Withholding Tax on Prepayments

Dear All,

We have a scenario, of Withholding Payment on adjustment of Prepayments, which requires clarification

1. We paid Prepayment (Advance) of 50,000 to a Supplier, without deducting any Withholding Tax

2. The Supplier sends an invoice of Rs. 200,000 with 3.5% as WHT

3. We adjusted 50,000 against the Prepayment (Advance). (Will there be any Withholding Tax deducted when Prepayment is adjusted.)

4. When we pay remaining 150,000, how much Withholding Tax will be deducted and on what amount. 150,000 or 200,000

What is the normal practice for Prepayments

Await your response

Regards

Nauzer