Is the e-commerce tax deducted on orders I ship abroad from my online store?

Online sellers who ship a parcel to Dubai or London often see the same order screens as for a Lahore buyer and assume the same tax applies. The Ordinance separates the two. Export proceeds taxed as exports are carved out of the e-commerce tax and dealt with under the export sections, at a different rate and with different consequences.

What does the law say?

The e-commerce tax and its scope. Section 6A(1) imposes tax on every person who receives payment for digitally ordered goods or services “which are delivered from within Pakistan using locally operated online platforms including online marketplace or websites”. The rate, from Division IVA of Part I of the First Schedule, is 1% for payment through digital means or banking channels and 2% for cash on delivery.

The export carve-out. A proviso to section 6A(1) says export proceeds “subjected to withholding under section 154 and 154A shall not fall within the ambit of this section”.

Exports of goods: section 154. Section 154(1) requires every authorised dealer in foreign exchange, “at the time of realisation of foreign exchange proceeds on account of the export of goods” by an exporter, to deduct tax from the proceeds. Section 154(3C) also requires the Collector of Customs to collect tax on the gross value of goods when clearing them for export. Division IV of Part III of the First Schedule sets the rate for both at 1.25% of the proceeds of the export (the Finance Act, 2026 raised it from 1%). Section 154(4) makes the tax a minimum tax on the income from those transactions.

Exports of services: section 154A. Section 154A(1) requires the authorised dealer to deduct tax when realising foreign exchange for, among other things, IT and IT-enabled services by PSEB-registered exporters and services rendered outside Pakistan or exported from Pakistan. Division IVA of Part III of the First Schedule sets 0.25% for PSEB-registered IT exporters for tax years 2024 to 2029, and 1% in any other case. Section 154A(2) makes it a final tax if the return is filed, withholding statements are filed where required, and sales tax returns are filed where required. The same sub-section says no credit for foreign taxes paid is allowed.

How does it work in practice?

Order type	Which provision	Rate for tax year 2027	Nature
Local order, card or wallet	Section 6A and 153(2A)	1%	Final, subject to section 6A(3)
Local order, cash on delivery	Section 6A and 153(2A)	2%	Final, subject to section 6A(3)
Goods exported, proceeds realised in foreign exchange	Section 154	1.25%	Minimum tax
Services exported, proceeds realised in foreign exchange	Section 154A	1% (0.25% for PSEB-registered IT)	Final, on conditions

The deciding feature in the proviso is that the proceeds are “subjected to withholding” under section 154 or 154A. Both sections operate through the authorised dealer at the point foreign exchange proceeds are realised (and, for goods, also through Customs at clearance).

Worked example (illustrative figures)

Ahmed sells hand-stitched leather gloves from Sialkot through his own website during tax year 2027.

1. Local cash on delivery orders: Rs. 1,000,000 x 2% = Rs. 20,000, collected by couriers under section 153(2A).
2. Export orders, where foreign buyers pay into his bank and the bank realises the foreign exchange: Rs. 2,000,000 x 1.25% = Rs. 25,000, deducted under section 154.
3. The Rs. 2,000,000 export proceeds are outside section 6A because of its proviso, so no e-commerce tax is charged on them.
4. Total deducted: Rs. 20,000 + Rs. 25,000 = Rs. 45,000.
5. The two amounts are treated differently. The Rs. 20,000 is final tax on those receipts (subject to section 6A(3)). The Rs. 25,000 is minimum tax under section 154(4).

What if …?

What if a foreign buyer pays by card through a Pakistani payment gateway on my site? Section 153(2A)(i) requires a payment intermediary processing a digital payment for a seller on a locally operated e-commerce platform to collect tax. The proviso to section 6A excludes proceeds that are “subjected to withholding” under section 154 or 154A. The Ordinance does not spell out how a card payment processed by a local gateway is treated when no section 154 deduction is made on it. That point is not settled by the text held here.

What if I sell through a marketplace run from outside Pakistan? Section 6A(1) refers to “locally operated online platforms”, and section 153(2A)(i) to “locally operated e-commerce platforms”. A platform operated from abroad is not within those words, and the export sections then govern proceeds realised in foreign exchange.

What if I ship both from Pakistan and from a warehouse abroad? Section 6A covers goods “delivered from within Pakistan”. Goods delivered from outside Pakistan fall outside those words.

Common mistakes

• Applying 1% or 2% to every order. The proviso to section 6A removes export proceeds withheld under sections 154 and 154A.
• Treating the export deduction as final. For goods, section 154(4) makes it a minimum tax. Only section 154A (services) is final, and only on conditions.
• Using last year’s rate. Division IV of Part III was changed from 1% to 1.25% by the Finance Act, 2026.

What to check in the official text

Read section 6A(1) with its proviso, section 153(2A), and sections 154 and 154A, then Divisions IV and IVA of Part III of the First Schedule in the source PDF for the rates. Sales tax treatment of exports and any State Bank or customs procedure for courier exports are outside this page.