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    Hunza SRB Reply - V2

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    Hunza SRB Reply - V2

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    Hunza SRB Reply- V2

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    Hunza SRB Reply - V2

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    You are on page 1of 2

    October 26, 2024 T–

    Mr. Amiruddin Kolachi


    Assistant Commissioner (Unit-24)
    Sindh Revenue Board, Karachi

    Dear Sir

    M/S HUNZA STEEL (PRIVATE) LIMITED [NTN # 8295548-5]


    HEARING AGAINST SHOWCAUSE NO. 396905 DATED 8th JUNE, 2024
    TAX PERIOD AUGUST-2023 TO APRIL-2024

    We refer to our office letter no. T-244 dated October 10, 2024 through which an
    extension in time was sought related to the hearing notice no. SRB-COM-II/UNIT-
    24/WHT/2024-25/476585 dated October 03, 2024 through which M/s Hunza Steel
    (Pvt.) Limited (‘Company’) was required to attend the hearing and justify the position
    regarding confronted issue vide show cause notice no. 396905 dated June 08, 2024.

    2. In above regards, before going into facts of the case it is not out of context to
    mention that
    Sindh Sales Tax Special Procedure (Withholding) Rules, 2014 (‘WHT Rules’) has
    prescribed the list of persons liable to withhold Sindh sales tax as per rules specified
    therein. As per Rule 1(2) of WHT Rules, the Company shall be treated as withholding
    agent if it is a resident in Sindh or has a place of business there. The relevant
    provision is quoted below for your reference.

    “a person shall be treated as a withholding agent, for the purpose of


    these rules, only if he is resident in Sindh or has a place of business in
    Sindh”.

    3. Since, the Company is neither a resident of Sindh nor has any place of
    business in the province. Therefore, the Company was not required to be registered
    as withholding agent with Sindh Revenue Board (‘SRB’). Consequently, the Company
    was not required to withhold sales tax against the services received from Sindh
    based vendors and therefore, the Company remitted the inclusive of sales tax value
    to the vendor (Sales Tax Involved PKR 5,301,724). The invoice wise detail along with
    payment proof is attached as Annex-A with this letter.

    4. Also, our submission in para 3 find strength form the responsibilities of service
    providers outlined in Rule 4 of the Sindh Sales Tax Special Procedure Withholding
    Rules, 2014 ['Rules']. As per said rule, withholding shall not be allowed by those
    recipients who are not enrolled as withholding agent and fails to issue notice in form
    SSTW-05 as required Rule 3(1) of the Rules. For your ease of reference, rule 4,
    imposing the restriction to prohibit withholding is reproduced below;

    “(2) The registered service provider shall ensure that he allows


    withholding of tax to only such of his service recipients as are
    withholding agents in terms of sub-rule (2) of rule 1 of these
    rules and also that such service recipients have provided, to the
    service provider, the prescribed notice in Form SSTW-05”

    [Bold and italicized for emphasis only]

    5. Since, the Company was neither registered as a withholding agent, as


    corroborated by the notice issued by your honorable office, and had not provided the
    required notice, tax withholding was not warranted, and the liability should have
    been discharged directly by the service providers.

    6. Additionally, following the receipt of notice from the Board for E-sign up with
    SRB, the Company has decided to register itself with SRB as Withholding Agent.
    Upon registration, the Company has filed withholding statement for the month of
    August-2024 and made the payment of sales tax withheld amounting to PKR
    5,411,347 against the vendors whom payment of dues was pending. The invoice-wise
    detail along with CPR is attached as Annex-B with this letter.

    7. Furthermore, the invoices of JAAG Broadcasting Systems (Pvt.) limited


    mentioned on serial no. 3 & 4 in the notice are duplicate as only one invoice is issued
    to the Company and the Company has duly deducted and deposited the Sindh sales
    tax withheld.

    In light of the above clarifications, we respectfully request the closure of this matter
    without any adverse implications. Your cooperation in this regard would be greatly
    appreciated.

    Yours truly

    cc: Mr. Alam Zaib


    Manager Taxation
    Hunza Steel (Private) Limited

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