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Rate of Tax on Sale to Distributors, Dealers and Wholesalers

 Federal Board of Revenue (FBR) has updated rate of advance income tax on sale to distributors, dealers and wholesalers during tax year 2021 (July 01, 2020 to June 30, 2020).

The FBR issued Income Tax Ordinance, 2001 (updated up to June 30, 2020) after incorporating amendment brought through Finance Act, 2020.

The FBR updated the rate of advance income tax on sale to distributors, dealers and wholesalers under Section 236G of Income Tax Ordinance, 2001.

The rate of collection of tax under section 236G shall be at 0.7 percent on sale of fertilizers and 0.1 percent on sale of other than fertilizers/

The text of section 236G is as follow:

Section 236G. Advance tax on sales to distributors, dealers and wholesalers

(1) Every manufacturer or commercial importer of electronics, sugar, cement, iron and steel products, fertilizer, motorcycles, pesticides, cigarettes, glass, textile, beverages, paint or foam sector, at the time of sale to distributors, dealers and wholesalers, shall collect advance tax at the rate specified in Division XIV of Part IV of the First Schedule, from the aforesaid person to whom such sales have been made.

(2) Credit for tax collected under sub-section (1) shall be allowed in computing the tax due by the distributor, dealer or wholesaler on the taxable income for the tax year in which the tax was collected.

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