You all must be aware and already knew that with increasing inflation in every aspect. Government has also made some new policies for Filing taxes. As being a seller, you know some percent of your revenue goes into government taxes. Mainly named under Sales tax. Every article sold by you will be charged with a fee according to the product category, price, province and the local government rules in the area. Not paying your taxes is a legal crime. And the authorities is way more clear in this manner. You must know these policies to avoid any possible consequences in future and also to price your goods accordingly.
Being an online seller, Daraz has also implemented new sales tax policy for seller.
You all must have heard, the latest 2% Sales Tax Withholding in the new Finance Act 2021. We have discussed every aspect of it here with the best of our knowledge.
Who should be concerned?
Every seller on the platform will be charged with the tax irrespective of the size of the seller or revenue. It is applicable to all sellers working on Daraz on each item sold.
When will the policy come in action?
It is effective from 1st December 2021
What is the Policy?
The policy is of withholding 2% of the earning of taxable supplied made through Daraz platform.
Who is it applicable to?
Any seller who falls under Tier-1 Retailer Category and is not an active sales tax filer to Federal Board of Revenue.
1. You are a Tier-1 Retailer AND not an active sales tax filer with FBR.
2, Any Seller holding Expired or incorrect documents such as CNIC or NTN certificate.
Who falls under the category of Tier 1 Retailer?
According to Sales Tax Act 1990 Section 2(43A), Tier Retailer is:
(a) a retailer operating as a unit of a national or international chain of stores;
(b) a retailer operating in an air-conditioned shopping mall, plaza, or center, excluding kiosks;
(c) a retailer whose cumulative electricity bill during the immediately preceding twelve consecutive months exceeds Rupees twelve hundred thousand;
(d) a wholesaler-cum-retailer, engaged in bulk import and supply of consumer goods on a wholesale basis to the retailers as well as on retail basis to the general body of the consumers”;
(e) a retailer, whose shop measures one thousand square feet in area or more or two thousand square feet in area or more in the case of retailer of furniture;
(f) a retailer who has acquired the point of sale for accepting payment through debit or credit cards from banking companies or any other digital payment service provider authorized by State Bank of Pakistan; and
(g) any other person or class of persons as prescribed by the Board.
Who is exempted from this policy?
Every seller who is already registered with FBR as an active taxpayer or filer, will be exempted from the tax policy. However a check and balance will be kept by the platform. Daraz will verify your ATL status every Monday for weekly payment deduction.
It is therefore necessary to regularly check your ATL status
If you are a Tier-1 Retailer but not on FBR's Sales Tax Active Taxpayer list. Then it is recommended to get yourself registered as a taxpayer.
However, If you are already registered with FBR but are inactive then kindly file your tax returns on time and ensure that your sales tax status is active.
If your CNIC/NTN number is not updated on Daraz then please contact Seller Support System to equip you with the process of your CNIC/NTN number update.
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