LAHORE: Apart from Sindh and Balochistan, no other provinces have issued any specific rules with respect to online marketplace (OMP), said sources.
An OMP is a website/platform where buyers and sellers interact, conduct transactions and resultantly the buyer purchases the product/services while the seller gets consideration in exchange. There are many examples of an OMP such as Daraz, Ali Express, Amazon, Foodpanda etc to name a few.
Point of Sale (POS) integration is mandatory for an OMP acting as a facilitator at all their points of sale, including the ones providing services through the internet in Sindh.
At present all POS generated invoices are accompanied with a fee of Rs 1 per invoice, but the OMPs are exempt from such fee if they are solely and exclusively a facilitator to such service there.
Furthermore, services provided by restaurants through an OMP platform are subject to 13% Sindh services sales tax.
Sources said if a meal is sold through an order created through an app, it would attract 13% Sindh sales tax on services and the owner of the restaurant would be responsible to pay the tax so collected, while the owner of the app, being a commission agent would have his income taxable as under the ITO i.e. 5% deducted on the amount of commission. Balochistan has also issued similar rules in September 2022.
It may be noted that special provisions are already applicable on an OMP under the Sales Tax Act, 1990, and Income Tax Ordinance. 2001.
The Sales Tax Act says that any electronic interface which facilitates the sales of goods including third party sale by either controlling the terms and conditions of the sale, or authorizing the charge to the customers for the payment of the supply or by ordering/delivering the goods.
Moreover, where third party goods are involved, then the operator of the OMP shall be liable to withhold 1% on the gross value of such taxable supplies from suppliers other than active taxpayers.
Under the Income Tax Ordinance, they added, an OMP shall be subject to provisions of minimum tax and shall be liable for turnover tax at the rate of 0.25% on the turnover from such transaction. Moreover, in case of brokerage or commission, the withholding tax rate shall be 5%.
Copyright Business Recorder, 2024
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