
is subject to final tax in accordance with the provisions of this section, he shall not be entitled to take
credit of a sum that can be reasonably attributed to the business activity or activities mentioned in
sub-section (1).
(5) The Board in consultation with State Bank of Pakistan shall prescribe mode, manner and procedure
of payment of tax under this section.
(6) The Board shall have power to include or exclude certain services for applicability of provisions of this
section.
Page 75 of 166
Section 155 - 1[Rent of immoveable] property
(1) Every prescribed person making a payment in full or part (including a payment by way of advance) to
any person on account of rent of immovable property (including rent of furniture and fixtures, and
amounts for services relating to such property) shall deduct tax from the gross amount of rent paid at
the rate specified in Division V of Part III of the First Schedule.
Explanation.- “gross amount of rent” includes the amount referred to in sub-section (1) or (3) of
section 16, if any.
2
Explanation.- For removal of doubt, it is clarified that the sub section (1) shall apply when a payment
is made on account of rent of immoveable property irrespective of head of income.
(3) In this section, “prescribed person” means -
(i) the Federal Government;
(ii) a Provincial Government;
(iii) Local Government;
(iv) a company;
(v) a non-profit organization or a charitable institution;
(vi) a diplomatic mission of a foreign state;
(via) a private educational institution, a boutique, a beauty parlour, a hospital, a clinic or a
maternity home;
(vib) individuals or association of persons paying gross rent of rupees one and a half million and
above in a year; or
(vii) any other person notified by the Board for the purpose of this section.
WITHHOLDING TAX RATES (Double rates applicable on persons not appearing in the ATL)
Adjustable
Section Nature of Payment/Transaction Rate Withholding Agent / Final/
Minimum
155 Rent of immoveable property
Any payment in full or in part including Federal/Provincial/Local
by way of advance on account of rent Government, Company, non-
RATES
of immovable property including rent profit organization or a
SPECIFIED A
of furniture and fixtures and services charitable institution, a
BELOW
relating to such property and amounts diplomatic mission of a
to Individual or AOP foreign state, Private
Any payment in full or in part including Educational Institutions,
by way of advance on account of rent Boutiques, Beauty parlors,
15% of the
of immovable property including rent Hospitals, Clinics, Maternity
gross amount of A
of furniture and fixtures and services homes or Individuals / AOPs
rent
relating to such property and amounts paying gross rent of Rs.
to a Company 1,500,000/- and above
or collection of withholding tax which were not applicable prior to commencement of the Constitution
(Twenty-fifth Amendment) Act, 2018 (XXXVII of 2018) shall not apply to individual domiciled or company and
association of persons resident in the Tribal Areas forming part of the Provinces of Khyber Pakhtunkhwa and
Balochistan under paragraph (d) of Article 246 of the Constitution with effect from the 1st day of June, 2018
to the 30th day of June, 2023 (both days inclusive). [Clause (109A) Part IV, 2nd Schedule]
(2) Where a prize, referred to in sub-section (1), is not in cash, the person while giving the prize shall
collect tax on the fair market value of the prize.
(3) The tax deducible under sub-section (1) or collected under section (2) shall be final tax on the income
from prizes or winnings referred to in the said sub-sections.
WITHHOLDING TAX RATES (Double rates applicable on persons not appearing in the ATL)
Adjustable/
Withholding
Section Nature of Payment / Transaction Rates Final/
Agent
Minimum
Prizes and winnings
Prize on Prize bond & cross word puzzle 15% F
156 Every
Lotteries, Raffles Prizes on quizzes or offered by
20% Person F
companies.
EXEMPTIONS, RATE REDUCTION AND CLARIFICATIONS (Section 156 - PRIZES AND WINNINGS)
1. Prize or winnings paid to a person whose income is exempt from tax and produces a certificate from the
Commissioner of an exemption from deduction of tax [Section 159].
2. Prize or winnings paid to institutions of the Agha Khan Development Network (Pakistan) listed in Schedule 1
of the Accord and Protocol dated November 13, 1994, executed between the Government of the Islamic
Republic of Pakistan and Agha Khan Development Network [Clause (16) of Part IV of 2nd Schedule].
3. Provisions of withholding tax under this ordinance shall not apply to a banking company as a recipient of the
amount on which tax is deductible. [Rule 5(2), 7th Schedule, ITO, 2001] No exemption Certificate is required
[Circular # 2 of 2008]
4. 1The provisions of sections in Division III of Part V of Chapter X and Chapter XII of this Ordinance for deduction
or collection of withholding tax which were not applicable prior to commencement of the Constitution
(Twenty-fifth Amendment) Act, 2018 (XXXVII of 2018) shall not apply to individual domiciled or company and
association of persons resident in the Tribal Areas forming part of the Provinces of Khyber Pakhtunkhwa and
Balochistan under paragraph (d) of Article 246 of the Constitution with effect from the 1st day of June, 2018
to the 30th day of June, 2023 (both days inclusive). [Clause (109A) Part IV, 2nd Schedule]
(2) The tax deductible under sub-section (1) shall be a final tax on the income arising from the sale of
petroleum products to which sub-section (1) applies.
WITHHOLDING TAX RATES (Double rates applicable on persons not appearing in the ATL)
Adjustable /
Withholding
Section Nature of Payment / Transaction Rates Final /
Agent
Minimum
Commission/discount on Petroleum Products
156A Commission or discount on Petroleum Products to
12% Every Person F
Petrol Pump Operators
2[ ]
EXEMPTIONS, RATE REDUCTION AND CLARIFICATIONS (Section 231A - CASH WITHDRAWAL FROM A BANK)
1. Withdrawal by the Federal Government [Section 49 and 236O(a)].
2. Withdrawal by a Provincial Government [Section 49 and 236O(a)].
3. Withdrawal by a Local Authority [Section 49].
4. Withdrawal by a foreign diplomat or a diplomatic mission in Pakistan [Section 236O(b)].
5. Withdrawal by a person whose income is exempt from tax and produces a certificate from the Commissioner of an exemption from
deduction of tax. [Section 159 and 236O(c)].
6. Any cash withdrawal, from a bank made by an earthquake victim against compensation received from GOP including payments through
Earthquake Reconstruction and Rehabilitation Authority account. [Clause 61, Part IV, 2nd Schedule].
7. Provisions of withholding tax under this ordinance shall not apply to a banking company as a recipient of the amount on which tax is
deductible. [Rule 5(2), 7th Schedule, ITO, 2001] No exemption Certificate is required [Circular # 2 of 2008]
8. The provisions of sections 147, 150A, 151, 152, 231A, 231AA, 236A and 236K shall not apply to “The second Pakistan international
Sukuk Company Limited” and the Third Pakistan International Sukuk Company Limited, as a payer. [Clause 95, Part IV, 2nd Schedule]
9. The rate of tax shall be 0.15% under section 231A on cash withdrawal by an exchange company, duly licensed and authorized by the
State Bank of Pakistan, exclusively dedicated for its authorized business related transactions, subject to the condition that a certificate
issued by the concerned Commissioner Inland Revenue for a financial year mentioning details and particulars of its Bank Account being
used entirely for business transactions is provided. [Clause 28B, Part II, 2nd Schedule].
10. The provisions of section 231A shall not apply to a Pak Rupee account if the deposits in the account are made solely from foreign
remittances credited directly into such account. [Clause (101A), Part IV, 2nd Schedule]
11. The provisions of sections 231A, 231AA and 236P shall not apply to a Pak Rupee Account in a tax year to the extent of foreign
remittances credited into such account during that tax year. [Clause (101AA), Part IV, 2nd Schedule]
12. The provisions of section 231A shall not apply in respect of cash withdrawal made from a “Branchless Banking (BB) Agent Account”
utilized to render branchless banking services to customers. [Clause 101, Part IV, 2nd Schedule].
13. The provisions of sections 113, 151, 231A, 231AA and 236P shall not apply to the Supreme Court of Pakistan – Diamer Bhasha &
Mohmand Dams – Fund [Clause 108, Part IV, 2nd Schedule]
14. The provisions of sections in Division III of Part V of Chapter X and Chapter XII of this Ordinance for deduction or collection of
withholding tax which were not applicable prior to commencement of the Constitution (Twenty-fifth Amendment) Act, 2018 (XXXVII
of 2018) shall not apply to individual domiciled or company and association of persons resident in the Tribal Areas forming part of the
Provinces of Khyber Pakhtunkhwa and Balochistan under paragraph (d) of Article 246 of the Constitution with effect from the 1st day
of June, 2018 to the 30th day of June, 2023 (both days inclusive). [Clause (109A) Part IV, 2nd Schedule]
15. The provisions of section 151, 231A, 231AA and 236P shall not apply to The Prime Minister’s COVID-19 Pandemic Relief Fund-
2020. [Clause (116) Part IV, 2nd Schedule]
9. Whenever there is a cash withdrawal of full amount or amount of withdrawal and tax involved exceed the balance, then either
the bank should refuse payment on account of “withdrawal amount exceeds the balance” or make payment to the person
presenting the instrument after setting aside the amount of tax involved.
10. Withholding tax is not attracted on cash withdrawals by banks from accounts maintained with sub-treasury for their day-to-day
cash requirements.
11. Generally, the withdrawal limit from an ATM is below Rs. 25,000 per day and therefore, withdrawals for day-to-day requirements
by default do not attract withholding tax. However, in case cash withdrawal from an ATM per day exceeds Rs. 50,000, withholding
tax would be attracted.
12. The provisions of section 231A shall not apply in respect of cash withdrawal made from a “Branchless Banking (BB) Agent
Account” utilized to render branchless banking services to customers. [Clause 101, Part IV, 2 nd Schedule].
1 Section 231A omitted by Finance Act, 2021. Earlier it was:
231AA. Advance tax on Transaction in Bank
(1) Every banking company, non-banking financial institution, exchange company or any authorized dealer of foreign exchange
shall collect advance tax at the time of sale against cash of any instrument, including Demand Draft, Pay Order, CDR, STDR,
SDR, RTC, or any other instrument of bearer nature or on receipt of cash on cancellation of any of these instruments:
(2) Every banking company, non-banking financial institution, exchange company or any authorized dealer of foreign exchange
shall collect advance tax at the time of transfer of any sum against cash through online Transfer, Telegraphic Transfer, Mail
Transfer or any other mode of electronic transfer.
(3) The advance tax under this section shall be collected at the rate specified in Division VIA of Part IV of the First Schedule, where
the sum total of payments for transactions mentioned in sub-section (1) or sub-section (2) as the case may be, exceed twenty-
five thousand rupees in a day.
EXEMPTIONS, RATE REDUCTION AND CLARIFICATIONS (Section 231AA - Advance tax on Transaction in Bank)
1. The provisions of sections 147, 150A, 151, 152, 231A, 231AA, 236A and 236K shall not apply to “The second Pakistan international
Sukuk Company Limited” and the Third Pakistan International Sukuk Company Limited, as a payer. [Clause 95, Part IV, 2nd Schedule]
2. The provisions of section 231A shall not apply to a Pak Rupee account if the deposits in the account are made solely from foreign
remittances credited directly into such account. [Clause (101A), Part IV, 2nd Schedule]
3. The provisions of sections 113, 151, 231A, 231AA and 236P shall not apply to the Supreme Court of Pakistan – Diamer Bhasha &
Mohmand Dams – Fund. [Clause 108, Part IV, 2nd Schedule]
4. The provisions of sections in Division III of Part V of Chapter X and Chapter XII of this Ordinance for deduction or collection of withholding
tax which were not applicable prior to commencement of the Constitution (Twenty-fifth Amendment) Act, 2018 (XXXVII of 2018) shall
not apply to individual domiciled or company and association of persons resident in the Tribal Areas forming part of the Provinces of
Khyber Pakhtunkhwa and Balochistan under paragraph (d) of Article 246 of the Constitution with effect from the 1st day of June, 2018
to the 30th day of June, 2023 (both days inclusive). [Clause (109A) Part IV, 2nd Schedule]
5. The provisions of section 151, 231A, 231AA and 236P shall not apply to The Prime Minister’s COVID-19 Pandemic Relief Fund-
2020. [Clause (116) Part IV, 2nd Schedule]
Page 81 of 166
Section 231B - Advance tax on private motor vehicles
(1) Every motor vehicle registering authority of Excise and Taxation Department shall collect advance tax
at the time of registration of a new locally manufactured motor vehicle, at the rates specified in
Division VII of Part IV of the First Schedule:
Provided that no collection of advance tax under this sub-section shall be made after five
years from the date of first registration as specified in clauses (a), (b) and (c) of sub-section (6).
(1A) Every leasing company or a scheduled bank or a non-banking financial institution or an investment
bank or a modaraba or a development finance institution, whether shariah compliant or under
conventional mode, at the time of leasing of a motor vehicle to a person whose name is not appearing
in the active taxpayers' list, either through ijara or otherwise, shall collect advance tax at the rate of
four per cent of the value of the motor vehicle.
(2) Every motor vehicle registering authority of Excise and Taxation Department shall collect advance tax
at the time of transfer of registration or ownership of a private motor vehicle, at the rates specified
in Division VII of Part IV of the First Schedule.
Provided that no collection of advance tax under this sub-section shall be made on transfer
of vehicles after five years from the date of first registration in Pakistan.
1
(2A) Every motor vehicle registration authority of Excise and Taxation Department shall, at the time of
registration, collect tax at the rates specified in Division VII of Part IV of the First Schedule, if the locally
manufactured motor vehicle has been sold prior to registration by the person who originally
purchased it from the local manufacturer.
(3) Every manufacturer of a motor vehicle shall collect, at the time of sale of a motor car or jeep, advance
tax at the rate specified in Division VII of Part IV of the First Schedule from the person to whom such
sale is made.
(4) Sub-section (1) shall not apply if a person produces evidence that tax under sub-section (2) in case of
a locally manufactured vehicle or tax under section 148 in the case of imported vehicle was collected
from the same person in respect of the same vehicle.
(5) The advance tax collected under this section shall be adjustable:
Provided that the provisions of this section shall not be applicable in the case of –
(a) the Federal Government;
(b) a Provincial Government;
(c) a Local Government;
(d) a foreign diplomat; or
(e) a diplomatic mission in Pakistan.
(6) For the purposes of this section the expression “date of first registration” means—
(a) the date of issuance of broad arrow number in case a vehicle is acquired from the Armed
Forces of Pakistan;
(b) the date of registration by the Ministry of Foreign Affairs in case the vehicle is acquired from
a foreign diplomat or a diplomatic mission in Pakistan;
(c) the last day of the year of manufacture in case of acquisition of an unregistered vehicle from
the Federal or a Provincial Government; and
(d) in all other cases the date of first registration by the Excise and Taxation Department.
