Government-Imposed Taxes on E-Commerce Transactions

At Alladin.pk, we believe in transparent pricing and keeping our customers informed about applicable government taxes.

The Government of Pakistan, through the Finance Act, 2025, introduced a withholding tax framework for e-commerce transactions under the applicable provisions of the country's tax legislation.

In accordance with this framework, withholding taxes may apply to eligible online purchases. These taxes are imposed under federal law and are not an additional service charge or commission imposed by Alladin.pk.

Applicable Government Taxes

The following withholding taxes apply to eligible Cash on Delivery (COD) transactions:

Tax Description	Applicable Law	Rate
Withholding Sales Tax (WHT ST)	Section 3(3)(c), Sales Tax Act, 1990, read with Eleventh Schedule, Serial No. 8	2%
Withholding Income Tax (WHT IT)	Section 6A read with Section 153(2A)(ii), Income Tax Ordinance, 2001, and First Schedule, Part I, Division IVA	2%
Total Government Withholding Taxes (COD)		4%

1. Withholding Sales Tax – 2%

Under Section 3(3)(c) of the Sales Tax Act, 1990, read with Serial No. 8 of the Eleventh Schedule, withholding sales tax applies to digitally ordered taxable goods supplied through e-commerce platforms, websites and software applications.

For eligible transactions, the prescribed payment intermediary or courier is responsible for collecting and depositing the applicable withholding sales tax.

Applicable rate: 2% of the gross value of supplies.

2. Withholding Income Tax – 2% (COD)

Under Section 6A of the Income Tax Ordinance, 2001, read with Section 153(2A)(ii) and Division IVA of Part I of the First Schedule, withholding income tax applies to payments for digitally ordered goods and services supplied through e-commerce platforms.

For Cash on Delivery transactions, the prescribed courier service is responsible for collecting and depositing this tax with the Government of Pakistan.

Applicable rate: 2% of the gross amount payable for COD transactions.

For digital payments through banking channels and payment intermediaries, the applicable income-tax withholding rate is 1%.

How Is the 4% Tax Calculated?

For eligible COD transactions, the combined withholding tax is calculated as follows:

Example:

Description	Amount
Product Sales Price	Rs. 100,000
Withholding Sales Tax (2%)	Rs. 2,000
Withholding Income Tax (2%)	Rs. 2,000
Total Government Taxes (4%)	Rs. 4,000

The applicable tax calculation is based on the relevant gross transaction value, as prescribed under the applicable tax laws.

Why Is Alladin.pk Applying These Taxes?

Alladin.pk operates as an e-commerce business in Pakistan and is subject to applicable federal tax laws and regulatory requirements.

The Government of Pakistan has introduced these provisions to formalize the e-commerce sector, improve tax documentation and ensure tax collection on digitally ordered transactions.

Accordingly, applicable taxes are collected through the prescribed mechanisms and deposited with the Government of Pakistan.

Please understand that these are government-imposed statutory taxes, not additional profits, service charges or commissions charged by Alladin.pk.

Legal References

For transparency, customers can refer to the following legislation:

1. Sales Tax Act, 1990

   • Section 3(3)(c)

   • Eleventh Schedule, Serial No. 8

   • Finance Act, 2025

2. Income Tax Ordinance, 2001

   • Section 6A – Tax on Payments for Digital Transactions in E-Commerce Platforms

   • Section 153(2A)(ii) – Withholding Tax Collection by Courier Services

   • First Schedule, Part I, Division IVA

   • Finance Act, 2025

3. Federal Board of Revenue (FBR)

   • Applicable notifications, rules and tax regulations governing e-commerce transactions.

Need More Information?

If you have any questions regarding the applicable government taxes or their calculation on your purchase, our customer support team will be happy to assist you.

Alladin.pk – Transparent Pricing. Reliable Shopping.

Website: https://alladin.pk

Email: support@alladin.pk