Taxation Accounting Handling in Pakistan as Withholding Tax Agent

May 30, 2012 Leave a comment

Dear readers, I have decide to write tutorial for you about how taxation are done in Pakistan. The tutorial consists of four portions, First tax chart & tax ratios in Pakistan, scenarios in this tutorial will be cover, pricing from a supplier’s products including sale tax and finally the accounts handling of purchase & taxation as withholding tax Agent.

Let start

Tax Chart & Tax Ratios in Pakistan:

Below I have selected few heads for tax charts, with mentioning its nature and tax ratio.

Tax Chart Nature Tax (in percent)
Sale tax Payment of Goods 16.00%
Income Tax Payment of Goods 3.50%
Income Tax Services 6.00%
Income Tax Brokerage and Commission (Advertising Agent) 5.00%
Income Tax Print Media and News Papers Exemption

Scenarios:

Lets assume Company ABC purchases goods from Supplier S. Supplier S may be registered or unregistered. Below are two scenarios

Scenario Description
a If Supplier S is registered then Sale Tax 16% is narrated, in such a way that 20% will paid by Withholding Agent (Company ABC) and rest of 80% will be paid by registered Supplier S to Govt Treasury.
b If Supplier S is unregistered then Sale Tax 16% is narrated, in such a way that 100% will paid by Withholding Agent to Govt Treasury.

Pricing from a Supplier’s Products Including Sale Tax and Income Tax:

Situation a

Situation b

Registered Supplier S Pricing Unregistered Supplier S Pricing
Product P Gross Price including With Profit margin 191.88 Product P Gross Price including With Profit margin 191.88
Income Tax @ 3.5 8.12 Income Tax @ 3.5 8.12
Product P Selling Price including income tax 200 Product P Selling Price including income tax 200
Sale Tax @ 16% 32 Sale Tax @ 16% 32
Product P Selling Price including Sale tax 232 Product P Selling Price including income tax 232
Supplier S Sale Tax Amount to submitRules for Sale Tax:Supplier S have to submit this 32 Rupees (Sale Tax @ 16%). But According to Rule for Registered Supplier, Supplier S only submit 80% of 32 to Govt Treasury and Rest of 20% of 32 will be submitted by Company ABC (Withholding Agent) to Govt Treasury on behave of Supplier S. 25.6 Supplier S Sale Tax Amount to submitRules for Sale Tax:Supplier S have to submit this 32 Rupees (Sale Tax @ 16%). But According to Rule for Unregistered Supplier, 100% of 32 will be submitted by Company ABC (Withholding Agent) to Govt Treasury on behave of Supplier S. 0

Accounts Handling of Purchase & Taxation as Withholding Tax Agent:

Suppose company ABC is the registered withholding tax agent. Company ABC purchasing a product P from Supplier S. Here in this example we will discuss how company ABC maintains its accounting transaction when Supplier S is registered and unregistered.

Lets start

Supplier S is Registered

Supplier S is Unregistered

Description

Dr

Cr

Description

Dr

Cr

Purchase Entry Purchase Entry
Product P
(Purchase or Expense )

232

Product P
(Purchase or Expense )

232

Account Payable

217.48

Account Payable

191.88

Sale tax Payable
20% of GST (GST @ 16%)

6.4

Sale tax Payable @16%

32

Income Tax Payable @ 3.5

8.12

Income Tax Payable @ 3.5

8.12

Payment Entry Payment Entry
Account Payable

217.48

Account Payable

191.88

Bank/Cash

217.48

Bank/Cash

191.88

Withholding Tax Return Withholding Tax Return
Sale Tax Payable
With Holding Sales Tax deducted From Supplier S

6.4

Sale Tax Payable
With Holding Sales Tax deducted From Supplier S

32

Income Tax Payable
With Holding Income Tax deducted From Supplier

8.12

Income Tax Payable
With Holding Income Tax deducted From Supplier

8.12

Bank/Cash

14.52

Bank/Cash

40.12

In coming new post I will show how this small example will be implemented in OpenERP.

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“ERROR SOLUTION;SERVER CRASHED DURING DATABASE CREATION IN OpenERP”

May 26, 2012 1 comment

If anyone found error during database creation in OpenERP like;

“Server crashed during database creation

  We suggest you to drop this database”

Then you must have to select any language from the default language box and don’t

let it empty; your error will be removed in this way.

The same error I faced few days before, I tried too hard to remove it but nothing worked, and finally I tried the same method and my error solved. You should try this technique and I hope it will satisfy you.

