Tax Book 2023

Deduction / Payment of Tax Chapter- 23

3. Supply of goods making payments on account of goods by the payer.


4. All exporters of goods making payments on account of goods exported are exempted from deduction of tax.


5. Tax at source shall be deducted from gross amount of sale of goods.
   6.^ Provision of this section is not applicable to the following:^
   (i) Sales made by importer of the goods if he has paid the tax u/s 148 at the time of the import and the goods are sold in the same condition.
   (ii) Payments to traders of yarn specified in the zero-rated regime of sales tax

(iii) refund of any security deposit

(iv) Payment made by the government or a local government to a contractor for construction materials supplied to the contractor by the

government or local government

(v) Purchase (by a modaraba, leasing company, banking company or financial institution) of an asset under a lease and buy back agreement.

(vi) Any payment for securitization of receivables by a SPV to the originator.

7. Tax deducted u/s 153 shall be minimum tax on the income of a resident person from the following transactions:

(i)^ Sale of goods^
(ii) Rendering or providing of service
(iii) Execution of contracts and

(iv) Rendering of services of stitching, dying, printing, embroidery, washing, sizing and weaving to an exporter or export house

8. For companies rendering or providing of services, tax deducted shall not be treated as final tax.


9. Tax deducted u/s 153 shall not be treated as final tax in respect of payment received on account of:

(i) Advertisement services, by owner of newspaper and magazines.
(ii) Sale of goods and execution of contracts by a public company listed on registered stock exchange in Pakistan; and the rendering or providing
services.
(iii) Tax deducted while making payment for services u/s 153(1)(b) shall be the minimum tax. Provided that

(i) where the excess tax is not wholly adjusted, the amount not adjusted shall be carried forward to the following tax year and adjusted

against tax liability under the aforesaid Part for that year, and so on, but the said excess shall not be carried forward to more than

five tax years immediately succeeding the tax year for which the excess was first paid; and

(ii) tax deducted under clause (c) of sub-section (1) in respect of a sportsperson shall be minimum tax with effect from tax year 2020 ; and

(iv) tax deducted under clause (b) of sub-section (1) by person making payments to electronic and print media for advertising services shall be

minimum tax with effect from the 1

st

July, 2019.

REDUCTION IN TAX RATES U/S 153 UNDER VARIOUS CLAUSES OF PART II OF SECOND SCHEDULE TO THE INCOME TAX ORDINANCE,

2001:

Sr. UNDER

CLAUS

E

Reduction in Tax Rates

1. 24C 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, fertilizer, electronics excluding mobile phones, sugar,
   cement, Steel 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 ATL issued under the provisions of the Sales Tax Act,
   1990 and the Income Tax Ordinance, 2001: