Federal Board of Revenue

LETTER FROM LETTER FROM S.M. LAW ASSOCIATES, ADVOCATES & TAX CONSULTANTS, KARACHI TO FEDERAL BOARD OF REVENUE (Re: Amendments notified in the Sales Tax Special Procedure (Withholding) Rules, 2007, through S.R.O. 98(1)/2013 dated 14-2-2013) Muhammad Raza Baqir, Additional Secretary, Ministry of Finance, Economic Affairs, Statistics & Revenue Division, Federal Board of Revenue, Islamabad. SUBJECT: AMENDMENTS NOTIFIED IN THE SALES TAX SPECIAL PROCEDURE (WITHHOLDING) RULES, 2007, THROUGH S.R.O.98(I)/2013 DATED 14-2-2013. Dear Sir, We understand that with the amendments introduced through Notification S.R.O.98(I)/2013 dated 14-2-2013. The Sales Tax Special Procedure (Withholding) Rules, 2007:-- (a) Require the Withholding Agents falling under substituted clause (d) and added clause (1) of rule 1(2) thereof, to deduct an amount equal to one-fifth of the total Sales Tax as shown in the sales tax invoice issued by a registered person for the taxable goods supplied on or after 14-2-2013. Previous reference/citation in this context is in relation to amending S.R. O. 603(I)/2009 as allowed by the FBR through S.R.O.719(I)/2009 dated 11-8-2009 read with the ST Circular No.4 of 2009 dated 31-7-2009 and decisions given by FBR the minutes of the meeting issued vide C. No.3(10)ST L&P/2007 (Pt) dated 17-8-2009; and (a) Do not enquire all the Withholding Agents (specified under clauses (a), (b), (c), (d), (e) & (1) of rule 1(2) thereof) to withhold or deduct Sales Tax on receipt of any of the taxable services (including services of advertisements), on which sales tax is being collected by the provisions of Sindh and Punjab through their legislation enacted under Sindh Sales Tax on Services Act, 2011 and Punjab Sales Tax on Services Act, 2012, respectively, besides also keeping in view that under the said Laws the registered recipients of said taxable services are required to withhold amount of provincial Sales Tax and deposit the same in respective provincial jurisdictions, which is evidently confirmed by the FBR letter C. No. 1/23-STB/2010(Pt) dated 27-7-2012, by withdrawing earlier letter C.No./1-23- STB/2010(Pt)17775-R dated 30-12-2011. We request your honor that our aforesaid view points may kindly be confirmed at the earliest, however, deemed to be as such the Withholding Agents specified under above said rules shall continue to act in the manner as narrated in our aforesaid viewpoints, till your kind confirmation is received.