Non-ATL retailers will pay double the fixed tax amount

ISLAMABAD: Small retailers or traders have to pay double the amount of the fixed tax if not on the Active Taxpayer List (ATL).

The federal government, through the 2022 budget bill, has introduced a fixed tax regime for small retailers.

However, the National Assembly approved the bill with some changes to the fixed tax regime. The 2022 finance law now obliges the small retailer to register with the tax service and be on the list of active taxpayers (ATL) in order to benefit from the fixed tax facility.

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Otherwise, in the event of non-appearance on the ATL, the small trader is required to pay one hundred percent more on the amount of the lump sum tax.

In order to collect the tax under this scheme, the government decided to recover the amount through the electricity bill.

In this regard, certain amendments have been made to the Sales Tax Act 1990 and the Income Tax Order 2001.

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In Subsection 9, Section 3 of the Sales Tax Act 1990, a new provision was inserted into the Finance Act 2022 which stated:

“Provided that the above rates of taxation shall be increased by one hundred per cent if the name of the person does not appear on the list of active taxpayers published by the Council under section 181A of the Ordinance on income tax from 2001 to the date of publication of the monthly electricity bill order.”

Similarly, a new Section 99A was inserted into the Income Tax Ordinance 2001 and approved by the Finance Act 2022, which reads as follows:

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“99A. Special provisions relating to the payment of the tax by electrical connections.

(1) Notwithstanding anything in the Ordinance, tax shall be charged and collected from retailers other than Tier I retailers as defined in the Sales Tax Act 1990 (VII of 1990) and from suppliers of specified services on commercial electrical connections at the rates provided. in clause (2A) of Section IV, Part IV of the First Schedule.

(2) A retailer who has paid sales tax under subsection (9) of section 3 of the Sales Tax Act 1990 (VII of 1990) is not liable to pay tax under of this section and the sales tax so paid constitutes a discharge from tax under this section.

(3) The tax levied or paid under this section is a definitive tax on the income of the persons referred to in this section in respect of commercial activities carried on from the premises where the electrical connection is installed.

(4) For the purposes of this section, the Board, with the approval of the responsible minister, may issue a general income tax order for:

(a) provide the scope, timing, payment, collection, penalty, default surcharge, adjustment or refund of tax payable under this section in such manner and on such terms as may be specified.

(b) maintain records, filing, reporting and valuation in such manner and on such terms as may be specified;

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(c) provide a mechanism for the collection, deduction and payment of tax in respect of any person; Where

(d) include or exempt any person or class of persons, income or class of income from the application of this section, in such manner and under such conditions as may be specified. »

The rate of tax payable under section (99A) and recoverable under subsection (1A) of section 235 is as follows:-

Gross monthly invoice amount Tax
When the amount does not exceed Rs. 30,000 Rs. 3000
When the amount exceeds Rs. 30,000 but does not exceed Rs. 50,000 Rs.5000
When the amount exceeds Rs. 50,000 but does not exceed Rs. 100,000 Rs. 10,000
Retailers and service providers specified through the General Income Tax Ordinance 50,000 rupees

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