WITHHOLDING TAX RATES (Double rates applicable on persons not appearing in the ATL)
Adj/
Section Nature of Payment / Transaction Rates Withholding Agent Fin/
Min
231B at the time of registration of a new
locally manufactured motor vehicle
at the time of sale of a motor car or jeep
(1) Engine Capacity Tax
(3) 1. Upto 850cc Rs. 7,500 Motor Vehicle
2. 851cc to 1000cc Rs. 15,000 Registration Authority
3. 1001cc to 1300cc Rs. 25,000 A
4. 1301cc to 1600cc Rs. 50,000 Manufacturer of a motor
5. 1601cc to 1800cc Rs. 75,000 vehicle
6. 1801cc to 2000cc Rs. 100,000
7. 2001cc to 2500cc Rs. 150,000
8. 2501cc to 3000cc Rs. 200,000
9. Above 3000cc Rs. 250,000
Every Leasing Company,
4% of the value of scheduled Bank , Non-
Motor Vehicle Banking Financial
Institution, Investment
(1A) Leasing of Motor vehicle to a non-filer only for the person Bank, Development Finance
A
either through ijara or otherwise. whose name is not Institution, Non-Banking
appearing in the Finance Institution,
active taxpayers’ MODARBA (Sharia
list compliant or under
conventional mode)
(2) at the time of transfer of registration or
ownership
Engine Capacity Tax
1. Upto 850cc -
2. 851cc to 1000cc Rs. 5,000
3. 1001cc to 1300cc Rs. 7,500
4. 1301cc to 1600cc Rs. 12,500
5. 1601cc to 1800cc Rs. 18,750 Motor Vehicle Registration
A
6. 1801cc to 2000cc Rs. 25,000 Authority
7. 2001cc to 2500cc Rs. 37,500
8. 2501cc to 3000cc Rs. 50,000
9. Above 3000cc Rs. 62,500
Provided that the rate of tax to be
collected shall be reduced by 10% each
year from the date of first registration in
Pakistan
(2A) if the locally manufactured motor vehicle
has been sold prior to registration by the
person who originally purchased it from
the local manufacturer. Motor Vehicle Registration
A
Engine Capacity Tax Authority
1. Up to 1000cc Rs. 50,000
2. 1001cc to 2000cc Rs. 100,000
3. 2001cc and above Rs. 200,000
Page 83 of 166
EXEMPTIONS, RATE REDUCTION AND CLARIFICATIONS (Section 231B - ADVANCE TAX ON PRIVATE MOTOR
VEHICLES)
1. Not applicable in the case of:
a. The Federal Government
b. The Provincial Government
c. The Local Government
d. A Foreign Diplomat
e. A diplomatic mission in Pakistan [Section 231B(5)]
2. Sub-section (1) of Section 231B shall not apply if a person produces evidence that tax under sub-section (2)
in case of a locally manufactured vehicle or tax under section 148 in the case of imported vehicle was collected
from the same person in respect of the same vehicle. [Section 231B(4)].
3. The provisions of section 231B(1A) shall not apply to light commercial vehicles leased under the Prime
Minister’s Youth Business Loan Scheme. [Clause (102), Part IV, 2nd Schedule].
4. 1The provisions of sections in Division III of Part V of Chapter X and Chapter XII of this Ordinance for deduction
or collection of withholding tax which were not applicable prior to commencement of the Constitution
(Twenty-fifth Amendment) Act, 2018 (XXXVII of 2018) shall not apply to individual domiciled or company and
association of persons resident in the Tribal Areas forming part of the Provinces of Khyber Pakhtunkhwa and
Balochistan under paragraph (d) of Article 246 of the Constitution with effect from the 1st day of June, 2018
to the 30th day of June, 2023 (both days inclusive). [Clause (109A) Part IV, 2nd Schedule]
(2) If the agent retains Commission or brokerage from any amount remitted by him to the principal, he
shall be deemed to have been paid the commission or brokerage by the principal and the principal
shall collect advance tax from the agent.
3
[(2A) Notwithstanding the provisions of sub-section (1), where the principal is making payment on account
of commission to an advertising agent, directly or through electronic or print media, the principal shall
deduct tax (in addition to tax required to be deducted under clause (b) of sub-section (1) of section
153 on advertising services excluding commission), at the rate specified in Division II of Part IV of the
First Schedule on the amount equal to-
A x 15
85
Where A = amount paid or to be paid to electronic or print media for advertising services
(excluding commission) on which tax is deductible under clause (b) of sub-section (I)
of section 153.
(2B) Tax deducted under sub-section (2A) shall be 4[minimum] tax on the income of the advertising agent.]
(3) Where any tax is required to be collected from a person under sub-section (1), such tax shall be the
5
[minimum] tax on the income of such persons.
WITHHOLDING TAX RATES (Double rates applicable on persons not appearing in the ATL)
Adjustable/
Section Nature of Payment / Transaction Rates Withholding Agent Final/
Minimum
233 Brokerage and commission income (including non-resident agents)
10% Federal / Provisional /
Advertising Agents Commission Local Government,
Life Insurance Agents where yearly commissions is Company, AOP M
8%
below Rs. 500,000 constituted by or
All other commissions 12% under any law.
1 Word “association of persons constituted by, or under any law” inserted by Finance Act, 2021.
2 Words inserted by Finance Act, 2010.
3 Sub-section (2A) and (2B) inserted by Finance Act, 2017.
4 Word “final” substituted by Finance Act, 2019.
5 Word “final” substituted by Finance Act, 2019.
Page 85 of 166
EXEMPTIONS, RATE REDUCTION AND CLARIFICATIONS (Section 233 - BROKERAGE AND COMMISSION)
1. Brokerage or commission paid to the Federal Government [Section 49].
2. Brokerage or commission paid to a Provincial Government [Section 49].
3. Brokerage or commission paid to a Local Authority [Section 49].
4. Brokerage or commission paid to a Venture Capital Company [Clause (38A) of Part IV of 2nd Schedule].
5. Provisions of withholding tax under this ordinance shall not apply to a banking company as a recipient of the
amount on which tax is deductible. [Rule 5(2), 7th Schedule, ITO, 2001]. No exemption Certificate is required.
[Circular # 2 of 2008]
6. Brokerage or commission paid to a special purpose vehicle for the purpose of securitization or issue of sukuks
[Clause (38), Part IV, 2nd Schedule]
7. The provisions of sections 150, 151 and 233 shall not apply to a Venture Capital Company. [Clause (38A), Part
IV, 2nd Schedule]
8. The provisions of section 150, 151, 152, 153 and 233 shall not apply to the Islamic Development Bank. [Clause
(38C), Part IV, 2nd Schedule].
9. Brokerage or commission paid to National Investment (Unit) Trust or a Collective Investment Scheme or a
modaraba or Approved Pension Fund or an Approved Income Payment Plan or a REIT Scheme or a Private
Equity and Venture Capital Fund or a recognized provident Fund or an approved superannuation fund or an
approved gratuity fund. [Clause (47B) of Part IV of 2nd Schedule].
10. Payment made to the International Finance Corporation established under the International Finance
Corporation Act, 1956(XXVIII of 1956) [Clause (67), Part IV, 2nd Schedule]
11. Payment made to Asian Development Bank established under ADB Ordinance, 1971. [Clause (69), Part IV, 2nd
Schedule]
12. 1The provisions of sections in Division III of Part V of Chapter X and Chapter XII of this Ordinance for deduction
or collection of withholding tax which were not applicable prior to commencement of the Constitution
(Twenty-fifth Amendment) Act, 2018 (XXXVII of 2018) shall not apply to individual domiciled or company and
association of persons resident in the Tribal Areas forming part of the Provinces of Khyber Pakhtunkhwa and
Balochistan under paragraph (d) of Article 246 of the Constitution with effect from the 1st day of June, 2018
to the 30th day of June, 2023 (both days inclusive). [Clause (109A) Part IV, 2nd Schedule]
13. 2The provisions of section 233 shall not apply to commission received by a retail branchless banking agent
on any amount disbursed by the Ehsaas Emergency Cash Transfer Programme for the period commencing
on 16th April, 2020 and ending on 30th day of September 2020. [Clause (102A), Part IV, 2nd Schedule]
Page 87 of 166
1[ ]
EXEMPTIONS, RATE REDUCTION AND CLARIFICATIONS (Section 233AA - COLLECTION OF TAX BY NCCPL)
1. The provisions of sections in Division III of Part V of Chapter X and Chapter XII of this Ordinance for deduction or collection of withholding
tax which were not applicable prior to commencement of the Constitution (Twenty-fifth Amendment) Act, 2018 (XXXVII of 2018) shall
not apply to individual domiciled or company and association of persons resident in the Tribal Areas forming part of the Provinces of
Khyber Pakhtunkhwa and Balochistan under paragraph (d) of Article 246 of the Constitution with effect from the 1st day of June, 2018
to the 30th day of June, 2023 (both days inclusive). [Clause (109A) Part IV, 2nd Schedule]
Page 88 of 166
Section 234 - Tax on motor vehicles
(1) Any person at the time of collecting motor vehicle tax shall also collect advance tax at the rates
specified in Division III of Part IV of the First Schedule.
(2) If the motor vehicle tax is collected in installments, or lump sum the advance tax may also be collected
in installments or lump sum in like manner.
(2A) In respect of motor cars used for more than ten years in Pakistan, no advance tax shall be collected
after a period of ten years.
(3) In respect of a passenger transport vehicle with registered seating capacity of ten or more persons,
advance tax shall not be collected after a period of ten years from the first day of July of the year of
make of the vehicle.
(4) In respect of a goods transport vehicle with registered laden weight of less than 8120 kilograms,
advance tax shall not be collected after a period of ten years from the date of first registration of
vehicle in Pakistan.
(6) For the purpose of sub-sections (1) and (2) “motor vehicle” shall include the vehicles specified in sub-
section (7) of section 231B.
WITHHOLDING TAX RATES (Double rates applicable on persons not appearing in the ATL)
Responsible
Adjustable
Person /
Section Nature of Payment/Transaction Rates / Final/
Withholding
Minimum
Agent
234 Tax on Motor Vehicles
From plying or hiring of goods transport
including Oil Tankers; (Amended
through 126(I)/2013, SRO 900(I)/2013,
Clause 14A P II, 2nd Sch, again
Rs. 2.50/- per KG A
substituted through SRO 980 of 2013)
Person
collecting
Oil Tankers (SRO 126(I)/2013 dated: 13-
motor vehicle
02-2013)
tax
Reduced rates for goods transport
vehicle with laden weight of 8120 kg or
more after a period ten years from the Rs. 1,200/annum A
date of first registration of the vehicle in
Pakistan
Passenger transport having seating Rs. Per Seat Per annum
capacity of:
Page 89 of 166
Adjustable/
Withholding
Section Nature of Payment / Transaction Rates Final/
Agent
Minimum
234 All Private Motor Vehicles
Collection on annual basis
Engine Capacity Tax
1. Upto 1000CC Rs. 800
2. 1001cc to 1199cc Rs. 1,500
3. 1200cc to 1299cc Rs. 1,750 Person collecting
A
4. 1300cc to 1499cc Rs. 2,500 motor vehicle tax
5. 1500cc to 1599cc Rs. 3,750
6. 1500cc to 1999cc Rs. 4,500
7. 2000cc & above Rs. 10,000
Motor vehicle tax is collected in lump sum
1. Upto 1000CC Rs. 10,000
2. 1001cc to 1199cc Rs. 18,000
3. 1200cc to 1299cc Rs. 20,000
Person collecting
4. 1300cc to 1499cc Rs. 30,000 A
motor vehicle tax
5. 1500cc to 1599cc Rs. 45,000
6. 1500cc to 1999cc Rs. 60,000
7.2000cc and above Rs. 120,000
EXEMPTIONS, RATE REDUCTION AND CLARIFICATIONS (Section 234: Tax on motor vehicles)
1. Motor vehicles owned by the Federal Government. [Section 49].
2. Motor vehicles owned by a Provincial Government. [Section 49].
3. Motor vehicles owned by a Local Authority. [Section 49].
4. Motorcar used for more than ten years in Pakistan. [Section 234(2A)].
5. Passenger transport vehicle with registered seating capacity of ten or more persons after a period of ten years
from the first day of July of the year of make of the vehicle. [Section 234(3)].
6. Goods transport vehicle with registered laden weight of less than 8120 kilograms after a period of ten years
from the date of first registration of the vehicle in Pakistan. [Section 234(4)].
7. 1The provisions of sections in Division III of Part V of Chapter X and Chapter XII of this Ordinance for deduction
or collection of withholding tax which were not applicable prior to commencement of the Constitution
(Twenty-fifth Amendment) Act, 2018 (XXXVII of 2018) shall not apply to individual domiciled or company and
association of persons resident in the Tribal Areas forming part of the Provinces of Khyber Pakhtunkhwa and
Balochistan under paragraph (d) of Article 246 of the Constitution with effect from the 1st day of June, 2018
to the 30th day of June, 2023 (both days inclusive). [Clause (109A) Part IV, 2nd Schedule]
WITHHOLDING TAX RATES (Double rates applicable on persons not appearing in the ATL)
Adjustable/
Section Nature of Payment/Transaction Rate Withholding Agent Final/
Minimum
Person preparing Gas consumption
234A On the amount of gas bill of a CNG 4% M
bill
Page 91 of 166
Section 235 - Electricity consumption
(1) There shall be collected advance tax at the rates specified in 1[Division IV of] Part-IV of the First
Schedule on the amount of electricity bill of a commercial or industrial 2[or domestic] consumer:
3Provided that the provisions of sub-section (1) shall not apply to a domestic consumer of
electricity if his name appears on the Active Taxpayers’ List.
(2) The person preparing electricity consumption bill shall charge advance tax under sub-section (1) in
the manner electricity consumption charges are charged.
4
Explanation.— For removal of doubt, it is clarified that for the purposes of this section electricity
consumption bill referred to in sub-section (2) means electricity bill inclusive of sales tax and all
incidental charges.
(3) Advance tax under this section shall not be collected from a person who produces a certificate from
the Commissioner that his income during tax year is exempt from tax 5[or that he has discharged
advance tax liability 6[under section 147 or whose entire income is subject to final tax regime or
minimum tax regime under any provisions of this Ordinance other than this section].
1 Section 235A omitted by Finance Act, 2021. Earlier it was inserted by Finance Act, 2014.
235A. Domestic electricity consumption.
(1) There shall be collected advance tax at the rates specified in Division XIX of Part IV of the First Schedule on the amount of
electricity bill of a domestic consumer.
Explanation.— For removal of doubt, it is clarified that for the purposes of this section, electricity consumption bill referred
to in sub-section (2) means electricity bill inclusive of sales tax and all incidental charges.
(2) The person preparing electricity consumption bill shall charge advance tax under sub-section (1) in the manner electricity
consumption charges are charged.
(3) Tax collected under this section shall be adjustable against tax liability.
EXEMPTIONS, RATE REDUCTION AND CLARIFICATIONS (Section 235A - DOMESTIC ELECTRICITY CONSUMPTION)
The provisions of sections in Division III of Part V of Chapter X and Chapter XII of this Ordinance for deduction or collection of withholding
tax which were not applicable prior to commencement of the Constitution (Twenty-fifth Amendment) Act, 2018 (XXXVII of 2018) shall
not apply to individual domiciled or company and association of persons resident in the Tribal Areas forming part of the Provinces of
Khyber Pakhtunkhwa and Balochistan under paragraph (d) of Article 246 of the Constitution with effect from the 1st day of June, 2018 to
the 30th day of June, 2023 (both days inclusive). [Clause (109A) Part IV, 2nd Schedule]
Page 95 of 166
1[ ]
Page 96 of 166
Section 236 - Telephone and internet users
(1) Advance tax at the rates specified in 1[Division V] Part IV of the First Schedule shall be collected on the
amount of –
(a) telephone bill of a subscriber;
(b) prepaid cards for telephones;
(c) sale of units through any electronic medium or whatever form;
(d) internet bill of a subscriber; and
(e) prepaid cards for internet.
(2) The person preparing the telephone or internet bill shall charge advance tax under sub-section (1) in
the manner telephone or internet charges are charged.
(3) The person issuing or selling prepaid cards for telephones or internet shall collect advance tax under
sub-section (1) from the purchasers at the time of issuance or sale of cards.
(3A) The person issuing or selling units through any electronic medium or whatever form shall collect
advance tax under sub-section (1) from the purchaser at the time of issuance or sale of units.
