CAF-2 · Chapter 17 · Question 3 of 15
ABC Traders, a small retailer not falling under Tier-1, sells goods through an online marketplace. A customer purchases goods worth Rs. 100,000 using Cash on Delivery (CoD). How will sales tax be handled for this digital transaction?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) C) The courier company will withhold 2% of the gross value, which constitutes the final discharge of ABC Traders' sales tax liability.
Explanation
For supplies of digitally ordered goods delivered from within Pakistan, a tax of 2% is withheld by the courier service on Cash on Delivery (CoD) transactions. For retailers other than Tier-1, this withholding constitutes the final discharge of their sales tax liability, and they are not required to obtain sales tax registration.
More Scope of Sales Tax Law and Rules for Registration and Deregistration MCQs
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