ISLAMABAD, July 3: The Federal Board of Revenue (FBR) has issued special rules for supply of taxable goods and services to government departments, autonomous bodies and public sector organisations.

These rules may be called the Sales Tax Special Procedure (Withholding) Rules, 2007, which were notified through a sales tax notification SRO 660 of 2007.

Under these rules, the withholding agent, intending to make purchases of taxable goods, shall indicate in an advertisement or notice for this purpose that the sales tax to the extent as provided in these rules shall be deducted from the payment to be made to the supplier.

A withholding agent shall deduct an amount equal to one fifth of the total sales tax shown in the sales tax invoice issued by the supplier and make payment of the balance amount to him.

All withholding agents shall make purchases of taxable goods from a person duly registered under the Sales Tax Act, 1990, provided that under unavoidable circumstances and for reasons to be recorded in writing, purchases are made from unregistered persons, the withholding agent shall deduct sales tax at 15 per cent of the value of taxable supplies made to him from the payment due to the supplier.

The sales tax so deducted shall be deposited by the withholding agent in the designated branch of National Bank of Pakistan under head of account “B02341-Sales Tax“ on sales tax return-cum-payment challan in the form set out at annexure to these rules, by 15th of the month following the month during which payment has been made to the supplier:

Provided that a single return-cum-challan can be filed in respect of all purchases for which the payment has been made in a month: Provided further that in case the withholding agent, is also registered under the Sales

Tax Act, 1990, with respect to the taxable supplies provided or services rendered by him, he shall deposit the withheld amount of sales tax in the manner as provided under chapter II of the Sales Tax Rules, 2006, along with other sales tax liability.