I. BACKGROUND

1. We refer to the related Important TLQCs in trail, blue, italic and double line (a) --------------of ------- about No minimum Tax u/s 113 on Distributors on Gross sales and KC Views (b) ------- of -------- about SST on Distributors: SCP order against Taxpayers & Recommendations (c) ------ of ------- about FMCG Distributor require Registration-May effect Pharma, Cement, Other Distributors-HC

3. We also refer to several Other TLQCs including (a) -------- of ------ about SST on Distributors - SCP order against Taxpayers expected & KCV (b) 2983 of 23.12.24 about No Minimum Tax on FATA / PATA - ATIR (c) 2865 of 6.8.24 about Manufacturers in Merged Districts of FATA & PATA are IT & ST exempt – SCP (d) 2526 of 26.10.23 about Minimum Tax u/s 113 on Freight Services Fee & not Gross Receipt - LHC

II. EXECUTIVE SUMMARY & KC VIEWS 

1. As per TLQC 2297 of 18.12.25 (in trail) we sent Commentary and Views on ------------------ HC order  (Attachment 2402.1)

2. In that case the issue was whether taxpayer ---------------------- distributor qualifies for Commission deduction u/s 233 or faces minimum tax u/s 113 and Section 236G (as distributor vs. buyer). As Per --C order of ------------- Tribunal/CIR-Appeals correctly held taxpayers as Distributor (not seller), entitled to gross profit margin deduction per Distribution Agreement. No tax minimum tax u/s 113 on full gross sales. 

3. Owing to TLQCs ------------------  respectively, there can issue at the Supreme Court. Hence, we are covering the History & our Recommendation in ensuing paragraphs

III. HISTORY OF ALMOST SIMILAR CASE BUT for Sindh Sales Tax

A. SHC Order Executive Summary - as SCP order is very Brief

You may recall our TLQC 1680 (in trail) whereby we covered the following in the Executive Summary:

1 to 3

B.   SCP Brief order

Further to KQU ----------- dated ------------, being an Important matter, we would inform you about SCP order of ---------- (Attachment 2643.1).

2.   You may recall from our TLQC 2625 (in trail) that, as per reliable sources, the SCP has finally heard the Appeals heard and the Appeals are likely to be decided against the Taxpayers. We are now able to lay our hands on the SCP order.

3.   The SCP held that the Contentions raised by the Learned Counsel for the Petitioners have been convincingly answered in the impugned judgment. No jurisdictional error, illegality or irregularity in the impugned judgment has been pointed out to the SCP. In this background the SCP is of the view that the impugned judgment does not warrant any interference. Leave is, therefore, declined and these petitions are dismissed.

IV. KASBATI & CO RECOMMENDATION

1. Having stated as above, it is worthwhile to study SCP & SHC orders in detail, which are in the trail.

2. As Distributors/Traders margin (difference between sales price of Distributor and buying price of the same) is subjected to Federal Sales Tax, however supply chain issue arose in SST taxing full gross amount.

3. We understand that SCP & SHC order may have significant impact on not only Distributors of FMCG (as in this case) but may also have effects on Distributors of  Cement, Pharma, Lubricants, Tea, Soap, Cars, Packed Food & related items; not only in Lahore but other provinces as well.

4. Accordingly, we recommend that the Agreement with Distributors, Commission Agents be re-visited by consulting the undersigned / your Advisor / Experienced Tax Head.  

5. Moreover, all the MOUs, Agreement and Contacts are executed with prior approval of undersigned / your Adviser / your Legal & Tax Team. 

6. We have a long experience to do so, in Professional as well as Industry for over 30+ Years; as evident from the Background of this as well as several Commentaries.

7. In certain cases, SRB has agreed to certain pre-agreed formula.

E. FURTHER DETAILS & SERVICES

Should you require any clarification or explanations in respect of the above or otherwise, or require Income Tax, Federal & Provincial Sales Tax or Withholding Tax Statement, Advisory, Return Filing or Review services, please feel free to email Mr Amsal at amsal@kasbati.co with CC to info.kasbati@professional-excellence.com, asif.s.kasbati@professional-excellence.com.

Best regards for Here & Hereafter

Asif S Kasbati (FCA, FCMA & LLB)

Best regards for Here & Hereafter

Asif S Kasbati (FCA, FCMA & LLB)

Managing Partner

Kasbati & Co (1400+ Tax, Levies, Companies, Economy, Inflation, HR, Banking, Finance, etc

Quick Commentary Service Provider and High Level 440+ Tax & Levies Laws Consultants)