(4) Advance tax under this section shall not be collected from Government, a foreign diplomat, a
diplomatic mission in Pakistan, or a person who produces a certificate from the Commissioner that
his income during the tax year is exempt from tax.
(2) The credit for the tax collected under sub-section (1) in that tax year shall, subject to the provisions
of section 147, be given in computing the tax payable by the person purchasing such property in the
relevant tax year or in the case of a taxpayer to whom section 98B or section 145 applies, the tax year,
in which the “said date” as referred to in that section, falls or whichever is later.
(3) Notwithstanding the provisions of sub-section (2), tax collected on a lease of the right to collect tolls
shall be final tax.
Explanation.- For the purposes of this section, sale of any property includes the awarding of any lease
to any person, including a lease of the right to collect tolls, fees or other levies, by whatever name
called.
WITHHOLDING TAX RATES (Double rates applicable on persons not appearing in the ATL)
Withholding Adjustable/ Final/
Section Nature of Payment/Transaction Rate
Agent Minimum
A
Advance tax at the time of sale by auction
10% (F for lease of the
(including confiscated or attached)
236A Every person right to collect tolls)
In case of immovable property sold by
5% A
auction
EXEMPTIONS, RATE REDUCTION AND CLARIFICATIONS (Section 236A - Advance tax at the time of
sale by auction)
1. The provisions of sections 147, 150A, 151, 152, 236A and 236K shall not apply to “The second Pakistan
international Sukuk Company Limited” and the Third Pakistan International Sukuk Company Limited, as a
payer. [Clause (95), Part IV, 2nd Schedule]
2. The provisions of section 236A shall not apply in respect of auction of franchise rights to participating teams
in a national or international league organized by any board or other organization established by the
Government in Pakistan for the purposes of controlling, regulating or encouraging major games and sports
recognized by the Government with effect from the first day of July, 2019. [Clause (95A), Part IV, 2nd Schedule]
2[ ]
EXEMPTIONS, RATE REDUCTION AND CLARIFICATIONS (Section 236B - ADVANCE TAX ON PURCHASE OF AIR TICKET)
The provisions of sections in Division III of Part V of Chapter X and Chapter XII of this Ordinance for deduction or collection of withholding tax
which were not applicable prior to commencement of the Constitution (Twenty-fifth Amendment) Act, 2018 (XXXVII of 2018) shall not apply
to individual domiciled or company and association of persons resident in the Tribal Areas forming part of the Provinces of Khyber
Pakhtunkhwa and Balochistan under paragraph (d) of Article 246 of the Constitution with effect from the 1st day of June, 2018 to the 30th
day of June, 2023 (both days inclusive). [Clause (109A) Part IV, 2nd Schedule]
Page 99 of 166
Section 236C - Advance Tax on sale or transfer of immovable property
(1) Any person responsible for registering1[, recording] or attesting transfer of any immovable property
shall at the time of registering2[, recording] or attesting the transfer shall collect from the seller or
transferor advance tax at the rate specified in Division X of Part IV of the First Schedule:
3
Provided that this sub-section shall not apply to a seller, being the dependant of a Shaheed
belonging to Pakistan Armed Forces or a person who dies while in the service of the Pakistan Armed
Forces or the service of Federal or Provincial Government, in respect of first sale of immovable
property acquired from or allotted by the Federal Government or Provincial Government or any
authority duly certified by the official allotment authority, and the property acquired or allotted is in
recognition of or for services rendered by the Shaheed or the Person who dies in service:
4
Provided further that if the seller or transferor is a non-resident individual holding Pakistan
Origin Card (POC) or National ID Card for Overseas Pakistanis (NICOP) or Computerized National ID
Card (CNIC) who had acquired the said immovable property through a Foreign Currency Value Account
(FCVA) or NRP Rupee Value Account (NRVA) maintained with authorized banks in Pakistan under the
foreign exchange regulations issued by the State Bank of Pakistan, the tax collected under this section
from such persons shall be final discharge of tax liability in lieu of capital gains taxable under section
37 earned by the seller or transferor from the property so disposed of.
5
Explanation,—For removal of doubt, it is clarified that the person responsible for registering,
recording or attesting transfer includes person responsible for registering, recording or attesting
transfer for local authority, housing authority, housing society, co-operative society 6[, public and
private real estate projects registered/governed under any law, joint ventures, private commercial
concerns] and registrar of properties.
(2) The Advance tax collected under sub-section (1) shall be adjustable:
7
Provided that where immovable property referred to in sub-section (1) is acquired and
disposed of within the same tax year, the tax collected under this section shall be minimum tax.
8
[]
9
(3) Advance tax under sub-section (1) shall not be collected if the immovable property is held for a period
exceeding 10[four] years.
11
(4) Sub-section (1) shall not apply to;-
(a) a seller, if the seller is dependent of:
(i) a Shaheed belonging to Pakistan Armed Forces; or
(ii) a person who dies while in the service of the Pakistan Armed Forces or the Federal
and Provincial Government; and
WITHHOLDING TAX RATES (Double rates applicable on persons not appearing in the ATL)
Rate Withholding Adjustable/ Final/
Section Nature of Payment/Transaction
s Agent Minimum
Advance Tax on sale or Transfer of Person A
Immovable Property. responsible for (M incase immovable
236C 1% registering , property is acquired
(Applicable only where immovable property recording or and disposed of within
is held for a period less than 4 years) attesting transfer the same tax year)
EXEMPTIONS, RATE REDUCTION AND CLARIFICATIONS (Section 236C - Advance Tax on sale or
transfer of immovable property)
1. Advance tax under sub-section (1) shall not be collected if the immovable property is held for a period
exceeding four years. [Section 236C(3)]
2. Section 236C(1) shall not apply to;-
(a) a seller, if the seller is dependent of:
(i) a Shaheed belonging to Pakistan Armed Forces; or
(ii) a person who dies while in the service of the Pakistan Armed Forces or the Federal and Provincial
Government; and
(b) to the first sale of immovable property which has been acquired or allotted as an original allotted, duly
certified by the official allotment authority. [Section 236C(4)]
3. The provision of section 236C shall not apply to “Pakistan International Sukuk Company Limited. [Clause (97),
Part IV, 2nd Schedule]
4. Clarification available in Circular 19 of 2016.
5. 1Profit and gains accruing to persons mentioned in proviso to sub-section (1) of section 236C in respect of
first sale of immovable property acquired from or allotted by the Federal Government or Provincial
Government or any authority duly certified by the official allotment authority, and the property acquired
or allotted is in recognition of services rendered by the Shaheed or the person who dies in service. [Clause
(114B), Part I, 2nd Schedule]
6. 2The provisions of sections in Division III of Part V of Chapter X and Chapter XII of this Ordinance for deduction
or collection of withholding tax which were not applicable prior to commencement of the Constitution
(Twenty-fifth Amendment) Act, 2018 (XXXVII of 2018) shall not apply to individual domiciled or company and
association of persons resident in the Tribal Areas forming part of the Provinces of Khyber Pakhtunkhwa and
Balochistan under paragraph (d) of Article 246 of the Constitution with effect from the 1st day of June, 2018
to the 30th day of June, 2023 (both days inclusive). [Clause (109A) Part IV, 2nd Schedule]
3
[]
2
[]
1 Section 236E omitted by Finance Act, 2016. Earlier it was inserted by Finance Act, 2013.
236E. Advance tax on foreign-produced TV plays and serials.
(1) Any licensing authority certifying any foreign TV drama serial or a play dubbed in Urdu or any other regional language, for
screening and viewing on any landing rights channel, shall collect advance tax at the rates specified in Division XII of Part IV of
the First Schedule.
(2) The advance tax collected under sub-section (1) shall be adjustable.
License Category as
provided in PEMRA Tax on License Fee Tax on Renewal
Rules
H Rs. 7500 Rs. 10,000
H-I Rs. 10,000 Rs. 15,000
H-II Rs. 25,000 Rs. 30,000
R Rs. 5,000 Rs. 12,000
B Rs. 5,000 Rs. 40,000
B-1 Rs. 30,000 Rs. 35,000
B-2 Rs. 40,000 Rs. 45,000
B-3 Rs. 50,000 Rs. 75,000
B-4 Rs. 75,000 Rs. 100,000
B-5 Rs. 87,500 Rs. 150,000
B-6 Rs. 175,000 Rs. 200,000
B-7 Rs. 262,500 Rs. 300,000
B-8 Rs. 437,500 Rs. 500,000
B-9 Rs. 700,000 Rs. 800,000
B-10 Rs. 875,500 Rs. 900,000
(2) The rate of tax to be collected by Pakistan Electronic Media Regulatory Authority under section 236F in the case of IPTV, FM
Radio, MMDS, Mobile TV, Mobile Audio, Satellite TV Channel and Landing Rights, shall be 20 percent of the permission fee or
renewal fee, as the case may be.
(3) In addition to tax collected under paragraph (2) Pakistan Electronic Media Regulatory Authority shall collect tax at the rate of
fifty per cent of the permission fee or renewal fee, as the case may be, from every TV Channel on which foreign TV drama serial
or a play in any language, other than English, is screened or viewed.
(2) Credit for the tax collected under sub-section (1) shall be allowed in computing the tax due by the
distributors, dealer or wholesaler on the taxable income for the tax year in which the tax was
collected.]
WITHHOLDING TAX RATES (Double rates applicable on persons not appearing in the ATL)
Adjustable
Section Nature of Payment/Transaction Rates Withholding Agent / Final/
Minimum
236G Advance tax on sales to distributors, dealers & 0.7% [Fertilizer]
wholesalers
Sale of pharmaceuticals, poultry and animal feed, 0.1% [Other than
edible oil and ghee, auto-parts, tyres, varnished, fertilizer]
chemicals, cosmetics, IT equipments, electronics, Manufacturer
A
sugar, cement, iron and steel products, fertilizer, 0.25% [on sale of Commercial Importer
motorcycles, pesticides, cigarettes, glass, textile, fertilizer if person
beverages, paint or foam sector to distributors, appearing in ATL
dealers and wholesalers list of Income Tax
and Sales Tax ]
EXEMPTIONS, RATE REDUCTION AND CLARIFICATIONS (Section 236G - ADVANCE TAX ON SALES TO
DISTRIBUTORS, DEALERS AND WHOLESALERS)
1. 2The provisions of sections in Division III of Part V of Chapter X and Chapter XII of this Ordinance for deduction
or collection of withholding tax which were not applicable prior to commencement of the Constitution
(Twenty-fifth Amendment) Act, 2018 (XXXVII of 2018) shall not apply to individual domiciled or company and
association of persons resident in the Tribal Areas forming part of the Provinces of Khyber Pakhtunkhwa and
Balochistan under paragraph (d) of Article 246 of the Constitution with effect from the 1st day of June, 2018
to the 30th day of June, 2023 (both days inclusive). [Clause (109A) Part IV, 2nd Schedule]
(2) Credit for the tax collected under sub-section (1) shall be allowed in computing the tax due by the
retailer on the taxable income for the tax year in which the tax was collected.
EXEMPTIONS, RATE REDUCTION AND CLARIFICATIONS (Section 236H - Advance Tax on Sales to
Retailers)
1. The provisions of clause (a) of section 165, shall not apply in case of manufacturer, distributor, dealer and
wholesaler required to collect advance tax under sub section (1) of section 236H. [Clause 81, Part IV, 2nd
Schedule]1
2. 2The provisions of sections in Division III of Part V of Chapter X and Chapter XII of this Ordinance for deduction
or collection of withholding tax which were not applicable prior to commencement of the Constitution
(Twenty-fifth Amendment) Act, 2018 (XXXVII of 2018) shall not apply to individual domiciled or company and
association of persons resident in the Tribal Areas forming part of the Provinces of Khyber Pakhtunkhwa and
Balochistan under paragraph (d) of Article 246 of the Constitution with effect from the 1st day of June, 2018
to the 30th day of June, 2023 (both days inclusive). [Clause (109A) Part IV, 2nd Schedule]
3[ ]
1 Clause 81, Part IV, 2nd Schedule omitted by Finance Act, 2019.
2 Clause (109A) inserted by Finance Act, 2019.
3 Section 236HA omitted by Finance Act, 2021. Earlier it was inserted by Finance Act, 2018.
236HA. Tax on sale of certain petroleum products.
(1) Every person selling petroleum products to a petrol pump operator or distributer, where such operator or distributer is not
allowed a commission or discount, shall collect advance tax on ex-depot sale price of such products at the rate specified in
Division XVA of Part IV of the First schedule.
(2) The tax deductible under sub-section (1) shall be a final tax on the income arising from the sale of petroleum products to
which sub-section (1) applies.
WITHHOLDING TAX RATES (Double rates applicable on persons not appearing in the ATL)
Adjustable/
Section Nature of Payment/Transaction Rate Withholding Agent Final/
Minimum
Every person selling petroleum products
236HA Rate of Collection tax of ex-depot sale price 0.5% F
to petrol pump operator or distributer
EXEMPTIONS, RATE REDUCTION AND CLARIFICATIONS (Section 236HA - TAX ON SALE OF CERTAIN PETROLEUM PRODUCTS)
The provisions of sections in Division III of Part V of Chapter X and Chapter XII of this Ordinance for deduction or collection of withholding tax
which were not applicable prior to commencement of the Constitution (Twenty-fifth Amendment) Act, 2018 (XXXVII of 2018) shall not apply
to individual domiciled or company and association of persons resident in the Tribal Areas forming part of the Provinces of Khyber
Pakhtunkhwa and Balochistan under paragraph (d) of Article 246 of the Constitution with effect from the 1st day of June, 2018 to the 30th
day of June, 2023 (both days inclusive). [Clause (109A) Part IV, 2nd Schedule]
(2) The person preparing fee voucher or challan shall charge advance tax under sub-section (1) in the
manner the fee is charged.
(3) Advance tax under this section shall not be collected from a person on an amount which is paid by
way of scholarship or where annual fee does not exceed two hundred thousand rupees.
(4) The term “fee” includes, tuition fee and all charges received by the educational institution, by
whatever name called, excluding the amount which is refundable.
(5) Tax collected under this section shall be adjustable against the tax liability of either of the parents or
guardian making payment of the fee.
(6) Advance tax under this section shall not be collected from a person who is a non-resident and,
(i) furnishes copy of passport as an evidence to the educational institution that during previous tax
year, his stay in Pakistan was less than one hundred eighty-three days;
(ii) furnishes a certificate that he has no Pakistan-source income; and
(iii) the fee is remitted directly from abroad through normal banking channels to the bank account of
the educational institution.
EXEMPTIONS, RATE REDUCTION AND CLARIFICATIONS (Section 236I - COLLECTION OF ADVANCE TAX BY
EDUCATION INSTITUTIONS)
1. 2The provisions of sections in Division III of Part V of Chapter X and Chapter XII of this Ordinance for deduction
or collection of withholding tax which were not applicable prior to commencement of the Constitution
(Twenty-fifth Amendment) Act, 2018 (XXXVII of 2018) shall not apply to individual domiciled or company and
association of persons resident in the Tribal Areas forming part of the Provinces of Khyber Pakhtunkhwa and
Balochistan under paragraph (d) of Article 246 of the Constitution with effect from the 1st day of June, 2018
to the 30th day of June, 2023 (both days inclusive). [Clause (109A) Part IV, 2nd Schedule]
4
Explanation,—For removal of doubt, it is clarified that the person responsible for registering,
recording or attesting transfer includes person responsible for registering, recording or attesting
transfer for local authority, housing authority, housing society, co-operative society 5[public and
private real estate projects registered/governed under tany law, joint ventures, private commercial
concerns] and registrar of properties.
(2) The advance tax collected under sub-section (1) shall be adjustable:
6
Provided further that if the buyer or transferee is a non-resident individual holding Pakistan
Origin Card (POC) or National ID Card for Overseas Pakistanis (NICOP) or Computerized National ID
Card (CNIC) who has acquired the said immovable property through a Foreign Currency Value
Account (FCVA) or NRP Rupee Value Account (NRVA) maintained with authorized banks in Pakistan
under the foreign exchange regulations issued by the State Bank of Pakistan, the tax collected under
this section from such persons shall be final discharge of tax liability for such buyer or transferee.
7
[(3) Any person responsible for collecting payments in installments for purchase or allotment of any
immovable property where the transfer is to be effected after making payment of all installments,
shall at the time of collecting installments collect from the allotee or transferee advance tax at the
rate specified in Division XVIII of Part IV of the First Schedule:
8
Provided that where tax has been collected along with instalments, no further tax under
this section shall be collected at the time of transfer of property in the name of buyer from whom
tax has been collected in installment which is equal to the amount payable in this section.
9
[ ]
Provided that the mode of payment by the expatriate Pakistanis in the said scheme or
schemes shall be in the foreign exchange remitted from outside Pakistan through normal banking
channels.
WITHHOLDING TAX RATES (Double rates applicable on persons not appearing in the ATL)
Rate Adjustable/
Responsible Person /
Section Nature of Payment/Transaction Final/
Withholding Agent
Minimum
Advance tax on purchase or transfer of
Person responsible for
immovable property
1% of the fair registering, recording or
236K At the time of registering, recording or attesting A
market value attesting transfer of
the transfer of immovable property, collect
immovable property
from the purchaser or transferee
EXEMPTIONS, RATE REDUCTION AND CLARIFICATIONS (Section 236K - Advance Tax on sale or
transfer of immovable property)
1. The provisions of sections 147, 150A, 151, 152, 236A and 236K shall not apply to “The second Pakistan
international Sukuk Company Limited” and the Third Pakistan International Sukuk Company Limited, as a
payer. [Clause (95), Part IV, 2nd Schedule]
2. The provisions of sections 147, 150A, 151, 155 and 236K shall not apply to “The second Pakistan
international Sukuk Company Limited” and the Third Pakistan International Sukuk Company Limited, as a
recipient. [Clause (96), Part IV, 2nd Schedule]
3. 1The provisions of sections in Division III of Part V of Chapter X and Chapter XII of this Ordinance for deduction
or collection of withholding tax which were not applicable prior to commencement of the Constitution
(Twenty-fifth Amendment) Act, 2018 (XXXVII of 2018) shall not apply to individual domiciled or company and
association of persons resident in the Tribal Areas forming part of the Provinces of Khyber Pakhtunkhwa and
Balochistan under paragraph (d) of Article 246 of the Constitution with effect from the 1st day of June, 2018
to the 30th day of June, 2023 (both days inclusive). [Clause (109A) Part IV, 2nd Schedule]
2[ ]
(3)
The advance tax under this section shall not be collected in the case of the Federal Government, a Provincial Government, a
Local Government or a foreign diplomatic mission in Pakistan.
1 Clause (109A) inserted by Finance Act, 2019.
2 Section 236L omitted by Finance Act, 2021. Earlier it was inserted by Finance Act, 2014.
236L. Advance tax on purchase of international air ticket.
(1) Every airline, issuing ticket for journey originating from Pakistan, shall collect advance tax at the rates specified in Division
XX of Part IV of the First Schedule, on the gross amount of international air tickets issued to passengers booking one-way or
return, from Pakistan.
(2) The airline issuing air ticket shall collect or charge advance tax under sub-section (1) in the manner air ticket charges are
collected or charged, either manually or electronically.
(3) The mode, manner and time of collection under sub-section (1) and time of collection shall be as may be prescribed.
(4) The advance tax collected under sub-section (1) shall be adjustable.
EXEMPTIONS, RATE REDUCTION AND CLARIFICATIONS (Section 236L - ADVANCE TAX ON PURCHASE OF INTERNATIONAL AIR
TICKET)
The provisions of sections in Division III of Part V of Chapter X and Chapter XII of this Ordinance for deduction or collection of withholding tax
which were not applicable prior to commencement of the Constitution (Twenty-fifth Amendment) Act, 2018 (XXXVII of 2018) shall not apply
to individual domiciled or company and association of persons resident in the Tribal Areas forming part of the Provinces of Khyber
Pakhtunkhwa and Balochistan under paragraph (d) of Article 246 of the Constitution with effect from the 1st day of June, 2018 to the 30th
day of June, 2023 (both days inclusive). [Clause (109A) Part IV, 2nd Schedule]
1[ ]
1 Section 236P omitted by Finance Act, 2021. Earlier it was inserted by Finance Act, 2015.
236P. Advance tax on banking transactions otherwise than through cash.
(1) Every banking company shall collect advance adjustable tax from a person whose name is not appearing in the active
taxpayers' list at the time of sale of any instrument, including demand draft, pay order, special deposit receipt, cash deposit
receipt, short term deposit receipt, call deposit receipt, rupee traveller‘s cheque or any other instrument of such nature.
(2) Every banking company shall collect advance adjustable tax from a 1[person whose name is not appearing in the active
taxpayers' list] at the time of transfer of any sum through cheque or clearing, interbank or intra bank transfers through
cheques, online transfer, telegraphic transfer, mail transfer, direct debit, payments through internet, payments through
mobile phones, account to account funds transfer, third party account to account funds transfers, real time account to
account funds transfer, real time third party account to account fund transfer, automated teller machine (ATM) transfers, or
any other mode of electronic or paper based funds transfer.
(3) The advance tax under this section shall be collected at the rate specified in Division XXI of Part IV of the First Schedule, where
the sum total of payments for all transactions mentioned in sub-section (1) or subsection (2), as the case may be, exceed fifty
thousand rupees in a day.
Explanation.- For removal of doubt, it is clarified that the said fifty thousand rupees shall be aggregate withdrawals from all
the bank accounts in a single day.
(4) Advance tax under this section shall not be collected in the case of payments made for Federal, Provincial or local Government
taxes.
EXEMPTIONS, RATE REDUCTION AND CLARIFICATIONS (Section 236P - Advance tax on banking transactions otherwise than through
cash)
1. The provisions of sections 231A, 231AA and 236P shall not apply to a Pak Rupee Account in a tax year to the extent of foreign
remittances credited into such account during that tax year. [Clause (101AA), Part IV, 2nd Schedule]
2. The provisions of sections 113, 151, 231A, 231AA and 236P shall not apply to the Supreme Court of Pakistan – Diamer Bhasha &
Mohmand Dams – Fund. [Clause 108, Part IV, 2nd Schedule]
3. The provisions of section 236P shall not apply at the time of transfer of any sum to the Supreme Court of Pakistan – Diamer Bhasha &
Mohmand Dams – Fund. [Clause 109, Part IV, 2nd Schedule]
4. The provisions of sections in Division III of Part V of Chapter X and Chapter XII of this Ordinance for deduction or collection of withholding
tax which were not applicable prior to commencement of the Constitution (Twenty-fifth Amendment) Act, 2018 (XXXVII of 2018) shall
not apply to individual domiciled or company and association of persons resident in the Tribal Areas forming part of the Provinces of
Khyber Pakhtunkhwa and Balochistan under paragraph (d) of Article 246 of the Constitution with effect from the 1st day of June, 2018
to the 30th day of June, 2023 (both days inclusive). [Clause (109A) Part IV, 2nd Schedule]
5. The provision of section 236P shall not apply to special convertible rupee account (SCRA) of a non-resident company having no
permanent establishment in Pakistan. [Clause (112) Part IV, 2nd Schedule]
Page 111 of 166
Section 236Q - Payment to residents for use of machinery and equipment
(1) Every prescribed person making a payment in full or in part including a payment by way of advance
to a resident person for use or right to use industrial, commercial and scientific equipment shall
deduct tax from the gross amount at the rate specified in Division XXIII of Part IV of the First Schedule.
(2) Every prescribed person making a payment in full or in part including a payment by way of advance
to a resident person on account of rent of machinery shall deduct tax from the gross amount at the
rate specified in Division XXIII of Part IV of the First Schedule.
(3) The tax deductible under sub-sections (1) and (2) shall be 1[minimum] tax on the income of such
resident person.
(4) In this section “prescribed person” means a prescribed person as defined in sub-section (7) of section
153.
(5) The provisions of sub-section (1) and (2) shall not apply to—
(a) agricultural machinery; and
(b) machinery leased by a leasing company, an investment bank or a modaraba or a scheduled bank
or a development finance institution in respect of assets owned by the leasing company or an
investment bank or a modaraba or a scheduled bank or a development finance institution.
EXEMPTIONS, RATE REDUCTION AND CLARIFICATIONS (Section 236Q - Payment to Residents for
use of Machinery and Equipment.
1. The provisions of section 151, 153, 233 and 236Q shall not apply to special purpose vehicle for the purpose
of securitization or issue of sukuks. [Clause (38), Part IV, 2nd Schedule]
2. 2The provisions of sections in Division III of Part V of Chapter X and Chapter XII of this Ordinance for deduction
or collection of withholding tax which were not applicable prior to commencement of the Constitution
6. The provisions of section 236P shall not apply to a non-resident rupee account repatriable (NRAR) or a foreign currency account
maintained with a banking company in Pakistan of a non-resident individual investing in a debt instrument, whether conventional
or shariah compliant, issued by the Federal Government under the Public Debt Act, 1944. [Clause (112A) Part IV, 2nd Schedule]
7. The provisions of section 151, 231A, 231AA and 236P shall not apply to The Prime Minister’s COVID-19 Pandemic Relief Fund-
2020. [Clause (116) Part IV, 2nd Schedule]
8. The provisions of section 236P shall not apply at the time of transfer of any sum to The Prime Minister’s COVID-19 Pandemic Relief
Fund-2020.] [Clause (117) Part IV, 2nd Schedule]
1 Word “final” substituted by Finance Act, 2020.
2 Clause (109A) inserted by Finance Act, 2019.
Page 112 of 166
(Twenty-fifth Amendment) Act, 2018 (XXXVII of 2018) shall not apply to individual domiciled or company and
association of persons resident in the Tribal Areas forming part of the Provinces of Khyber Pakhtunkhwa and
Balochistan under paragraph (d) of Article 246 of the Constitution with effect from the 1st day of June, 2018
to the 30th day of June, 2023 (both days inclusive). [Clause (109A) Part IV, 2nd Schedule]
1[ ]
2[ ]
3[ ]
1 Section 236S omitted by Finance Act, 2021. Earlier it was inserted by Finance Act, 2015.
236S. Dividend in specie.
Every person making payment of dividend-in-specie shall collect tax from the gross amount of the dividend in specie paid at the
rate specified in Division I of Part III of the First Schedule.
WITHHOLDING TAX RATES (Double rates applicable on persons not appearing in the ATL)
Adjustable/
Withholding
Section Nature of Payment / Transaction Rates Final /
Agent
Minimum
150 Dividend
a) in case of dividend paid by Independent Power 1[Producers] where such
dividend is a pass through item under an Implementation Agreement or
Power Purchase Agreement or Energy Purchase Agreement and is required 7.5% F
to be reimbursed by Central Power Purchasing Agency (CPPA-G) or its
predecessor or successor entity.
1(ba) in case of a person receiving dividend from a company where no tax
is payable by such company, due to exemption of income or carry forward 25% Every Person F
of business losses
b) mutual funds and cases other than those mentioned in clauses (a) and
15% F
(ba) above
In case of a stock fund if dividend receipts of the fund are less than capital
12.5% F
gains,
Tax Rate on dividend received by an individual from a Rental REIT Scheme 7.5% F
Provided further that in case of a stock fund if dividend receipts of the fund are less than capital gains, the rate of
tax deduction shall be 12.5%.
Provided further that if a Developmental REIT Scheme with the object of development and construction of
residential buildings is set up by thirtieth day of June, 2020, rate of tax on dividend received by a person from such
Developmental REIT Scheme shall be reduced by fifty percent for three years from the date of setting up of the said Scheme:
Provided further that the rate of tax on dividend received by a person, other than a company, from a money market
mutual fund shall be 10%, if the amount of dividend does not exceed two and a half million Rupees:
Provided also that the rate of tax on dividend received by an individual, from a Rental REIT Scheme shall be 7.5%.
(2) Insurance premium collected through agents of the insurance company shall be treated to have been collected by the insurance
company.
(3) Advance tax collected under this section shall be adjustable.
WITHHOLDING TAX RATES
Withholding Adjustable/
Section Nature of Payment / Transaction Rates
Agent Final/ Minimum
236U Advance tax on insurance premium
1. General insurance premium 4% only for the person whose
name is not appearing in
Life insurance premium if exceeding Rs 0.3 million per Insurance A
2. 1% the active taxpayers’ list
annum Company
3. Others 0%
1 Section 236V omitted by Finance Act, 2021. Earlier it was inserted by Finance Act, 2016.
236V. Advance tax on extraction of minerals.
(1) There shall be collected advance tax at the rate specified in Division XXVI of Part-IV of the First Schedule on the value of
minerals extracted, produced, despatched and carried away from the licensed or leased areas of the mines.
(2) Advance tax under sub-section (1) shall be collected by the provincial authority collecting royalty per metric ton from the
lease-holder of mines or any person extracting minerals.
(3) Advance tax collected under this section shall be adjustable.
(4) The value of the minerals for the purpose of this section shall be as specified by the Board.
EXEMPTIONS, RATE REDUCTION AND CLARIFICATIONS (SECTION 236V - ADVANCE TAX ON EXTRACTION OF MINERALS)
The provisions of sections in Division III of Part V of Chapter X and Chapter XII of this Ordinance for deduction or collection of withholding tax
which were not applicable prior to commencement of the Constitution (Twenty-fifth Amendment) Act, 2018 (XXXVII of 2018) shall not apply
to individual domiciled or company and association of persons resident in the Tribal Areas forming part of the Provinces of Khyber
Pakhtunkhwa and Balochistan under paragraph (d) of Article 246 of the Constitution with effect from the 1st day of June, 2018 to the 30th
day of June, 2023 (both days inclusive). [Clause (109A) Part IV, 2nd Schedule]
Page 115 of 166
1[ ]
2[ ]
2 Section 236Y omitted by Finance Act, 2021. Earlier it was inserted by Finance Act, 2018.
236Y. Advance tax on persons remitting amounts abroad through credit or debit or prepaid cards.
(1) Every banking company shall collect advance tax, at the time of transfer of any sum remitted outside Pakistan, on behalf of
any person who has completed a credit card transaction, a debit card transaction, or a prepaid card transaction with a person
outside Pakistan at the rate specified in Division XXVII of Part IV of the First Schedule.
(2) The advance tax collected under this section shall be adjustable.
