ISLAMABAD (July 06 2005): The Central Board of Revenue (CBR) has given option to the companies to avail the concessionary scheme introduced for retailers of textiles and other sectors to pay 3 percent combined concessionary tax including one percent income tax and three percent sales tax.
However, income tax paid by companies under this scheme will be treated as advance tax, adjustable against their final tax liability.
According to an income tax circular issued on Tuesday, a new section 113B has been inserted in the Income Tax Ordinance 2001, whereby a retailer of textile fabrics and articles of apparel including readymade garments or fashion wear, articles of leather including footwear, carpets, surgical goods and sports goods, having annual turnover exceeding Rs 5 million for a 'tax year' shall pay final tax at the rate of 1 percent of the turnover as determined by the sales tax department. This tax shall form part of the single stage sales tax at the rate of 3 percent of the turnover.
This concession, which is only for an individual or an AOP, shall be available w.e.f. tax year 2006, and the taxpayer shall be required to file only a statement under section 115(4). Income Tax paid by companies under this scheme will be treated as advance tax adjustable against their final tax liability.
It has been clarified that this provision shall be applicable only in case of retail sales of commodities mentioned above.
A retailer dealing in other commodities as well will have to file a separate return under normal law for that component of income.