SRO 603

THe Business community has already shown his concern that implementation of the said sro shall only increase business cost and not going to help the FBR in any way to generate any additional income as expected by them.

On the other hand the enforcement of SRO from June 25, 2009 has led to raised many queries which are yet to clarify by the FBR as detailed hereunder:

1-In case of supplies made to LTU taxpayers. by the Manufacturers and retailers whose turnover is below thresholdand are not liable for registration, What evidences they are required to submit to the large tax payer unit for non deduction of Withholding sales Tax?

2-Weather Unpaid bills of taxable goods/services acquired before the date and settled after the issuance of the SRO might be attracting withholding of sales tax or not?

3.Despite the fact that the unregistered persons could not issue tax invoices, the SRO prescribed adjustment of sales tax so deducted from the output tax due. But how a person registered in LTU will adjust this deduction made from the unregistered person with out observing requirements of section 7 of the Sales Tax Act, 1990?

4.The withholding agents are facing hardships to determine whether the subject goods/services are taxable and at what rate would the tax be deducted. Therefore, the FBR should inform the LTUs about the specifications of such items/supplies to effectively deal with the sales tax withholding issues.

5.What is the position of withholdingtax on Supply of goods specified in the Third Schedule to the Act which are subject to sales tax at retail price.

6.Are these rules are applicable on goods and sevices subject to the Federal Excise Duty collectable in sales tax mode?

7 While making deduction from payment made to unregistered person, formula of tax fraction as defined under section 2(36) of the sales tax Actis applicable or not?

8.Format of certificate of tax deduction to be issued by a withholding agent is not prescribed sofor.

9-Minium limit like income tax for the deduction of withholding sales tax still not prescribed by the FBR.