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 Sales Tax (SRO 603)
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Farhan2009
Unregistered Trainee

Pakistan
27 Posts

Posted - Jul 02 2009 :  11:22:15 AM  Show Profile
Salam to all,
Any body have read SRo 603(I)/2009 regarding the withholding agent? Now LTU companies has been included in withholding agent. Any LTU Unit making purchases from Unregistered persons will deduct sales at the applicable rete and deposit the same and claim input.
MY QUESTION IS HOW IT IS POSSIBEL IN CASE OF CASH AND PETTY PURCHASES TO DEDUCT SALES TAX AT THE APPLICABLE RATE? DONTYOU THINK ITS SIMPLY A BURDON ON LTUs?

ONE MORE THING IS THERE ANY SALES TAX ON ADVERTISEMENT SERVICES RECEIVED BY THE COMPANIES?
ANYBODY WILL TELL ME THE REFERNCE ON WHICH SERVICES SALES TAX APPLIES?

hi_toall
Unregistered Trainee

7 Posts

Posted - Jul 07 2009 :  2:51:54 PM  Show Profile
Please reply this is question is very important many are facing practical difficulty
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LapTop
Partner

Pakistan
1545 Posts

Posted - Jul 09 2009 :  12:35:14 PM  Show Profile  Visit LapTop's Homepage  Send LapTop a Yahoo! Message
THE SALES TAX SPECIAL PROCEDURES RULES, 2007
CHAPTER VI

SPECIAL PROCEDURE FOR PERSONS PROVIDING OR RENDERING SERVICES SUBJECT TO SALES TAX UNDER THE PROVINCIAL LAWS.

PART.- 1


ADVERTISEMENTS ON TELEVISION AND RADIO


36. Scope and value.— (1) In relation to advertisements, the expression “taxable services” means the services in respect of advertisements—

(a) broadcast or telecast by TV or radio stations based in Pakistan;

(b) booked in Pakistan for broadcasting or telecasting on TV or radio stations based abroad, whether or not possessing landing rights in Pakistan; and

(c) transmitted on closed circuit T.V. or cable T.V. network.]

(2) “Value of taxable service” for the purposes of levy of sales tax shall be the total consideration in money received or the gross amount charged by a service provider from his clients for broadcasting or telecasting of any advertisement on radio or television, including all Federal and Provincial levies but excluding the amount of sales tax.

37. Input tax adjustment by the client.— A registered person (client) whose advertisement is released on radio or television, and to whom the sales tax invoice is issued and routed through the advertising agency, can claim input tax adjustment for the amount of tax paid on account of release of advertisement on radio or television subject to the observance and fulfilment of following conditions, namely:-

(a) payments for all such advertisements are made by such registered person through Banking channels in such manner that payment against a particular invoice is easily verified;

(b) all invoices issued by the service provider are in accordance with the specimen invoice set out at Annex-B;
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Shafiq
Unregistered Trainee

Pakistan
3 Posts

Posted - Jul 21 2009 :  08:55:22 AM  Show Profile  Send Shafiq a Yahoo! Message
It is not for all purchases, it only applicabel for Advertisement services renderd by LTU from unregistered persons.


quote:
Originally posted by Farhan2009

Salam to all,
Any body have read SRo 603(I)/2009 regarding the withholding agent? Now LTU companies has been included in withholding agent. Any LTU Unit making purchases from Unregistered persons will deduct sales at the applicable rete and deposit the same and claim input.
MY QUESTION IS HOW IT IS POSSIBEL IN CASE OF CASH AND PETTY PURCHASES TO DEDUCT SALES TAX AT THE APPLICABLE RATE? DONTYOU THINK ITS SIMPLY A BURDON ON LTUs?

ONE MORE THING IS THERE ANY SALES TAX ON ADVERTISEMENT SERVICES RECEIVED BY THE COMPANIES?
ANYBODY WILL TELL ME THE REFERNCE ON WHICH SERVICES SALES TAX APPLIES?

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Farhan2009
Unregistered Trainee

Pakistan
27 Posts

Posted - Jul 31 2009 :  11:54:18 AM  Show Profile
Dear Mr. Shafique,

It is for your kind information that any person who is registered under sales tax department then he will come in the definition of Withholding agent.

quote:
Originally posted by Shafiq

It is not for all purchases, it only applicabel for Advertisement services renderd by LTU from unregistered persons.


quote:
Originally posted by Farhan2009

Salam to all,
Any body have read SRo 603(I)/2009 regarding the withholding agent? Now LTU companies has been included in withholding agent. Any LTU Unit making purchases from Unregistered persons will deduct sales at the applicable rete and deposit the same and claim input.
MY QUESTION IS HOW IT IS POSSIBEL IN CASE OF CASH AND PETTY PURCHASES TO DEDUCT SALES TAX AT THE APPLICABLE RATE? DONTYOU THINK ITS SIMPLY A BURDON ON LTUs?

ONE MORE THING IS THERE ANY SALES TAX ON ADVERTISEMENT SERVICES RECEIVED BY THE COMPANIES?
ANYBODY WILL TELL ME THE REFERNCE ON WHICH SERVICES SALES TAX APPLIES?



