Tax Policy

Effective Date: 1 July 2025

At Auto Axis, we are committed to full compliance with the tax laws of the Islamic Republic of Pakistan. This Tax Policy explains how government-mandated taxes apply to transactions conducted through our platform.

This policy is issued in accordance with:

• Income Tax Ordinance, 2001

• Finance Act, 2025

• Sales Tax Act, 1990

• Rules and notifications issued by the Federal Board of Revenue (FBR)

1. Government Taxes on Online Transactions

Under recent amendments introduced through the Finance Act, 2025, specific taxes apply to digitally ordered goods sold through online marketplaces.

These taxes are government-imposed and are collected as required by law.

A. Withholding Tax on Digital Payments

If a customer pays through:

• Debit card

• Credit card

• Online bank transfer

• Mobile wallet

• Payment gateway

A withholding tax of 1% of the gross transaction amount is deducted as required under Section 6A of the Income Tax Ordinance, 2001.

This tax is collected by the payment intermediary and deposited with the Federal Board of Revenue (FBR).

B. Withholding Tax on Cash-on-Delivery (COD)

If a customer chooses Cash-on-Delivery (COD):

A withholding tax of 2% of the gross transaction amount is deducted as required under Section 6A of the Income Tax Ordinance, 2001.

This tax is collected by the courier company and deposited with FBR.

2. Sales Tax (GST / VAT)

Where applicable, Sales Tax (GST) is charged in accordance with the Sales Tax Act, 1990.

• The standard federal GST rate is generally 18% (unless a reduced or zero rate applies to specific goods).

• Sales tax applicability depends on the seller’s registration status and the nature of goods being sold.

If applicable, sales tax is included in the displayed price or clearly indicated at checkout.

3. Seller Registration Requirements

In accordance with FBR regulations:

• All sellers operating on our platform must be registered for Income Tax.

• Where applicable, sellers must also be registered for Sales Tax.

• Marketplace platforms and courier companies are legally required to transact only with registered sellers.

Failure to comply may result in suspension or removal from the platform.

4. Final Tax Nature

The withholding taxes deducted under Section 6A are treated as final tax on the transaction, unless otherwise adjusted under applicable tax law.

Sellers are responsible for:

• Filing income tax returns

• Claiming adjustments or credits where applicable

• Complying with all reporting obligations under Pakistani tax laws

5. Transparency for Customers

Customers should understand:

• The taxes applied to transactions are mandated by the Government of Pakistan.

• These taxes are not service charges or platform fees.

• The final payable amount shown at checkout includes all applicable government taxes.

6. Compliance and Reporting

Auto Axis complies with all reporting obligations under:

• Income Tax Ordinance, 2001

• Sales Tax Act, 1990

• Applicable rules issued by the Federal Board of Revenue

We cooperate fully with tax authorities and maintain required transaction records in accordance with Pakistani law.

7. Changes to Tax Laws

Tax laws in Pakistan may change through annual Finance Acts or FBR notifications.
If tax rates or compliance requirements change, this policy will be updated accordingly.

8. Government Authority

All taxation matters are regulated by:

Federal Board of Revenue (FBR)
Website: https://fbr.gov.pk

For official clarification regarding tax rates or obligations, users may consult FBR directly or seek professional tax advice.