Two percent tax on online marketplaces to be applicable from September 1

According to Business Recorder, the FBR issued SRO 984(I)/2021 for the imposition of withholding tax on online market place under the eleventh schedule to the Sales Tax Act, 1990.

The online market places assisting the supply of goods owned by third-party suppliers will have to withhold sales tax at the rate of two percent of gross value of supplies made by persons other than active taxpayers.

According to the notification, SR090 (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 FBR 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.

The “online market place” would cover e-commerce platform, portal or similar means, which facilitate sale of goods, including third-party sale.