GST and withholding tax, deducted where they actually happen
Four per cent of delivered COD value never reaches your account. It is withheld by the courier and paid on your behalf, which means it is real money, it is your money, and most stores never see it as a line.
What is withheld, and when
The two withholdings apply to delivered COD only — a returned parcel produces no collection and therefore no withholding, which is one more reason profit has to be computed on delivery rather than on order date. GST on courier services is different in kind: it is charged on the freight bill, so it applies to returned parcels too.
Inside profit, and broken out separately
Both withholdings are deducted inside net profit, because a figure that ignores them is not the money you kept. They are also reported on their own, by period, so you can see what has been withheld against your name over a quarter — and hand it to your accountant as an export rather than as a screenshot.
This is software, not tax advice. Kaarobar computes what the courier deducted and shows the arithmetic; how you treat it in your return is between you and your accountant. Rates are the ones applied to COD remittances in Pakistan today, and the app shows the rate it used on every figure so a change is visible rather than silent.
Questions merchants actually ask
- What withholding tax applies to cash on delivery in Pakistan?
- Delivered cash-on-delivery carries 2% income tax withholding and 2% sales tax withholding, deducted by the courier before the remittance reaches the seller. Together they are 4% of delivered COD value.
- Is withholding tax charged on returned parcels?
- No. Nothing is collected on a return, so nothing is withheld. GST on the courier's own service charge does still apply, because the courier still carried the parcel — in both directions.
- Can I export the tax figures?
- Yes. The tax breakdown exports to CSV or Excel by period, which is the form an accountant will actually accept.