The Federal Board of Revenue (FBR) has made it mandatory for distributors and retailers whose monthly deductible withholding tax exceeds a specified amount PKR 100,000 for distributors and PKR 500,000 for retailers to integrate their businesses with the FBR’s system.
In this regard, the FBR issued SRO 2071(I)/2025 on Tuesday.
Section 236-G of the Income Tax Ordinance, 2001, relates to the advance tax on sales made to distributors, dealers, and wholesalers, while Section 236-H pertains to the imposition of advance tax on sales made to retailers.
The FBR has stipulated that distributors and retailers who are subject to a deductible monthly withholding tax exceeding PKR 100,000 or PKR 500,000, respectively, must integrate with the FBR’s system.
According to the notification, exercising the powers conferred by Section 50 read with Sections 22 and 23 of the Sales Tax Act, 1990, the FBR has directed an amendment to the Sales Tax Rules, 2006.
The amendment includes the insertion of a new sub-rule (3) after sub-rule (2) in Rule 150Q. As per the new sub-rule, retailers whose withholding tax deducted under Section 236-G or 236-H of the Income Tax Ordinance, 2001, during the immediately preceding period exceeds PKR 100,000 or PKR 500,000, respectively, shall be obligated to integrate their business with the FBR’s system under clause (g) of sub-section (43A) of Section 2 of the Sales Tax Act, 1990.
