KARACHI: The business industry has recommended the tax machinery to repeal the law of collection of advance tax under section 236G by which manufacturers and commercial importers are collecting 0.1 percent tax of the gross value of sales from wholesalers which is resulting in cash flow problems.
The business industry informed that Section 236G was introduced to the Income Tax Ordinance, 2001 through the Finance Act 2013 in which every manufacturers or commercial importers of electronics, sugar, cement, iron and steel products, fertilizers, motorcycles, pesticides, cigarette, glass, textile, beverages, paint or foam are required to collect tax to distributors, dealers and wholesalers.
It is highlighted that deduction of tax from distributors, dealers and wholesalers as adjustable advance tax in excess of their tax liability for the year which creates a perpetual refundable position for the distributors. It is resulting in financing charges.
Moreover, the business industry has also suggested that collection of advance tax under Section 236H should be deleted in which manufacturers, distributors, dealers and wholesalers or commercial importers are collecting 0.5 percent tax from retailers.
Through the Finance Act, 2013 Section 236H was introduced to the ITO, 2001 where the manufacturers, distributors, dealers and wholesalers or commercial importer of electronics, sugar, cement, iron, and steel products, fertilizers, motorcycles, pesticides, cigarettes, glass, textile, beverages, paint or foam are required to collect tax from the gross value of sales to retailers.
Budget proposals 2014-2015: law for collection of advance tax from wholesalers, retailers must be repealed
