Taxation for Online Market Place

Taxation for Online Market Place via Section 3(7): Person(s) engaged in buying taxable goods or services are exclusively recognized as withholding agent under Section 3(7) of the Sales Tax Act, 1990 [the Act]. On the other hand, online market place platform(s) was declared as withholding agent at Serial No. 8 of Eleventh Schedule to the Act.

The above anomalous position needs to be catered through necessary amendment at the Act. By virtue of Amendment Ordinance, a proviso has been inserted at Section 3(7) of the Act whereby such online market place platform are prescribed as withholding agent
who facilitate sales of third-party goods through digital mode.

Consequent to such aforesaid insertion at the Act, online market platform do have legitimate status to be withholding agent. Further, FBR should incorporate relevant entries at its return portal enabling such persons to file sales tax withholding statements without any hassle.

Certain amendments through third amendment ordinance and this Ordinance shall be called the Tax Laws (Third Amendment) Ordinance, 2021.

For more information on FBR’s new regulations / circulars/ SROs/ amendments in taxation laws in Pakistan please visit https://www.fbr.gov.pk/

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