National Disaster Management Authority (NDMA) has sought clarification from the Federal Board of Revenue (FBR) on three major tax-related issues including deduction of GST, income tax and FED on emergency procurement of food items and non-food items for 2011 rain/flood victims.
Sources told Business Recorder here on Thursday that the authority wanted clarification on the applicability of GST and other taxes on the procurement of relief items. The authority has started processing payment of bills/ invoices received from vendors/ suppliers of different relief items already procured. These payments are being made out of National Disaster Management Fund, therefore, guidance/ advice of the FBR is requested with regard to the following:
Firstly, "how much amount of the total payable GST is required to be deducted by the NDMA while making payment to vendors? And what could be the mode of payment of the deducted GST to the concerned tax authorities (Beneficiary's name, Address, Bank, etc)?"
Secondly, "should the NDMA deduct Income Tax @ 3.5 %? What would be the mode of payment of the deducted income tax, if any, to the FBR/concerned tax authorities?" Thirdly, "what could be the procedure of deducting GST, in case the vendor fails to produce GST Invoice?" the NDMA added.