WITHHOLDING TAX RATES (Double rates applicable on persons not appearing in the ATL)
Adjustable/
Rate
Section Nature of Payment / Transaction Withholding Agent Final/
Minimum
Advance Tax on amount remitted abroad through credit, 1%
236Y Every Banking Company A
debit or prepaid card
EXEMPTIONS, RATE REDUCTION AND CLARIFICATIONS (SECTION 236Y - ADVANCE TAX ON PERSONS REMITTING AMOUNTS ABROAD
THROUGH CREDIT OR DEBIT OR PREPAID CARDS)
The provisions of sections in Division III of Part V of Chapter X and Chapter XII of this Ordinance for deduction or collection of withholding tax
which were not applicable prior to commencement of the Constitution (Twenty-fifth Amendment) Act, 2018 (XXXVII of 2018) shall not apply
to individual domiciled or company and association of persons resident in the Tribal Areas forming part of the Provinces of Khyber
Pakhtunkhwa and Balochistan under paragraph (d) of Article 246 of the Constitution with effect from the 1st day of June, 2018 to the 30th
day of June, 2023 (both days inclusive). [Clause (109A) Part IV, 2nd Schedule]
Page 116 of 166
THE ELEVENTH SCHEDULE of The Sales Tax Act, 1990
1
THE ELEVENTH SCHEDULE
[see sub-section (7) of section 3]
Table
The rates for withholding or deduction by the withholding agent 2[are specified as below provided that
withholding of tax under this Schedule shall not be applicable to the goods and supplies specified vide clauses
(i) to (viii) after the Table]
150ZZH. Application.
(1) This chapter shall apply to taxable goods and services as are supplied to the withholding agents as
specified in the Eleventh Schedule to the Act, for the purpose of deduction and deposit of sales tax.
persons registered as exporters.
(2) This chapter shall also apply to services on which federal excise duty is payable in sales tax mode,
and the ones specified in the Schedule to the Islamabad Capital Territory (Tax on Services)
Ordinance, 2001 (XLII of 2001).
(3) Withholding agent, in case of supplies to Federal or Provincial Government departments, includes
the accounting office which is responsible for making payment against the purchases made by a
government department.
(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,-
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;
(iii) where the purchases are made by the departments falling in purview of Military
Accountant General, the MAG shall account for the amount deducted at source during a
month under the Head of Account "B0234l-Sales Tax" and send intimation to the Chief
Commissioner, Regional Tax Office, Rawalpindi, by the 15th of the following month. The
amount so deducted at source shall be reported by MAG office to AGPR through civil
exchange accounts; and
(b) the concerned Drawing and Disbursement Officer shall prepare the return in the form as set
out in STR-28 for each month and forward the same to the Commissioner having jurisdiction
by the 15th of the following month.
(5) In case of purchases, not covered by sub-rule (4) or sub-rule (6), the sales tax deducted at source
shall be deposited by the withholding agent in the designated branch of National Bank of Pakistan
under relevant head of account on sales tax return-cum-payment challan by 15th of the month
following the month during which the purchase has been made. The return-cum-payment challan
shall be prepared and deposited with the bank in triplicate and the bank shall send the original to
the Commissioner of Sales Tax having jurisdiction, return the duplicate to the depositor and retain
the triplicate for its own record:
Provided that a single return-cum-challan can be filed in respect of all purchases for which the
payment has been made in a month.
(6) In case the withholding agent is also registered under the Sales Tax Act, 1990, or the Federal Excise
Act, 2005, he shall deposit the withheld amount of sales tax along with return filed for the month
in which the purchase was made in the manner as provided in Chapter II, along with other tax
liability:
Provided that in case the withholding agent is not registered for sales tax or federal excise
duty but holds a national tax number assigned under the Income Tax Ordinance, 2001 (XLIX of 2001),
he shall file the return, as set out in STR-28, electronically and deposit the amount deducted at
source in the manner as provided for persons filing returns electronically under rule 18:
Provided further that any other withholding agent may also opt to file the prescribed return
electronically and deposit the deducted amount in the manner as provided in this sub-rule.
(7) The withholding agent shall furnish to the Commissioner of Sales Tax having jurisdiction all such
information or data as may be requested by him for carrying out the purposes of these rules.
(8) A certificate showing deduction of sales tax shall be issued to the supplier by the withholding agent
duly specifying the name and registration number of supplier, description of goods and the amount
of sales tax deducted.
(2) The registered supplier shall file monthly return as prescribed in Chapter II, taking due credit of the
sales tax deducted by the withholding agent, in the manner as prescribed in the return.
(2) The Commissioner shall ensure that the return received from the bank is duly fed in the
computerized system as referred to in clause (5AA) of section 2 of the Sales Tax Act, 1990.
(3) The Commissioner shall periodically ensure that the suppliers mentioned in the return filed by the
withholding agents, as fall under his jurisdiction, are filing returns under Chapter II, and are duly
declaring the supplies made to withholding agents.
1
[]
1 Rule 150ZZL omitted by SRO 918(I)/2019 dated August 07, 2019. Earlier it was:
150ZZL. Exclusions.
(1) The provisions of this Chapter shall not apply to the supplies of the following goods and services if made by a registered
person, namely:-
(i) electrical energy;
(ii) natural gas;
(iii) petroleum products as supplied by petroleum production and exploration companies, oil refineries, oil marketing
companies and dealers of motor spirit and high speed diesel;
(iv) telecommunication services;
(v) goods specified in the Third Schedule to the Sales Tax Act, 1990 (VII of 1990), and the goods on which federal
excise duty is payable in sales tax mode on the basis of retail price;
(vi) supplies made by commercial importers who paid value addition tax on such goods at the time of import as
prescribed under Twelfth Schedule to the Act, and
(vii) Supplies made by an active taxpayer as defined in the Sales Tax Act, 1990 to another registered person with the
exception of advertisement services.
Page 121 of 166
SINDH SALES TAX SPECIAL PROCEDURE (WITHHOLDING) RULES, 2014
GOVERNMENT OF SINDH
Sindh Revenue Board
Karachi, dated 1st July, 2014.
NOTIFICATION
(Sindh Sales Tax on Services)
No. SRB-3-4/14/2014. In exercise of the powers conferred by section 13 of the Sindh Sales Tax on Services
Act, 2011 (Sindh Act No. XII of 2011), read with sub-section (4) of section 3, sub-section (3) of section 9, and
section 72 thereof, the Sindh Revenue Board, with the approval of the Government, is pleased to make the
following rules, namely:--
(2) They shall apply to taxable services as are provided or rendered to following persons, hereby specified
as "withholding agents", for the purposes of deduction and deposit of tax, namely:-
(a) offices and departments of Federal Government, Provincial Governments, and Local or
District Governments;
(c) public sector organizations, including public corporations, state-owned enterprises and
regulatory bodies and authorities;
(d) organizations which are funded, fully or partially, out of the budget grants of the federal or
provincial governments;
1 Clause (f) substituted by notification # SRB-3-4/4/2015 dated July 01, 2015. Earlier it was:
(f) FBR-registered or SRB-registered persons receiving the services of advertisements; and
2 Words inserted by notification # SRB-3-4/18/2016 dated October 07, 2016.
3 Clause (g) substituted and clause (h), (i) & (j) inserted by Notification SRB-3-4/24/2019 dated July 01, 2019. Earlier it was:
(g) SRB-registered persons receiving taxable services from unregistered persons:
Provided that a person shall be treated as a withholding agent, for the purpose of these rules, only if he is resident in
Sindh or has a place of business in Sindh.
Page 122 of 166
(h) SRB-registered persons or insurers (tariff heading 9813A000 and the sub-heads thereof)
receiving or procuring the services provided or rendered by insurance agents or insurance
brokers (tariff heading 9855.0000);
(i) persons or passengers using the services of a cab aggregator (tariff heading 9846.0000)
required to deduct or withhold the tax in relation to the services provided or rendered by
the owners or drivers of the motor vehicles using the services of the cab aggregators (tariff
heading 9846.0000)
(j) persons receiving or procuring such of the services of contractors (tariff heading 9814.2000)
and construction (tariff heading 9824.0000) as are liable to reduced rate of tax at 2% or 5%
under notification No. SRB-3-4/9/2017 dated 2nd June, 2017 or are liable to reduced rate of
tax at 5% under notification SRB-3-4/3/2018 dated 6th February, 2018 and No. SRB-3-
4/8/2013 dated 1st July, 2013.]
(3) They shall come into force with effect from the first day of July, 2014.
2. Definitions.
(1) In these rules, unless there is anything repugnant in the subject or context,-
(1) "Act" means the Sindh Sales Tax on Services Act, 2011 (Sindh Act No. XII of 2011);
(2) "Advertisement" means the taxable services of advertisements classified under tariff heading
98.02 and the sub-heads and descriptions thereunder;
(3) "Board" or "SRB" means the Sindh Revenue Board established under the Sindh Revenue Board
Act, 2010 (Sindh Act No. XI of 2010);
(4) "FBR" means the Federal Board of Revenue established under the Federal Board of Revenue
Act, 2007;
(5) "FBR-registered person" means a person registered with FBR under the Sales Tax Act, 1990, for
the purpose of taxable supply of goods as defined in clause (41) of section 2 thereof and also
means a person holding NTN or taxpayers’ registration or FTN under the Income Tax
Ordinance, 2001 (Ordinance No. XLIX of 2001) or the rules or procedure made thereunder;
(7) "Rules" means the Sindh Sales Tax Special Procedure (Withholding) Rules, 2014;
(8) "SRB-registered person" means a person registered with SRB under the Sindh Sales Tax on
Services Act, 2011, for providing or rendering of taxable services as defined in clause (96) of
section 2 thereof;
(9) "Sales tax" or "Tax" means the Sindh sales tax on services as defined in clause (92) of section 2
of the Act;
(10) "Un-registered person" means a person who is liable to be registered under the Act but is
actually not registered and does not hold a Sindh sales tax registration number (SNTN); and
(11) "Withholding agent" means a person as specified in sub-rule (2) of rule 1 of these Rules
provided that he is resident in Sindh or has a place of business in Sindh1[;
Provided that in relation to the provisions of clause (i) of sub-rule (2) of rule 1 of these
rules, the cab aggregator resident in Pakistan and the branch office or resident representative
Explanation.- The accounting offices responsible for or making payments against invoices/bills for the
taxable services received by an office or department of the Federal Government, Provincial
Governments or Local or District Governments shall be treated as a withholding agent for the purpose
of these rules.
Provided that the withholding agent shall not be responsible to deduct or withhold such
amount of tax as are compulsorily collected against the invoices or bills issued by a SRB registered
service provider in respect of the services of telecommunication, banking company, financial
institution, 1[insurance company (other than a re-insurance company),] 2[in relation to its services of
life insurance and health insurance of individual persons] port operator, airport operator, terminal
operator, and airport ground services.
(2) A withholding agent who is not already registered with SRB as service provider shall electronically
apply for "Sign Up as Withholding Agent" with SRB on Form SSTW-01 upon which SRB shall issue him
a User ID, Password and PIN Code for Sindh sales tax withholding and payment purposes.
(3) A withholding agent, other than a person or a recipient of taxable services covered by clause (f) of
sub-rule (2) of rule 1, shall deduct an amount equal to one-fifth of the total amount of sales tax shown
in the sales tax invoice issued by a registered person and shall make payment of the balance amount
to service provider as per illustration given below,—
3
[Provided that where the invoice issued by the registered person does not indicate the
amount of sales tax, the withholding agent shall deduct and withhold the amount of sales tax, at the
rate applicable to the services provided or rendered to him, from the amount invoiced or billed or
charged by such registered person and, unless otherwise specified in the contract between the service
recipient and the service provider, the amount of sales tax for the purposes of this rule, shall be
worked out on the basis of gross value of the taxable services under the tax fraction formula. However,
this shall not absolve the registered service provider of his liability to the tax and the penalty and
default surcharge thereon, as payable under the Act or the rules made thereunder.]
Provided that in case a withholding agent receives taxable services from an un-registered
person, he shall be responsible to obtain and keep in record a copy of the CNIC of the unregistered
service provider if he is an individual and a copy of the NTN certificate of the unregistered service
provider if he is an AOP or a company. The withholding agent shall also be responsible to enter the
name, CNIC and NTN of the un-registered service, provider correctly in the relevant columns of the
return Form SST-03 or SSTW-03, as the case may be.
(5) A person mentioned in clause (f) of sub-rule (2) of rule 1, who receives the services of advertisement
, auctioneers, renting of immovable property and inter-city transportation or carriage of goods by
road 1[(other than the services of inter-city transportation and carriage of goods through truck addas
or through bus/wagon stands) as are] provided or rendered by a person registered with SRB or by a
non-resident person based in a country other than Pakistan, shall deduct the amount of sales tax as
mentioned in the invoice or the bill issued by the service provider, from the payment due to the
service provider. In case the sales tax amount is not indicated on the invoice, the recipient shall deduct
the amount of sales tax at the applicable rate of tax under the tax fraction formula from the payment
made or to be made to the service provider.
2
(5A) The withholding agents mentioned in clause (g) to clause (j) of sub-rule (2) of rule 1 of these rules shall
deduct and withhold the whole of the amount of Sindh sales tax on the services mentioned in the said
sub-clauses and shall deposit the same in Sindh Government head of account "B-02384" in the
prescribed manner.]
(6) Where the services are received by a withholding agent, as specified in clause (a) of sub-rule (2) of
rule 1 of these rules, the following procedure shall be observed, namely:-
(a) the Drawing and Disbursing Officer (DDO), preparing the bill for payment by the accounting
office, shall indicate the amount of sales tax to be withheld and deducted in terms of these
rules. The accounting office, responsible for making the payment, shall adopt the procedure
as indicated below:
(i) in case of services received by a Federal Government department or office, the office
of the Accountant General of Pakistan Revenue or the District Account Officer or the
Office responsible to make the payment shall deduct and withhold the tax amount
and shall transfer the amount, so deducted at source during a month, to Sindh
Government's head of account "B-02384---Sindh Sales Tax on Services". Intimation
about the withholding and such transfer of Sindh Sales Tax amount shall be sent by
the respective AGPR office to the Member (Taxation), SRB, Karachi, by the 15th day
of the following month;
(ii) in case of services received by departments or offices under the Sindh Government
or District or Local Governments thereof, the Accountant General of the Sindh or the
District Accounts Officer or the Office responsible to make the payment, as the case
may be, shall deduct and withhold the tax amount and credit the amount, so withheld
or deducted at source during a month, to Sindh Government's head of account "B-
02384---- Sindh Sales Tax on Services" and send an intimation about such withholding
1 Bracket and words inserted by Notification SRB-3-4/20/2019 dated June 27, 2019.
2 Sub-rule (5A) inserted by Notification SRB 3-4/24/2019 dated July 01, 2019.
Page 125 of 166
and transfer of tax amounts to the Member (Taxation), SRB, Karachi, by the 15th day
of the following month;
(iii) in case of services received by the departments and offices under a Provincial
Government, other than the Government of Sindh, or the Districts or Local
Governments in Sindh, the Accountant General of that Province or the respective
District Accounts Officer or the Office responsible to make the payment, as the case
may be, shall deduct and withhold the tax amount and shall credit the amount, so
deducted at source during a month, to Sindh Government's head of account "B-
02384----Sindh Sales Tax on Services". Cheque for the amount will be prepared by the
respective Accountant General or District Accounts Officer or the office responsible
to make the payment, as the case may be, in the name of the Member (Taxation),
SRB, Karachi, for debit to the aforesaid head of account and the same shall be sent to
the said Member (Taxation) by the 15th day of the following month; and
(iv) where the services are received by the departments or offices falling in purview of
Military Accountant General (MAG), the MAG shall deduct and withhold the amount
of tax and the amount, so deducted at source during a month, shall be transferred to
Sindh Government's head of account "B-02384----Sindh Sales Tax on Services". The
MAG shall send the intimation (of such deduction/withholding and its transfer to
Sindh Government's aforesaid head of account) to the Member (Taxation), SRB,
Karachi, by the 15th day of the following month. The amount, so deducted at source,
shall simultaneously be reported by MAG office to Accountant General Sindh through
civil exchange accounts; and
(b) the concerned Drawing and Disbursement Officer shall prepare the return in Form SSTW-03
for each month and file the same electronically on e.srb.gos.pk by the 18th day of the month
following the tax period to which it relates.
