KARACHI: Sindh Revenue Board (SRB) has issued updated working tariff for tax year 2020 under which 13 percent sales tax is applicable on services rendered by property developers.
According to the working tariff the tax rate shall be 13 percent on services provided or rendered by property developers or promoters for:
a. development of purchased or leased land for conversion into residential or commercial plots.
b. construction of residential or commercial units.
However, reduced rates are available at Rs100 per square yard of land in case of (a) and Rs50 per square foot of constructed covered area in case of (b). However, on availing reduced rate of sales tax the input tax credit adjustment shall not be admissible.
The SRB said that services provided or rendered by persons engaged in contractual engaged execution of work of furnishing supplies, the sales tax shall be 13 percent.
However, this rate is exempted on services provided or rendered by persons engaged in contractual execution of work of furnishing supplies:
i) whose annual turnover does not exceed 4 million rupees in a financial year; and
(ii) in relation to the text books, published for free distribution amongst students free of cost, against the order of Sindh Textbook Board subject to the conditions that the Sindh Textbook Board:-
(a) assigns the work to a person duly registered under the Sindh Sales Tax on Services Act, 2011; and
(b) Furnishes, to the Sindh Revenue Board, statement on quarterly basis, showing name of person/contractor, SNTN, value of such contract, alongwith certificate about the free of cost distribution of such textbooks amongst the students.