Thanks !

Categories: OpenERP

My Home Theater

April 16, 2012 4 comments

Samsung D5000 40”

Sony 5.1 Home Theater

Play Station 3

Dish TV

1 TB Media Drive

1 TB PS3 Games Backup Drive

2 TB Data Backup Drive

Lenovo Think pad x200

and My Room and Me

Categories: Personal

Big Project Initiated & funded by UNDP in OpenERP v6

April 4, 2012 1 comment

One of the biggest project initiated and funded by UNDP in khyber pakhtunkhwa. Project name is ‘Strengthening Rule of Law in Malakand (SRLM)’ and domain is 12 districts of khyber pakhtunkhwa. Project assigned to Human Resource Development Centre (HRDC), IMSciences, Peshawar.

In 12 Districts, they were focus on following 8 areas;

  1. ADR,
  2. Bar Council,
  3. Judiciary,
  4. Paralegal,
  5. Perception,
  6. Police,
  7. Prosecution and
  8. NGO.

Purpose of project is first do brief survey in 12 districts & 8 areas about ‘Development of Need-Based Training Courses and Capacity Building of Master Trainers’ and than capacity building in these 8 areas  in 12 districts.

For this i have started to develop a software based interface in OpenERP v6 of ‘Training Needs Assessment (TNA) Questionnaire’ for different 8 areas considering junior and senior staff separately. This collected data from fields work will sync with SPSS in openERP v6 for heavy statistical reports.

OpenERP v6 module integration with SPSS 18.

Categories: News

Criminal Information System in OpenERP v6

March 5, 2012 1 comment
Project :
Criminal Information System, Police Line Peshawar, Pakistan
 
Project Assigned By:
SP Investigation Umer Hayat
 
Project Completed  By:
Mohsin Yaseen
  
Software Tools Used:
OpenERP v6
 
Overview of Modules Developed and Customized in OpenERP:
Purpose:
  1. Single Repository of all criminal record at district and province level
  2. Quick searching of suspect or criminal from different perspective
  3. Analysis of crime rate  from different perspective
Different Perspective Include:
  • District wise crime
  • Police station wise crime
  • Nationality wise crime
  • Main and sub caste wise crime
  • Also Integration of above all perspective
  • And much more.
68 Attributes of Each Criminal:In this criminal repository, 68 attributes are recorded for single criminal including its history of crime. Using these 68 attributes
  1. We can analyze statistically ,
  2. We can search criminal or suspect from 68 different attributes.

Inno8Tech (Outsource Project) Success Story in OpenERP v6

March 2, 2012 3 comments
Project :
Outsource Project (Inno8Tech)
 
Project Assigned By:
Inno8Tech
 
Project Completed  By:
Mohsin Yaseen and Waqas Pitafi
  
Software Tools Used:
OpenERP v6
 
Overview of Modules Developed and Customized in OpenERP:
 
Customized Modules are; 
-Finance, Sale and Purchase
-CRM
-HR, Expense, Contract, Payroll, Attendance, Time Sheet and Recruitment 
-Project Management
 
Developed Modules are; 
-Project based Employee Advances & Recovery, Integration with invoice (finance), approval workflow
-Email and sms alerts against project completion, task assignment, task completion, project based advance requisition, advance approval and advance rejection. 
 
 

Project: Police Information System in OpenERP v6

March 1, 2012 Leave a comment
Project :
Police information System
 
Project Assigned By:
Police Line District Mardan, NWFP Pakistan
 
Project Completed  By:
Mohsin Yaseen
  
Software Tools Used:
OpenERP v6
 
Overview of Modules Developed in OpenERP for Mardan Police Line:
 
This Module is developed for Purpose of Police Personal Evaluation at Mardan District of NWFP Pakistan
 
This Module includes,
 
– Officer Personal Informations,
– Current Posting and Current Rank
– History of All Posting and Promotion according to time
– Courses Passed during career and gain points
– Good Points assigned by senior and its all history of officer
– Different punishments given by senior officer and its bad points
– Leave Qouta, Earned leave history, Medical Leave History and Casual Leave History
– Record complaints against officer from differ persons, These complaints will only read by senior officer.
– Promotion and Posting Policy enforcement
– Retirement and experience in career
– Reports:
Strength of Police Station
Posting Wise Officer Selection
Course Assignment wise Officer Selection
Officer Selection by current posting tenure
Officer Selction by posting in home Police Station or circles