Value of supplies: Tax on online marketplaces to be applicable from Sep 1

ISLAMABAD: The Federal Board of Revenue (FBR) has notified September 1, 2021 as the effective date for applicability of two percent sales tax of the gross value of supplies on online market places.

The FBR Wednesday 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.

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 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.

Under the Finance Act 2021, the provisions of this entry shall be effective from the date as notified by the board.

Importers: FBR to relax conditions for obtaining 'UUIs'

Now the FBR has notified the date for this is purpose. Now the board has issued notification for effective date of sales tax on supplies through online market place

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

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

The two percent sales tax of gross value of supplies would be applicable on the online market place (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.

Copyright Business Recorder, 2021