KARACHI: Federal Board of Revenue (FBR) has been asked to exempt supply of fresh milk from withholding income tax.
According to the budget proposals, the purchase of fresh milk from direct grower is exempt from income tax withholding under the provisions of clause 12(a), part IV of 2nd schedule of Income Tax Ordinance 2001.
Whilst if milk is purchased through commission agent, then it attract the provisions of section 233 of the ordinance where commission is subject to withholding of tax at the rate of 15 percent.
The FBR has been informed that this is clearly a case of hardship as milk commission agents are small entrepreneurs and tax rate is far higher than the income they earned by the means of collection and selling of milk.