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LapTop
Partner

Pakistan
1545 Posts

Posted - Jul 31 2009 :  7:42:37 PM  Show Profile  Visit LapTop's Homepage  Send LapTop a Yahoo! Message
hereby specified as withholding agents, for the purpose of deduction and deposit of sales tax, namely:--
(a) federal and provincial government departments;
(b) autonomous bodies;
(c) public sector organizations;
(d) taxpayers as fall in the jurisdiction of Large Taxpayers Units for the purpose of sales tax, federal excise duty or income tax; and
(e) recipients of service of advertisement, who are registered for sales tax.
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Omeir
Junior

Pakistan
74 Posts

Posted - Aug 06 2009 :  10:29:21 AM  Show Profile
(3) A withholding agent, including a person registered in a Large Taxpayers Unit and a recipient of advertisement services, who purchases goods and services from unregistered person, shall deduct sales tax at the applicable rate of the value of taxable supplies made to him from the payment due to the supplier:
Provided that a person registered in a Large Taxpayers Unit shall be entitled to adjustment of sales tax so deducted by him from the output tax due, subject to the conditions specified in sections 7, 8, 8B and 73 of the Sales Tax Act, 1990, and the rules made thereunder.


The above referes to a part of the SRO. Does it mean that any withholding agent who cannot adjust the sales tax will not deduct the sales tax? Please reply urgently
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LapTop
Partner

Pakistan
1545 Posts

Posted - Aug 06 2009 :  1:35:08 PM  Show Profile  Visit LapTop's Homepage  Send LapTop a Yahoo! Message
According to this Para,

Any withholding agent who purchases goods and services from unregistered person, shall deduct sales tax at the applicable rate of the value of taxable supplies made to him from the payment due to the supplier:

Exemple:
Value of Supplies: 100,000/-
Withholding amount @ 16%:- 16,000/-
Agent Shell pay to supplier:- 84,000/-

Other Then LTU any withholding Agent shell pay withheld amount to FBR along with sales tax return for withholding Agents.

LTU shell file just sales tax return and this withheld amount put in column number 18.
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Farhan2009
Unregistered Trainee

Pakistan
27 Posts

Posted - Aug 18 2009 :  09:23:53 AM  Show Profile
Well Mr laptop,
this is an ideal case, you withheld the amount of supplier and pay the sales tax. What will be the procedure if LTU taxpayer bear the cost as the un registered are not ready for deduction on the other side they will increase the cost and the ultimate burdon is on LTUs. can the LTUs claim input if they pay the amount like this???????and how it will be claimed in Sales tax return?????

Value of Supplies: 100,000/-
Withholding amount @ 16%:- 16,000/-
Agent Shell pay to supplier:- 100,000/-
i am waiting for yor expert advise MR. Laptop.
Regards,
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noman
Senior

Pakistan
451 Posts

Posted - Oct 20 2010 :  9:32:56 PM  Show Profile
quote:
Originally posted by Omeir

(3) A withholding agent, including a person registered in a Large Taxpayers Unit and a recipient of advertisement services, who purchases goods and services from unregistered person, shall deduct sales tax at the applicable rate of the value of taxable supplies made to him from the payment due to the supplier:
Provided that a person registered in a Large Taxpayers Unit shall be entitled to adjustment of sales tax so deducted by him from the output tax due, subject to the conditions specified in sections 7, 8, 8B and 73 of the Sales Tax Act, 1990, and the rules made thereunder.






is the part highlighted in Red still applicable or has it been withdrawn?

if applicable, then my question is this:

what is being talked here is that an LTU person should deduct sales tax FROM payment made BY him.......but in provisio it is said that the LTU will be entitled to adjustment of this tax from his output tax...how is it possible that a person is deducting a tax from someone else and then claiming it as an adjustment from his own output?
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olympia
Manager

Pakistan
619 Posts

Posted - Oct 22 2010 :  11:20:51 AM  Show Profile
noman just read the SRO # 704 may b it is helpful 4 u

http://www.fbr.gov.pk/dotnet/customs/admin/sroFiles/Sales%20Tax/2009/2009SRO704.pdf
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olympia
Manager

Pakistan
619 Posts

Posted - Oct 22 2010 :  11:34:51 AM  Show Profile
amendments in SRO # 603& 704 through SRO # 846

http://www.fbr.gov.pk/dotnet/customs/admin/sroFiles/Sales%20Tax/2009/2009SRO_st.pdf
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LapTop
Partner

Pakistan
1545 Posts

Posted - Oct 22 2010 :  2:53:06 PM  Show Profile  Visit LapTop's Homepage  Send LapTop a Yahoo! Message
SRO 603 download kar layn ye update hay ab tak.


http://www.2shared.com/document/MZIsBOKg/THE_SALES_TAX_SPECIAL_PROCEDUR.html

Edited by - LapTop on Oct 22 2010 2:55:57 PM
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olympia
Manager

Pakistan
619 Posts

Posted - Oct 23 2010 :  09:26:43 AM  Show Profile
thnks laptop bhai :)
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