- The Federal Board of Revenue (FBR) has introduced a procedure for the collection of sales tax on used vehicles for the tax year 2024.
- The FBR has released updated guidelines known as the Sales Tax Rules, 2006, specifically outlining the process under Rule 164A.
- Rule 164A pertains to the supply of used vehicles and aims to streamline the taxation process for businesses buying and selling used vehicles.
- The value of supply is calculated using a formula that subtracts the consideration paid by the registered person to the seller from the consideration received from the buyer.
- The entire transaction amount must be processed through a banking channel.
- No input tax credit will be allowed for goods or services acquired specifically for selling used vehicles.
- This procedure aims to simplify the taxation process and ensure transparency in financial transactions.
- The emphasis on banking channels and provision for cases where vehicles are sold at a reduced price contribute to a fair and balanced tax system.
- This procedure promotes clarity and ease of compliance within the taxation framework for businesses dealing with used vehicles.
Source: pkrevenue.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
