KARACHI: The Federal Board of Revenue (FBR) has barred the withholding agents from adjusting input tax on purchases and advised the agents to deposit the sales tax withheld in the government exchequer immediately.
The SRO 485(I)/2015 states that presently, the withholding agents are required to deposit sales tax to be withheld by them along with the return for the tax period (month), in which they make payment for the purchases to their suppliers. But on the other hand, they adjust input tax on such purchases immediately.
It is provided that except for the government sector withholding agents, all other withholding agents should deposit the sales tax amount to be withheld along with the return for the tax period in which purchase is made.
The SRO further said that the petroleum dealers of HSD and Petrol are excluded from purview of withholding. Exclusion to certain products like mild steel products, paper in rollers or sheets, plastic products including pipes is withdrawn.
However, persons in steel sector paying sales tax under special procedure, except those who pay sales tax on ad valorem basis, shall continue to be excluded from provisions of withholding tax.