Payments for goods, services and contracts Section 153 and 159

Payments for goods, services and contracts Section 153 and 159

Payments for goods, services and contracts Section 153 and 159: At present the Commissioner may, on application made by the recipient of a payment may allow in cases where tax deductible is not minimum, by an order in writing, any person to make the payment without deduction of tax. However, no time period was prescribed for issuance of the said certificate prior to the Finance Act, 2020.

Furthermore, said section also bounds the Commissioner to issue the exemption certificate to Public Listed Companies in case of payment on account of goods, within 15 days if advance tax liability has been discharged and in case it is not issued then it would be deemed to be issued to said company.

Now the bill has extended the scope of this provision of issuance of exemption certificate within 15 days to every company.

By virtue of said amendment, every company could take the advantage of this provision. In this regard, respective provisions have also been provided under section 159 for the purpose of uniform application of both sections.

Moreover, presently there are no reduced rate of withholding income tax on payments made to traders of yarn by the taxpayers specified in the zero-rated regime of sales tax (as provided under clause (45A) of Part-IV of the Second Schedule under sub section 5 of the Section 153.

The Finance Bill has proposed to withdraw this exemption.

By virtue of this amendment now traders of yarn would fall under clause 45A and would be subject to withholding of tax at the rate of 1% after fulfilling the conditions specified therein.

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