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FBR Notifies Applicability Date of Sales Tax For Online Marketplaces

The Federal Board of Revenue (FBR) has notified September 1, 2021, as the effective date for applicability of the 2% sales tax of the gross value of supplies on the online marketplace.

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The FBR on Wednesday issued S.R.O984(I)/2021 for the imposition of Withholding Tax on the online marketplace under the eleventh schedule to the Sales Tax Act, 1990.


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From September 1, 2021, the online market places facilitating the supply of goods owned by third-party suppliers are required to withhold sales tax at the rate of 2% of the gross value of supplies made by persons other than active taxpayers.

According to the notification, S.R.0.90 (1)12021.— In exercise of the powers conferred by sub-section (7) of section 3 of the Sales Tax Act, 1990, read with proviso to the entry in column (4) against S. No. 8 in the Eleventh Schedule to the said Act, the Federal Board of Revenue is pleased to direct that the provisions of S. No. 8 of the Eleventh Schedule to the Sales Tax Act, 1990 shall be effective from September 1, 2021, it added.

Under the Finance Act 2021, the provisions of this entry shall be effective from the date as notified by the Board. Now, the FBR has notified the date for this purpose and issued a notification for an effective date of sales tax on supplies through the online marketplace.


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The Federal Board of Revenue (FBR) has defined that the “online marketplace” would cover e-commerce platforms, portals, or similar means, which facilitate the sale of goods, including third-party sale.

According to the Finance Act 2021, the “online marketplace” includes an electronic interface such as a marketplace, e-commerce platform, portal or similar means, which facilitate the sale of goods, including third party sale by controlling the terms and conditions of the sale; authorizing the charge to the customers in respect of the payment for the supply; or ordering or delivering the goods.

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The 2% sales tax of the gross value of supplies would be applicable on the online marketplace (persons other than active taxpayers), provided that the provisions of this entry shall be effective from the date as notified by the board, the Finance Act 2021 added.

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