Home / Knowledge / News / Textiles / Cotton ginners to pay withholding tax on lint
Cotton ginners to pay withholding tax on lint
11
Sep '08
The Federal Board of Revenue (FBR) announced yesterday that the withholding tax deductible on the amount of cotton lint supplied by the cotton ginners to the textile industry would have to be paid by cotton ginners themselves.

With regard to this, the FBR has also issued the income tax circular No 11 of 2008 to give clarification in case of any issues emerging due to payment of tax by cotton ginners.

The move was taken to facilitate cotton ginners who were facing problems in the verification of tax withheld by the textile industry. According to the circular, the textile industry on the purchase of cotton lint from the ginners, being “prescribed person” is obliged under sub-section (9) of section 153 of the Income Tax Ordinance, 2001 to withhold tax under subsection (1) of the aforesaid section, as per reduced rate notified by the Board vide SRO No 600(I)/91 dated July 2, 1991 (as amended from time to time), deposit the same in the government treasury and provide a copy of the said challan to the cotton ginners.

In the meanwhile, the Pakistan Cotton Ginners' Association (PCGA) also held a meeting with the Board on August 9, 2008, where it was informed that they are facing acute problems in the verification of tax withheld by the textile industry.

Thereafter, the FBR decided that in accordance with the provisions of clause (bb) of sub-section (5) of section 153 of the Ordinance, the tax deductible on the amount of cotton lint supplied by the cotton ginners to the textile industry shall be paid by cotton ginners themselves and a copy of the paid challan be presented to the buyer of the cotton lint at the time of payment on account of sales/supplies.

In addition to filing of the statement under section 165 of the Ordinance read with rule 56 of the Income Tax Rules, 2002, the buyer's legal responsibility being “prescribed person” under sub-section (9) of section 153 of the Ordinance would be discharged, when he would record the bank scroll number, date of payment and other necessary details on the invoice of payment.

Moreover, it is also required of the person to record full details on the invoice of payment and if the tax paid is not in correspondence to the payment made on account of supplies/sales of lint and if the necessary evidence of payment is not shown, the “prescribed person”, would be treated assesses in default and necessary proceedings under section 161 of the Ordinance and other provisions of the Ordinance shall be initiated against him by the taxation authorities holding jurisdiction upon the case of buyer.


Must ReadView All

Courtesy: Trinity Kubassek from Pexels

Textiles | On 19th Aug 2018

Australian wool production to fall 5.7% in 2018-19

Shorn wool production in Australia is likely to fall by 5.7 per cent...

Courtesy: Next Level Apparel

Apparel/Garments | On 19th Aug 2018

Blue Point Capital recapitalises Next Level Apparel

Blue Point Capital Partners has recapitalised Next Level Apparel, a...

Retailers approaching 100% inventory accuracy: Study

Apparel/Garments | On 19th Aug 2018

Retailers approaching 100% inventory accuracy: Study

With computer vision use cases maturing, Artificial Intelligence (AI) ...

Interviews View All

Karan Toshniwal
Orange O Tec

Contemporary industry is paying more and more attention to the...

Karin Ekberg
Leadership & Sustainability

Sustainable models are beneficial for brands, retailers and manufacturers

Top executives
Textile industry, India

The event should be organised every year

Kamal Kulshreshth

Colorjet is among the fastest-growing wide format digital inkjet print...

Nitesh Mittal

Kusumgar Corporates is a leading manufacturer of technical textiles and...

Deepprakash Agrawal

Radhey Weaves is a Surat-based manufacturer of brocade fabrics. MD...

Kerem Durdag
Biovation II LLC

Kerem Durdag, CEO, Biovation II LLC, provides an insight into future...

Suresh Patel
Sidwin Fabric

Sidwin Fabric is a manufacturer and exporter of polypropylene textiles and ...

Kazuaki Yazawa
Purdue University

Scientist <b>Kazuaki Yazawa</b> has developed thermoelectric semiconductor ...

Pranav Mishra
Huemn

Designers Pranav Mishra and Shyma Shetty’s Huemn is known for its...

Judy Frater
Somaiya Kala Vidya

Among the many honours showered on Frater, including Fulbright and Ford...

Wendell Rodricks
Wendell Rodricks

"We should not compare India and the West. There are things we do that...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

Leave your Comments


August 2018

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

news category


Related Categories:

Advanced Search