Accountancy Forum

I have a question regarding excess witholding tax being deducted.

On import, 4% Witholding Tax is deducted. Then, on sale of goods, another 3.5% Witholding Tax is deducted. In order to save the 3.5% WHT deduction on sales, a bill of entry is demanded by customers, which the importer cannot provide because it contains import rates/etc.

An exemption certificate is also not given to Commercial importers. Therefore, what can one do to save on the 3.5% WHT?

As far as I know, an undertaking is provided by the importer and that is sufficient. No withholding tax should be deducted. The company being supplied the goods should have no qualms because they have the undertaking. If they still do then there should be a legal way of stopping this.

First of all u should collect exemption certificate U/S 153 for Imported goods, If your customer has been deducted WHT U/S 153 on Imported goods, you can claim refund for that amount.

How can one get the exemption certificate?
Would it have any effect if i also trade locally, because then 3.5% would be deductable?

Thanks for your help.

Getting a refund is a near impossible task. Even if you are lucky enough to get it, the FBR people demand 30% as bribe.

Undertaking is given but many customers still want the Bill of Entry. As proof, they cite Circular 05 of 2002 dated 11/04/2002 which states that the payer may require furnishing of import document such as original Bill of Entry.

This is an unfair law wherein the commercial importer pays 4% at import stage and 3.5% at sales stage.