AMENDMENT IN SALES TAX SPECIAL PROCEDURE (WITHHOLDING) RULES 2007.

Federal Government has issued SRO 98(I)/2013 dated 14.02.2013 vide which amendments have been made in the Sales Tax Special Procedure (Withholding) Rules, 2007. Now (i) all companies as defined under the Income Tax Ordinance, 2001; and (ii) all persons registered as exporters are now required to deduct 1/5th of the total sales tax shown in their purchase sales tax invoices issued by a registered person and deposit the same to the government. Previously, only persons registered in LTU were required to deduct 1% of the value as withholding tax. The notification is effective from 14.02.2013. It is, therefore, advised to strictly follow the notification to avoid any objections in future by the department.