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FBR Press Release

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FBR sees no merit in steel industry’s protest on WHT payment

Federal Board of Revenue (FBR) has told the country’s steel industry withholding tax on electricity, gas and telephone bills and imports is  imposed through the Act of Parliament and the industry’s claim that it is being coerced to pay 3.5 per cent tax on their purchases is wrong.

In a press release issued on Tuesday, FBR has maintained that steel mills managed by Association of Persons (AOPs) have to withhold 3 per cent tax from payments owed to their suppliers and such withholding tax has nothing to do with the steel mills’ own liability. Steel industry has to discharge its obligations including withholding of tax from payments owed to their
suppliers, under the Income Tax Ordinance, 2001 like all other sectors. No other sector has agitated the withholding of tax on payments owed to suppliers so far.

FBR has also contended that tax withheld under section 235 of the Income Tax Ordinance 2001 constitutes discharge of final tax liability in the cases of suppliers doing business in the status of individuals and AOPs and is a measure to ensure that all supplies are brought into the tax net. Steel sector has agitated the withholding tax on suppliers without proper appreciation of legal provisions.

The FBR has further added that such issues have been discussed time and again with the representatives of steel industry and as such their demands are inadmissible under the law and cannot be accepted.

Hamid Raza Wattoo
Secretary PR
Apr 14, 2009
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