(7) In case of persons not covered by sub-rule (6) above, the withholding agent shall pay the withheld
amount of sales tax in the Sindh Government's head of account B-02384---Sindh Sales Tax on Services"
against a PSID/Challan prepared in Form SST-04, as prescribed in the Sindh Sales Tax on Services Rules,
2011, or in Form SSTW-04, as prescribed in these rules, by the following due dates: -
(i) in case the withholding agent is registered as a service provider under the Act, by the
prescribed due date of the month in which he claims input tax credit/adjustment in
Annex-A of his tax return (Form SST-03) or the date on which payment is made to the
service provider, whichever is earlier:
Provided that where such a withholding agent does not claim input tax credit
for a period of four months succeeding the month in which the tax invoice was issued
or is not otherwise entitled to claim input tax credit/adjustment, he shall deposit the
withheld amount of tax on the date on which he makes the payment to the service
provider or on a date within four months from the date of the invoice, whichever is
earlier; and
1
[]
(8) In case the withholding agent is also a SRB-registered person under the Act, he shall file the return
and deposit the withheld amount of sales tax in the manner as provided under Chapter III of the Sindh
Sales Tax on Services Rules, 2011, alongwith his other tax liability, and such person shall not be
required to file the return SSTW-03, as prescribed under rule 6 these rules:
Provided that in case the withholding agent is not a SRB-registered person but holds a tax
registration number or NTN or FTN assigned under the Income Tax Ordinance, 2001 (XLIX of 2001), he
shall file the return, as set out in Form SSTW-03 of these rules, electronically, and deposit the withheld
or deducted amount of tax in Sindh Government's head of account "B-02384" against a withholding
challan prescribed in Form SSTW-04:
Provided further that any other withholding agent may also opt to file the prescribed return
electronically and deposit the deducted amount in the manner as provided in this sub-rule.
(9) The withholding agent shall pay default surcharge, as prescribed in section 44 of the Act, in case of
any delay or default in payment of amount of tax withheld or deducted by him or liable to be withheld
or deducted by him and the said amount is not paid in Sindh Government's head of account "B-02384-
-- Sindh Sales Tax on Services" by the due date prescribed under these Rules.
(10) The withholding agent shall furnish to the Officer of the SRB all such information or data as may be
required by him for carrying out the purposes of these rules.
(11) A certificate, in the format set out in Form SSTW-06, showing deduction of sales tax, shall be issued
to the service provider by the withholding agent duly specifying the name and registration number of
service provider, description of services and the amount of sales tax deducted and withheld.
(2) The registered service provider shall ensure that he allows withholding of tax to only such of his
service recipients as are withholding agents in terms of sub-rule (2) of rule 1 of these rules and also
that such service recipients have provided, to the service provider, the prescribed notice in Form
SSTW-05.
(3) The registered service provider shall file monthly return, as prescribed in the Sindh Sales Tax on
Services Rules, 2011, and shall adjust the admissible input tax against the output tax in terms of the
provisions of section 15 of the Act, taking due credit (in his tax return SST- 03) of the amount of sales
tax deducted by the withholding agent, in the manner as prescribed under Chapter III of the said Rules.
(4) Where service provider allows withholding of tax by a person who is not covered by the terminology
"Withholding agent" as defined in clause (11) of rule 2 of these rules, read with sub-rule (2) of rule 1
thereof, the service provider shall be liable to pay the tax involved alongwith the default surcharge
thereon.
7. Repeal.
The Sindh Sales Tax Special Procedure (Withholding) Rules, 2011, issued under notification No. SRB-
3-4/1/2011, dated the 24th August, 2011, is hereby repealed.
(Tashfeen K. Niaz)
Member (taxation)
1 Existing provision numbered as sub-rule (1) by Notification SRB-3-4/18/2020 dated June 29, 2020.
2 Sub-rule (2) inserted by Notification SRB-3-4/18/2020 dated June 29, 2020.
Page 128 of 166
[File.No. SRB -3 -4/TP/1/2014]
NOTIFICATION
No. PRA/Orders.06/2012.-- In exercise of the powers conferred under section 76 of the Punjab Sales Tax on
Services Act 2012 (XLIII of 2012), Punjab Revenue Authority, with the approval of the Government, is pleased
to make the following rules:
2. Definitions.
(1) In these rules:
(a) ‘’Act’’ means Punjab Sales Tax on Services Act 2012 (XLII of 2012);
(b) ‘’active taxpayer” means a registered person borne on the “active tax payers’ list” maintained
under rule 16 of the rules;
(d) “rules” means the Punjab Sales Tax on Services (Withholding) Rules 2015;
(e) “unregistered person” means a person who provides the taxable services to a resident of the
Punjab or is otherwise liable to be registered under the Act but has not been registered with the
Authority; and
(2) A word and expression used herein, but not defined in the rules shall have the meaning as are assigned
to them in the Act and rules made thereunder.
(2) Sub-rule (1) shall not be involved where insurance services are provided form outside the province to
a withholding agent in respect of a risk located in or relating to the province.
“Sales tax to the extent as provided in the rules shall be deducted and withheld from the
payment to be made to the service provider for depositing with Government of the Punjab.”
(a) withhold the whole amount of sales tax shown in the tax invoice, issued by a registered person
as service provider; and
(b) make payment of the balance amount of the invoice to registered person as service provider.
(2) If a withholding agent receives taxable services from an unregistered person, he shall be responsible
to obtain and keep in record:
(a) a copy of computerised national identity card of the unregistered person if he is an individual;
and
(b) a copy of national tax number of the unregistered person assigned under the Income Tax
Ordinance, 2011 (XLIX of 2001) if it is an association of persons or a Company.
(3) The withholding agent shall be required to enter correct information of computerised national
identity card or national tax number of the unregistered person, as the case may be, in the relevant
columns of the statement in Form ‘A’ or form PST -04 , whichever is applicable.
(2) In case where the amount of sales tax is not indicated on the invoice, the amount shall be deducted
by the withholding agent at the applicable rate on the gross value of taxable services from the
payment due to the service provider.
Explanation: “Advertisement” in the rules includes such taxable advertisements’ services as are
classified under the advertisements head 98.02 of the First Schedule of the Act read with all relevant
expressions and descriptions defined under the Punjab Sales tax on services (Definition) Rules 2012.
(a) the Drawing and Disbursing Officer, preparing bill for the accounting officer, shall indicate the
amount of sales tax withheld under the rules and the accounting office shall adopt the
payment procedure as indicated below;
(i) in case of services received by a department or office under the Federal Government,
the office of the Accountant General of Pakistan shall account for and transfer the
amount deducted at source during a month to the Government through a cheque in
the name of the Chairperson of the Authority by credit to the relevant head of
account and send to the Authority by 15th day of the following month;
(ii) in case of services received by a department or an office under the Government; or a
local government, the account General of the Punjab or the District Accounts officer,
as the case may be, shall credit the amount deducted at source during a month to the
Government under due intimation to the chairperson of the Authority;
(iii) in case of services received by a department or an office under any provincial
government other than the Government; or districts or local governments thereof,
the Accountant General of that province or the respective District Accounts Officer
shall credit the amount deducted at source during a month to the Government
through a cheque in the name of the chairperson of the Authority to be sent by 15th
day of the following month to the Authority; and
(iv) if the services are received by a department or an office falling under the purview of
Military Accountant General, the Military Accountant General shall deposit the
amount deducted at source during a month with the Government under intimation
to the Chairperson of the Authority by 15th day of the following month and the
amount, so deducted at source, shall simultaneously be reported by Military
Accountant General to the Accountant General of the Punjab through civil exchange
accounts; and
(b) the concerned Drawing and Disbursement Officer shall prepare the statement as per Form ‘A’
for each month and forward the same to the Chairperson of the Authority by 15th day of the
following month.
(2) If taxable services are not covered under sub-rule (1), the withholding agent shall deposit the withheld
amount of sales tax with the Government on the form PST-04 as prescribed in the Punjab Sale Tax and
Services (Filing of Returns) Rules 2012 on the following due dates:
by the prescribed due date in the month following the tax period in which he claims
input tax adjustment in his Punjab sales tax return or the date on which payment is
made to the services provider on a date within four months from the date of the
invoice, whichever is earlier;
(b) in case the withholding agent is an unregistered person but is registered with the Federal
Board of Revenue under the Sale Tax Act, 1990 (VII of 1990):
(i) by 15th day of the month following the period in which he claims input tax adjustment
in the federal sale tax return as prescribed by the Federal Board of Revenue; or
(ii) by the date on which payment is made to the service provider or on a date within
four months from the date of the invoice, whichever is earlier; and
9. Filing of statement.
(1) If the withholding agent is a registered person, he or it shall file the standard return in the Form PST-
04 as prescribed in the Punjab Sales Tax and Service (Filing of Returns) Rules 2012 and deposit the
withheld amount of sales tax in the prescribed manner along with other tax liability, if any,
(2) A withholding agent shall not be required to file the statement on the Form ‘A’ if he or it falls under
sub-rule (1),
(3) in case the withholding agent is an unregistered person but holds a national tax number assigned
under the Income Tax Ordinance, 2001 (XLIX of 2001), he or it shall file a statement as on the Form
‘A’ and deposit the amount deducted at source in the prescribed manner.
(4) in case the withholding agent is neither registered person nor holds a national tax number assigned
under the Income Tax ordinance, 2001 (XLIX of 2001), he or it shall file a statement as on Form ‘A’ and
deposit the amount deducted at source in the prescribed manner.
(5) The return or the statement required to filed in pursuance of the rules may be filed either
electronically or manually through courier, post or otherwise.
(6) Where the withholding agent needs to revise the statement, resulting in payment of tax over the tax
already paid on the original statement, he or it may, without any permission from the Commissioner,
file his or its revise statement and pay the differential amount of tax along with the default surcharge
as applicable.
(7) The Commissioner shall be competent to allow revision of statement not covered under sub-rule (6)
and all such permissions for revision of statement shall be reported to the Authority on monthly basis
on the format showing the name, name of withholding agent, relevant tax period, revenue (including
adjustment) effect of revision and principal reasons of revision.
(2) Failure to furnish such information or data as required under sub-rule (1) shall render the withholding
agent liable to penal action under serial Nos. 5 and 11 of the Table of subsection (2) of section 48 of
the Act.
(a) duly specifying the name and registration number of the service provider, if any;
(b) description and value of services;
(c) total amount of sales tax charged on the services; and
(c) total amount of tax deducted.
(2) A copy or copies of every or all such certificate or certificates, described in the sub-rule (1), shall be
sent to the Authority on monthly basis.
(2) If a registered person allows withholding of tax by a person who is not a withholding agent, the
registered person shall be liable to pay the tax along with the default surcharge payable on the tax.
(3) No recovery under sub-rule (2) shall be made unless the person concerned has been provided with an
opportunity of being heard but nothing in this rule, shall restrain or otherwise disable the officer of
the Authority or an authorised officer in this behalf to make recovery of tax in case of deliberate non-
appearance.
(2) Notwithstanding anything to the contrary contained in any other provision under the rules or any
other rules, no adjustment or credit shall be admissible to the persons registered under the Act in
case of the tax deducted or withheld and paid in respect of advertisement services.
(2) If at the time of recovery of tax under sub-rule (1), it is established that the tax which was to be
deducted from the payment made to a person has meanwhile been paid, no recovery shall be made
from the person who had failed to withhold or deduct the tax but the said person shall be liable to
pay default surcharge at rates specified in section 49 of the Act form the date he failed to collect of
deduct the tax to the date the tax was paid.
(3) A person personally liable for an amount of tax under clause (a) of sub-rules (1) as a result of failing
to collect or deduct the tax shall be entitled to recover the tax from the person from whom the tax
should have been withheld or deducted.
(4) The provisions of the Act and the rules made thereunder shall apply to any amount required to be
paid to the Government under the rules as if it were tax payable under the Act.
(2) The Authority may, constitute a three member committee headed by an officer not below the rank of
Commissioner, to consider cases of hardship or cases where there is significant risk to revenue, to give
its recommendations to the Authority to either conditionally or otherwise in circumstances of special
nature relax or specify the application of these rules in any case or class of cases.
(2) The active taxpayers’ list shall be regulated by such terms and conditions as may be specified and
declared by the Authority.
(2) The tax withheld or liable to be withheld or payable under the repealed rules shall be deemed to have
been withheld or liable to be withheld under these rules and shall be paid and dealt with accordingly.
Withholding Agent:
Name: _______________________________________________________________________________
____________________________________
Category: (mention the number of sub-clause_______ of clause (f) of sub-rule (1) of rule 2)
Status of Service Provider (Please relevant option):
Registered / Unregistered
Contact (Tel / Cell): _______________ E-mail: _____________________
Period NTN/FTN
Sr. Name of NTN/ FTN/ or Description No. and Value Amount of Amount
No. Service CNIC of the date of Tax (excluding Punjab of Punjab
Provider whichever is services Invoices/ Sales Tax) of Sales Tax Sales Tax
applicable involved Commercial the Services Invoiced or Withheld
Invoices Involved or Involved
Gross Amount
of Commercial
Invoice
We deducted/withheld the following amount of Punjab sales tax on services provided to us by M/S
_______________________________________ (PNTN/NTN) ______________________________ or
CNIC ____________________________________
Sr. Tax Tax Value of Amount Amount Tax period CPR NO. (“P-1” Remarks,
No. Invoice Invoice taxable of tax of tax of the Tax series) & date in if any
No Date services involved withheld/ return / which the deducted
deducted withholding /withheld tax
return in amount was
which this included in
tax was payment under
paid, by the Punjab’s Govt’s
services head of account “B-
recipient 02385”
(1) (2) (3) (4) (5) (6) (7) (8) (9)
This certificate is issued in pursuance of rule 11 of the Punjab Sales Tax on Services (Withholding) Rules,
2015.
Signature ______________________________
Name _________________________________
CNIC __________________________________
Designation ____________________________
NOTIFICATION
Dated Peshawar, the August 13, 2020
(2) It shall apply to the withholding agents receiving taxable services in, for or in respect of the province
of Khyber Pakhtunkhwa (for use, consumption, enjoyment or for any other purpose therein).
(3) It shall take effect on and from the first day of September 2020.
2. Definitions.
(1) In this regulation, the following words and terms shall have meanings assigned to them hereinafter:
(i) “Act” means the Khyber Pakhtunkhwa Finance Act, 2013 (XXI of 2013);
(ii) “Authority” means the Khyber Pakhtunkhwa Revenue Authority citable as KPRA or Authority
and includes its offices and officials while performing their official duties as employees of the
Authority.
(iv) “Head of Account” means the Head of Account under detailed object B-02386 Sales Tax on
services, Khyber Pakhtunkhwa wherein all the withheld tax amounts are to be deposited with
or transferred to the Provincial Consolidated Fund (Government);
(v) “Paragraph” means paragraph of this regulation and sub-paragraphs, clauses or items shall
be construed and referred to accordingly;
(vii) “Taxable service” means a service taxable under the Second Schedule of the Act and includes
the services which has been clarified of confirmed as taxable by the Authority through any
form of communication;
(ix) “Withholding agent” means withholding agent as specified in paragraph 3 of this regulation
regardless of the location of his or its head office or location of the business premises or
jurisdiction of his its registration or enrolment
Explanation: For the purpose of this definition, it is clarified that the expression “withholding
agents” shall include their respective accounting offices which are responsible for authorizing
payments against the taxable services received by them.
