Taxes on Supplies/Trading of Maize, Grains, Vitamins, Amino Acids, and Rice
The tax implications for this business depend on the nature of the goods being traded.
1. Sales Tax on Goods (FBR)
- Exempt Goods: Raw and unprocessed agricultural products like maize, grains, and rice are generally exempt from sales tax.
- Taxable Goods:
- If these items are processed, packaged, or sold under a brand name, they become taxable at the standard rate of 18%.
- Vitamins and amino acids are taxable at the standard rate of 18%.
- Registration: If you exclusively deal in exempt goods, FBR sales tax registration is not required. However, if you supply any taxable goods, registration becomes mandatory if your turnover exceeds the prescribed thresholds.
2. Income Tax (FBR)
- Income Category: The profit from trading these goods is taxed under "Income from Business".
- Tax Rates: Your net profit is taxed at the standard slab rates applicable to individuals or AOPs.
- Minimum Tax & SME Option: The same rules for minimum tax (1.25% on turnover of PKR 100M+) and the optional SME final tax regime (0.25% or 0.50% of turnover) apply here as well.
3. Withholding Tax (WHT)
- Tax Deducted from Your Payments: When you supply these goods, the purchasers will deduct withholding tax from your payments at the following rates:
- On Rice Supplies: 1.5% (Filer) or 3% (Non-filer).
- On Other Supplies (Maize, Grains, Vitamins, etc.): 5.5% (Filer) or 11% (Non-filer).
- These deductions are adjustable against your final income tax liability.
- Your Duty as a Withholding Agent: If your turnover requires it, you must also deduct tax on payments you make for procuring goods and services.
4. Advance Tax Collection
If you are a distributor, dealer, or wholesaler of taxable goods like vitamins, you must collect advance income tax at 0.5% (from Filers) or 2.5% (from Non-filers) on the gross value of sales made to retailers.