ISLAMABAD: The Federal Board of Revenue (FBR) has defined the “online market place” would cover e-commerce platform, portal or similar means, which facilitate sale of goods, including third party sale.

According to the Finance Act 2021, the “online market place” includes an electronic interface such as a market place, e-commerce platform, portal or similar means, which facilitate sale of goods, including third party sale by controlling the terms and conditions of the sale; authorising the charge to the customers in respect of the payment for the supply; or ordering or delivering the goods.

The two percent sales tax of gross value of supplies would be applicable on the online market place (persons other than active taxpayers).

Provided that the provisions of this entry shall be effective from the date as notified by the board, the Finance Act 2021 added.

The FBR’s sales tax budget instructions revealed that the online market places facilitating the supply of goods owned by third party suppliers are required to withhold sales tax at the rate of two percent of gross value of supplies made by persons other than active taxpayers. —SOHAIL SARFRAZ