(2) The words and terms used but not defined in this regulation shall have the same meanings and
interpretations as are assigned to them under the Act and rules or regulations made thereunder so
far as they are applicable or relevant to this regulation.
i. All Federal Government Departments and offices etc, who submit their bills (including payments
made in respect of projects) for pre-audit to the accountant General Pakistan Revenue (AGPR), its
Sub-offices and District Accounts Offices.
ii. The Departments and Offices of the Ministry of Defense who either submit this bills (including
bills in respect of projects) for pre-audit or compiled accounts of the Services Controllers and
Regional Controllers of the Military Accountant General.
iii. All others Federal government departments, i.e., Director Budget and Accounts (PAK PWD), Chief
Accounts Officer (Pakistan Railways), Director Accounts (Pakistan Post Office), Central Directorate
of National Savings who submit this monthly compiled accounts to AGPR.
iv. All Departments and Offices of the Government including District Government Departments who
submit their bills for pre-audit of the Accountant General Khyber Pakhtunkhwa or the District
Accounts Offices.
v. All Provincial Government Departments including District Government Departments who submit
their bills (including payments made in respect of projects) for pre-audit to the respective
Accountants General (AG) of the Province and District Accounts Offices.
vi. Environment Department of the Government who submits compiled accounts to the Accountant
General Khyber Pakhtunkhwa.
vii. All Divisional Engineers of the Departments of irrigation, Public Health Engineering and
Communication & Works including the Local and District Government Departments who submit
accounts on the prescribed form to the Accountant General Khyber Pakhtunkhwa.
viii. All public sector organizations, institute, corporations, universities, bodies, boards, Provincial,
District or Local Government including special purpose institutions, whether their official status,
character or position is pure government, semi-government, public, semi-public, autonomous,
ix. Companies as defined under sub-section (12) of section 2 of Act including those located in the
jurisdiction of or registered with any other tax authority for the purposes of payment of sales tax
in respect of goods or services rendered or provided in the province of Khyber Pakhtunkhwa.
x. Any other person specified, declared or confirmed by the Authority as withholding agent.
(2) The withholding agent, intending to purchase, acquire or receive taxable services in or for the
province, shall invariably indicate in the relevant advertisement, notices including prequalification or
tender notices, booking order or any other similar document, made or given in any mode or form, for
such purpose, that sales tax to the extent as provided in this regulation shall be deducted and withheld
from the payment to be made to the service provider and deposited in the Government Head of
Account No. B-02386 Sales Tax on services, Khyber Pakhtunkhwa.
Explanation: As and when need arises for the audit of the propriety of due payments of withholding
tax amounts by the government departments, public sector organizations or accounts offices etc
during any financial year, the Authority may, instead of conducting audit at its own level, require them
of their self-audit of such tax amounts and payment thereof and to furnish and audit report along
with a certificate to the Authority as to the propriety of the withholding tax amounts and payments
thereof and such audit shall be deemed to be an audit by the Authority provided that nothing shall
bar the Authority for any verification, investigation or re-audit on this account;
Provided that nothing shall restrict bar the Authority to conduct or cause to be conducted audit of
any withholding agent and all provisions of the Act and rules, regulations or other orders, instructions
or guidelines issued thereunder, relating to the audit and allied matters, of a registered person shall,
mutatis mutandis, apply on the audit of withholding agents.
(ii) Services provided by persons either not registered with the Authority or if registered, are
inactive/non-active as per Active Taxpayers’ List of the Authority as available on its official
website,
(iv) Services provided in the province of Khyber Pakhtunkhwa by persons from outside the
province if such persons are not registered with the Authority, and
(v) Services liable to tax under the Act at reduced rate (less than the standard rate of 15%).
(2) Under no circumstances, tax adjustment shall be admissible in case of withholding made on services
chargeable to reduced rate of tax or received from unregistered persons or inactive persons:
Clarification: Reduced rate of tax includes the fixed rate of tax or the tax paid or payable on
fixed basis.
Provided that where such a withholding agent does not claim input tax credit for a period of six
months succeeding the month in which the tax invoice was issue or is otherwise nit entitled to claim
input tax credit/adjustment for the reasons of non-availability of proof of payment, he shall deposit
the withheld or withholdable amount of tax on the date on which he makes the payment to the service
provider or by the last day of the said six months from the date of invoice, whichever is earlier.
(2) If a withholding agent is not registered with the Authority as a service provider under the Act but is
registered with FBR under the Sales Tax Act 1990, the withheld tax amount shall be deposited by the
prescribes due date of the month in which he claims input tax credit/adjustment in Annex-A of his
monthly sales tax return as prescribed by the FBR, or the date on which payment is made to the service
provider, whichever is earlier:
Provided that where such a withholding agent does not claim input tax credit/adjustment for a period
of six months succeeding the month in which the tax invoice was issued or is otherwise not entitled
to claim input tax credit /adjustment for the reasons of non-availability of proof of payment, he shall
deposit the withheld or withholdable amount of tax on the date on which he makes the payment to
the to the service provider or by the last day of the six months from the date of invoice, whichever is
earlier.
(2) If a withholding agent is not registered with Authority as a service provider under the Act but is
registered with FBR under the Sales Tax Act 1990, the withheld tax amount shall be deposited by the
prescribed due date of the month in which he claims input tax credit /adjustment in Annex-A of his
monthly sales tax return as prescribed by the FBR, or the date on which payment is made to the service
provider, whichever is earlier:
(3) In case of other withholding agents, not covered by sub-paragraphs (1) and (2) above, the withheld
tax amount shall be deposited by the 15th day of the following month in which payment is made to
the service provider.
(2) Subject to sub-paragraph (3), a person who is not already registered with the Authority as a regular
tax payer but is required to comply as withholding agent shall apply (for registration as withholding
agent) with the Authority upon which he shall be electronically allocated user identification, password
and personal identification number for the provincial sales tax withholding purpose and such person
may subsequently, if legally or otherwise legitimately required for any valid reasons, apply to the
Authority for deregistration as withholding agent and every such deregistration shall be subject to
due completion of the legal requirements, if any:
Provided that under no circumstances, the responsibility of any person as withholding agent shall be
effected or mitigated in the absence of registration or other system user-related particulars as
aforesaid and any amount of tax withheld by such person shall be deposited with the Government in
the manner prescribed in this regulation.
(3) The public sector withholding agents making tax payments through competent in house accounting
offices (self-accounting entities), shall obtain FTN from FBR (if not already obtained) and online apply
to the Authority for enrolment as withholding agent to get user ID. Password for the purposes of
payment of tax through PSID and CPR and for e-filing of the withholding statements to the Authority.
(4) The public sector withholding agents making payments through external accounting offices, shall
obtain FTN in terms of sub-paragraph (3) only for the purpose of e-filing of withholding statements
after enrolment with and after obtaining or issuance of password from the Authority.
(5) The provisions of section 43 read with all other relevant provisions of the Act shall mutatis mutandis
apply to the cases where withholding agent is required to be registered (including enrolled) has not
complied with the registration or other identical requirements under this regulation.
10. Procedure for accounting and deposit of withheld amount of sales tax on services under different
accounting systems of the federal and provincial Governments.
(1) The Drawing and disbursing Officers (DDOs), while preparing the bill for payment by the accounting
office, shall indicate the amount of sales tax to be withheld in terms of this regulation. The accounting
office, responsible for making the payment shall adopt the procedure as specified below:
(i) In case of acquisition of taxable services by the withholding agents falling in paragraph 3(1)(i),
the Accountant General Pakistan Revenue its Sub-offices or District Accounts Offices, while
making payment, shall deduct from the payable amount, the amount of provincial sales tax
and credit the amount so deducted during a calendar month to the Head of Account “G-12777
Sales Tax on Services deduction at source under Khyber Pakhtunkhwa sales Tax on Services
(Withholding) Regulation, 2020”. The amount so credited during a month shall be transferred
to Accountant General Khyber Pakhtunkhwa through civil exchange account in the following
(ii) In case of acquisition of taxable services by withholding agents falling in paragraph 3(1)(ii),
the Military Accountant General, the Service Controllers and regional Controllers, while
making payment, shall deduct from the payable amount, 12777 Sales Tax on Services
deduction at source under Khyber Pakhtunkhwa Sales Tax on Services (Withholding)
Regulation, 2020”. The amount so credited during a month shall be transferred to Accountant
General Khyber Pakhtunkhwa through civil exchange account in the following month for
credit to the Head of Account B-02386 Sales Tax on Services Khyber Pakhtunkhwa and
intimation to that effect shall be sent to KPRA by 15th of the following the month
(iii) In case of the withholding agents falling in paragraph 3(1)(iii), the respective chief Accounts
Officers/ Director Budget 7 Accounts shall credit the amount deducted by his office to the
Head of Account “G-12777 Sales Tax in Services deduction at source under Khyber
Pakhtunkhwa Sales Tax on Services (Withholding) Regulation, 2020”. The amount so credited
during a month shall be transferred to Accountant General Khyber Pakhtunkhwa through civil
exchange account in the following month for credit to the Head of Account B-02386 Sakes Tax
on Services Khyber Pakhtunkhwa and intimation on this account shall be sent to KPRA by 15th
of the following month.
(iv) In case of acquisition of taxable services by withholding agents falling in paragraph 3(1)(iv),
the Accountant General Khyber Pakhtunkhwa or the District Accounts Officers while making
payment, shall deduct from the payable amount the amount provincial sales tax and account
for the amount deducted at source during a month to the Head of Account “B-02386 Sales
Tax on Services Khyber Paktunkhwa” deduction at source under Khyber Pakhtunkhwa Sales
Tax on Services (Withholding) Regulation, 2020”. The Accountant General Khyber
Pakhtunkhwa shall send an intimation in this regard to the Authority by 15th of the following
month.
(v) In case of acquisition of taxable services by withholding agents falling in paragraph 3(1)(v),
the Accountant General of the respective province shall credit the amount deducted at source
under Khyber Pakhtunkhwa Sales Tax on Services (Withholding) Regulation, 2020”. The
amount so collected, deducted and credited during a month shall be transferred to
Accountant general Khyber Pakhtunkhwa through civil exchange account in the following
month for credit to the Head of Account B-02386 Sales Tax on Services Khyber Pakhtunkhwa
and send intimation on this account shall be sent to KPRA by 15th of the following month.
(vi) In case of acquisition of taxable services by withholding agent falling under paragraphs 3(1)(vi)
and 3(1)(vii), the concerned Drawing and Disturbing Officer, while making payment, shall
deduct from the payable amount, the amount of provincial sales tax and account for in the
monthly account. The amount so deducted shall be deposited to the Head of Account “B-
02386 Sales Tax on Services Khyber Pakhtunkhwa”.
(vii) In case of acquisition of taxable services by the withholding agents falling in paragraph
3(1)(viii), who are making payments directly at their own level through their own level through
their internal accounting systems, the concerned Drawing and Disturbing Officers shall be
responsible to deduct and deposit the amount of tax in time with Government through CPR
(after first generating PSID as per system-based process).
(2) Where under any emergency or exceptional circumstances, any accounting office finds it difficult or
impractical to make payment as aforesaid, it may deposit the tax through a cheque or cheques with
the authorized bank branch (National Bank of Pakistan) in the relevant head of account at its own
level under intimation to the Director General of the Authority or alternatively it may send such
(3) Each of the accounting office or as the case may be, withholding agent referred to in sub-para (1) of
this paragraph, shall within fifteen days of the issuance of this regulation inform the Collector of the
Authority about the name, designation and official telephone number (beside mobile number, if
available) of its/his officer/official responsible or deputed to make deductions and deposit of
provincial sales tax amounts on its/his behalf so that the Collector of the Authority may maintain a
regular facilitative coordination with such officer/official for smooth compliance to this regulation.
(4) For each month, the concerned Drawing and Disbursing Officer of the withholding agent shall
electronically prepare and file a withholding statement by the 20th of the following month.
REITERATION NOTE: For the purpose of charity and emphasis, it is reiterated that the head of account
for the purpose of payment or deposit of Khyber Pakhtunkhwa sales tax on services with the
Government of Khyber Pakhtunkhwa is “detailed object B-02386 Sales Tax on Services , Khyber
Pakhtunkhwa” wherein all the withheld tax amounts are to be deposited with the Government as
prescribed under this regulation.
--- a copy of the National Identity Card (CNIC) from an unregistered individual service provider, or
--- National Tax Number (NTN) issued under the Income Tax Ordinance, 2001 (XLIX of 2001) in case
the unregistered service provider is partnership or a company.
(2) The information about the NIC and NTN shall be provided to the Authority through the very next
statement, declaration, return filed under or in pursuance of or for the purpose of this regulation.
Provided that if the service provider is not registered with the Authority, he shall be stated as
unregistered and where such service provider is not registered with the Authority but is registered
with other sales tax jurisdictions, the number of the registration and the name of the registering tax
authority shall be mentioned.
(2) For the purpose of this regulation the failure to file a monthly statement thereunder shall be treated
as failure to file a monthly return and shall be liable to penal action or penalty accordingly
(2) The registered taxpayers (service providers) of the Authority who have provided taxable services to
the withholding agents and their tax has been withheld and deposited by such agents, shall be entitled
to avail admissible credit/adjustment of the tax, so deducted only on the basis of withholding
certificates issued to them by the concerned withholding agents.
(3) While the obligation of the registered taxpayers of the Authority for the Maintenance of records is
principally governed under section 48 of Act, the withholding agents shall similarly maintain all
relevant records and documents of all their withholding transactions including invoices, proofs of tax
payments, statements and withholding certificates etc for a period of five years.
(4) Every withholding agent shall be under legal obligation to cooperate with and provide free access to
the records and documents maintained or kept by him under this regulation to the authorized officer
of the Authority not below the rank of Assistant Collector, for the purpose of any verification,
inspection, audit or for any other official purpose and produce copies thereof as and if so required by
such officer.
(5) Where any difficulty arises in giving effect to any of the provisions of this regulation, the Director
General of Authority may direct such solution-oriented actions to be done as may be considered
appropriate, plausible and necessary to remove such difficulty.
(6) Where any special or exceptional circumstances so warrant, the Director General of Authority may,
for reasons to be recorded in writing, exempt any service provider or class of service providers from
the application of this regulation and allow the collection and payment of tax directly by the
concerned service provider or as the case may be, service providers.
(7) The provisions of the rules, regulations, notifications, general orders or notices or clarifications issued
under the Act, shall apply to the extent of matters and issues not specifically covered under this
regulation.
16. Repeal:
The Khyber Pakhtunkhwa Sales Tax on Services Special Procedure (Withholding) Regulation, 2015
shall stand repealed from the date coming into effect of this regulation.
-sd-
Director General
Khyber Pakhtunkhwa Revenue Authority
Distribution:
1. Secretary Finance Department, Government of Khyber Pakhtunkhwa.
2. PSO to the Finance Minister, Khyber Pakhtunkhwa.
GOVERNMENT OF BALOCHISTAN
BALOCHISTAN REVENUE AUTHORITY
Quetta, the June 27, 2018
NOTIFICATION
No. BRA/BSTW/06/2018, Dated June 27, 2018. -- In exercise of the powers conferred by section 78 read
with section 14 of the Balochistan Sales Tax on Services Act, 2015 (Act No. VI of 2015), the Balochistan
Revenue Authority with the approval of the Government, is pleased to make the following rules, namely: -
(2) They shall apply to the taxable services that are provided or rendered to the following persons,
hereby specified as "withholding agents", for the purpose of deduction and deposit of tax, namely:
-
(a) offices and departments of Federal Government, Provincial Governments, Local or District
Governments, and a public-sector project or programme governed by such Governments;
(b) autonomous bodies;
(c) public sector organizations including public corporations, state-owned enterprises,
regulatory bodies and authorities;
(d) organizations which are funded, fully or partially, out of the budget grants of the Federal
Government or Provincial Governments;
(e) companies as defined in sub-rule (7) of rule 2 of these rules;
(f) FBR-registered persons or BRA-registered persons or the persons specified in clauses (a),
(b), (c), (d) and (e) of sub-rule (2) of rule 1 of these rules who receive or procure the services
of Advertisement (Tariff Heading 98.02), Intercity transportation or carriage of goods by
road (Tariff Heading 9804.1000); Advertising agent (Tariff Heading 9805.7000), Renting of
immovable property (Tariff Heading 9806.3000), Consultant (Tariff Heading 98.15) and
Auctioneer (Tariff Heading 9819.9000); and
(g) BRA-registered persons receiving taxable services from un-registered persons:
Provided that a person shall be treated as a withholding agent, for the purpose
of these rules, only if he is resident in Balochistan or has a place of business in Balochistan.
Page 151 of 166
Explanation: The accounting office responsible for making payments against
invoices / bills for the taxable services received by an office or department of the Federal
Government, Provincial Governments, Local or District Governments and public projects
shall also be treated as a withholding agent for the purpose of these rules.
(3) They shall extend to the whole Province of Balochistan.
(4) They shall come into force with effect from the first day of July, 2018.
2. Definitions.
In these rules, unless there is anything repugnant in the subject or context-
(1) "Act” means the Balochistan Sales Tax on Services Act, 2015 (Act No.VI of 2015);
(2) “Advertisement” means the taxable services of advertisements classified under tariff heading 98.02
and the sub-heads and descriptions thereunder;
(3) “Auctioneer” means a person providing or rendering the services in relation to auction of property,
whether movable or immovable and tangible or intangible, in any manner, classified under tariff
heading 9819.9000.
Explanation: Auction of property includes calling the auction or providing facility, advertising
or illustrative services, pre-auction price estimates, short term storage services, repairs and
restoration services in relation to auction of property;
(4) "Authority" or "BRA" means the Balochistan Revenue Authority established under the Balochistan
Revenue Authority Act, 2015 (Act No. VII of 2015);
(5) "BRA-registered person" means a person registered with BRA for providing or rendering of taxable
services;
(5) “Bank” means the National Bank of Pakistan or any of its branches designated, by notification in the
official Gazette, for the purpose of payment of tax;
(a) a company as defined in the Companies Act, 2017 (Act No. XIX of 2017);
(b) a banking company and foreign banking company as defined in the Banking Companies
Ordinance, 1962 (Ordinance No. LV1I of 1962), and includes anybody corporate which
transacts the business of banking in Pakistan;
(c) a non-banking finance company (NBFC) and the notified entities as specified in section 282A
of the Companies Ordinance, 1984 (Ordinance No. XLVII of 1984), read with the Non-Banking
Finance Company (Establishment and Regulation) Rules, 2003;
(d) a body corporate formed by or under any law in force in Pakistan;
(e) a modaraba company as defined in the Modaraba Companies and Modaraba (Floatation
and Control) Ordinance, 1980 (Ordinance No. XXXI of 1980);
(f) a financial institution as defined in the Financial Institutions (Recovery of Finances) Ordinance,
2001 (Ordinance No. XLV1 of 2001), including a microfinance institution licensed under the
Microfinance Institutions Ordinance, 2001 (Ordinance No. LV of 2001) and an Islamic financial
institution;
(g) a body incorporated by or under the law of a country outside Pakistan relating to
incorporation of companies;
(h) a trust, a co-operative society or a finance society or any other society established or
constituted by or under any law for the time being in force; or
(i) a foreign association, whether incorporated or not, which the Authority has, by general or
special order, declared to be a company for the purposes of the Act;
(7) “Computerized payment receipt” means a computer-generated receipt showing payment of tax to
the designated branch of the National Bank of Pakistan;
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(8) “FBR" means the Federal Board of Revenue established under the Federal Board of Revenue Act,
2007 (Act No. IV of 2007);
(9) "FBR-registered person" means a person registered with FBR under the Sales Tax Act, 1990, for the
purpose of taxable supply of goods as defined in sub-section (41) of section 2 thereof and also means
a person holding Balochistan Sales Tax Registration Number (BNTN), and NTN or FTN under the
Income Tax Ordinance, 2001 (Ordinance No. XLIX of 2001) or the rules or procedure made thereunder;
(11) “Government dues” means recoverable amounts of sales tax, penalty, default surcharge or any other
amount of tax, duty or levy collectable under the Act or rules made thereunder and against the
recovery of which there is no bar or valid stay order from the competent court;
(13) “Recovery officer” means an officer of the Authority, authorized by the Commissioner for recovery
of Government dues;
(14) “Renting of immovable property” means and includes the renting, letting, sub-letting, leasing, sub-
leasing, licensing or similar other arrangements of immovable property for use in the course or
furtherance of business or commerce, but does not include-
(a) the term “for uses in the course or furtherance of business or commerce”
includes the use of immovable property as factories, offices including
Government offices or public offices, warehouses, laboratories, educational
institutions, shops, showrooms, retail outlets, multiple-use buildings, etc.;
(i) building and part of a building and the land or space appurtenant
thereto;
(ii) land or space incidental to the use of such building or part of a
building;
(iii) common or shared areas and facilities relating to the property
rented;
(iv) vacant land or space given on lease or license for construction or
temporary structure to be used at a later stage for furtherance of
business or commerce; or
(v) plant, machinery, equipment, furniture, fixture or fitting installed in
or provided in or attached to the immovable property; and
(d) the term “rent” means any payment or consideration, by whatever name
called, received or receivable under any lease, sub-lease, tenancy or any
other contract or agreement or arrangement for use, occupation or right to
use or occupy any immovable property, and includes any forfeited deposit
paid under such lease, sub-lease, tenancy or other contract or agreement or
arrangement;
(15) “Rule” means the Balochistan Sales Tax Special Procedure (Withholding) Rules, 2018;
(17) “Service” or “services” means anything which is not goods and shall include but not limited to the
services listed in the First Schedule to the Act.
Explanation-I: A service shall remain and continue to be treated as service regardless whether
or not the providing thereof involves any use, supply, disposition or consumption of any goods either
as an essential or as an incidental aspect of such providing of service;
Explanation-II: Unless otherwise specified by the Authority, the service or services involved in
the supply of goods shall remain and continue to be treated as service or services;
(18) “Service provider” means a person who is engaged in the provision or providing of service or
services in the course or furtherance of any economic activity;
(a) the sales tax, additional tax or default surcharge levied under the Act;
(b) a penalty, fine or fee imposed or charged under the Act; and
(c) any other sum payable or recoverable under the provisions of the Act or the rules made
thereunder;
(20) ‘‘Taxpayer” means any person who, in the course of an economic activity, provides taxable services
for consideration and includes any person who is liable or is required to pay or is paying tax or any
sum under the Act or the rules made thereunder;
(21) “Taxable service” shall have the same meaning given to it under section 3 of the Act;
(22) “Transportation or carriage of goods” means the transportation or carriage of goods from one place
to another either by road or through pipeline or conduit, including the services of cargo handling like
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loading, unloading, packing, un-packing, stacking and storage of goods, classified under tariff heading
9804.1000;
(23) "Un-registered person" means a person who is liable to be registered under the Act but does not
hold a Balochistan Sales Tax Registration Number; and
(24) "Withholding agent" means a person as specified in sub-rule (2) of rule 1 of these rules.
Explanation: The words and expressions used but not defined in any provision of these rules,
shall have the same meaning as assigned to them under the Act and the Balochistan Sales Tax on
Services, Rules, 2018.
(2) A withholding agent who is not already registered with the Authority as service provider shall
electronically apply for "Sign-Up as Withholding Agent" to the Authority in Form BSTW-01 and the
Authority shall issue him a User ID, Password and PIN Code for Balochistan sales tax withholding and
payment purposes.
(3) A withholding agent, other than a recipient of the taxable services covered by clause (f) of sub-rule
(2) of rule 1 or a person receiving the taxable services from non-filers, shall deduct an amount equal
to one-fifth of the total amount of sales tax shown in the sales tax invoice issued by a registered person
and shall make payment of the balance amount to service provider as per illustration given below:
Illustration-
Provided that where the invoice issued by the registered person does not indicate the
amount of sales tax, the withholding agent shall deduct and withhold the amount of sales tax, at the
rate applicable to the services provided or rendered to him, from the amount invoiced or billed or
charged by such registered person and, unless otherwise specified in the contract between the service
recipient and the service provider, the amount of sales tax for the purposes of this rule, shall be
worked out on the basis of gross value of the taxable services under the tax fraction formula.
However, this shall not absolve the registered service provider of his liability to the sales tax and the
penalty or default surcharge thereon, as payable under the Act or the rules made thereunder.
Provided that in case a withholding agent receives taxable services from an un-registered
person, he shall be responsible to obtain and keep in record a copy of the CNIC of such un-registered
service provider if he is an individual and a copy of the NTN certificate if it is an AOP or a company.
The withholding agent shall also be responsible to enter the name, CNIC and NTN of the un-registered
service provider correctly in the relevant columns of the return Form BST-03 or BSTW-03, as the case
may be.
(5) The persons mentioned in clause (f) of sub-rule (2) of rule 1, receive or procure the services of
advertisement, intercity transportation or carriage of goods by road, advertising agent, renting of
immovable property, consultant and auctioneer as are provided or rendered by a person registered
with the Authority or by an un-registered person resident of Balochistan or by a non-resident person
based in a country other than Pakistan, shall deduct the amount of sales tax as mentioned in the
invoice or the bill issued by the service provider, from the payment due to the service provider. In
case the sales tax amount is not indicated on the invoice, the service recipient shall deduct the amount
of sales tax at the applicable rate of tax under the tax fraction formula, from the payment made or to
be made to the service provider.
(6) Where the services are received by a withholding agent, as specified in clause (a) of sub-rule (2) of
rule 1 of these rules, the following procedure shall be observed, namely: -
(a) the Drawing and Disbursing Officer (DDO), preparing the bill for payment by the accounting
office, shall indicate the amount of sales tax to be deducted and withheld in terms of these
rules. The accounting office, responsible for making the payment, shall adopt the procedure
as indicated below: -
(i) in case of services received by a Federal Government department or office, the office
of the Accountant General of Pakistan Revenue or the District Account Officer or the
Office responsible to make the payment shall deduct and withhold the tax amount
and shall transfer the tax amount, so deducted or withheld at source during a month,
to the Balochistan Government's head of account "B-02387-Balochistan Sales Tax on
Services". Intimation about the withholding and such transfer of Balochistan Sales
Tax amount shall be sent by the respective AGPR office to the Authority, by the 15th
day of the following month;
(iv) Where the services are received by the departments or offices falling in purview of
Military Accountant General (MAG), the MAG shall deduct and withhold the amount
of tax and the tax amount, so deducted or withheld at source during a month, shall
be transferred to the Balochistan Government's head of account “B-02387-
Balochistan Sales Tax on Services". The MAG shall send intimation (of such
deduction/withholding and its transfer to Balochistan Government's aforesaid head
of account) to the Authority, by the 15th day of the following month. The tax amount,
so deducted or withheld at source, shall simultaneously be reported by MAG office
to the Accountant General Balochistan through civil exchange accounts; and
(b) the concerned Drawing and Disbursement Officer shall prepare the return in prescribed Form
BSTW-03 for each month and file the same electronically on https://bra.gob.pk, by the 18 th
day of the month following the tax period to which it relates.
(7) In case of persons not covered by sub-rule (6) above, the withholding agent shall pay the withheld
amount of sales tax in the Balochistan Government's head of account “B-02387-Balochistan Sales Tax
on Services” against a PSID/CPR/Challan prepared in Form BSTW-04, as prescribed in these rules, by
the following due dates: -
(a) in case the withholding agent is registered as a service provider under the Act, by the
prescribed due date of the month in which he claims input tax credit/adjustment in Annex-A
of his tax return (Form BST-03) or the date on which payment is made to the service provider,
whichever is earlier:
Provided that where such a withholding agent does not claim input tax credit for a
period of four months succeeding the month in which the tax invoice was issued or is not
otherwise entitled to claim input tax credit/adjustment, he shall deposit the withheld amount
of tax on the date on which he makes the payment to the service provider or on a date within
four months from the date of the invoice, whichever is earlier; and
(b) in case of withholding agents, not covered by clauses (a) of this sub-rule, by the 15th day of
the following month in which the tax invoice was issued by the service provider or the date
on which payment is made to the service provider, whichever is earlier.
(8) In case the withholding agent is a BRA-registered person, he shall file the return electronically and
deposit the withheld amount of sales tax in the manner as prescribed under Chapter-III of the
Balochistan Sales Tax on Services Rules, 2018 along with his other tax liability, and such person shall
not be required to file the return BSTW-03, as prescribed under rule 6 of these rules:
Provided that in case the withholding agent is not a BRA-registered person but holds a
National Tax Number (NTN) assigned under the Income Tax Ordinance, 2001 (XLIX of 2001), he shall
file the return, as set out in Form BSTW-03 of these rules, electronically, and deposit the deducted or
withheld amount of sales tax in the Balochistan Government's head of account "B-02387-Balochistan
Sales Tax on Services" " against a withholding challan prescribed in Form BSTW-04:
Provided further that any other withholding agent may also opt to file the prescribed return
electronically and deposit the deducted or withheld amount of sales tax in the manner as provided in
this sub-rule.
(9) The withholding agent shall pay default surcharge, as prescribed in section 49 of the Act, in case of
any delay or default in the payment of sales tax so deducted or withheld by him or liable to be
deducted or withheld by him, in the Balochistan Government's head of account "B-02387-Balochistan
Sales Tax on Services" by the due date prescribed under these rules.
(11) A certificate, in the format set out in Form BSTW-06, showing deduction of sales tax, shall be issued
to the service provider by the withholding agent duly specifying the name and registration number of
service provider, description of services, invoice number and date of invoice and the amount of sales
tax deducted and withheld.
(12) The authority may de-register a registered withholding agent not required to be registered under
the Act in the manner as prescribed: -
(a) The withholding agent who ceases to provide taxable service or is no more required to be
registered, shall apply to the Authority, through an application on prescribed Form BSTW-02.
The Authority after causing such inquiries or audit by an officer of the Authority as deemed
appropriate, shall de-register such withholding agent from such date as may be specified,
subject to payment of all dues outstanding against such withholding agent. All orders for de-
registration, passed under this rule, shall be placed on BRA’s website and shall also be
communicated to PRAL within three days from the date of such order; and
(b) The application for de-registration shall be disposed of within a period of ninety days from
the date of receipt of application, or within such extended period, not exceeding sixty days,
as the Authority may, for reasons to be recorded in writing, fix.
(2) The registered service provider shall ensure that he allows withholding of sales tax to only such of his
service recipients as are withholding agents in terms of sub-rule (2) of rule 1 of these rules and also
that such service recipients have provided, to the service provider, the prescribed notice in Form
BSTW-05.
(3) The registered service provider shall file monthly return, as prescribed in the Balochistan Sales Tax on
Services Rules, 2018 and shall adjust the admissible input tax against the output tax in terms of the
provisions of section 16 of the Act, taking due credit, in his return, of the amount of sales tax deducted
by the withholding agent, in the manner as prescribed in Chapter-III under the Balochistan Sales Tax
on Services Rules, 2018.
(4) Where the service provider allows withholding of sales tax by a person who is not covered by the
definition of "Withholding agent" under these rules, the service provider shall be liable to pay the
sales tax involved along with the default surcharge thereon.