Punjab Tax Relief Package: Many sectors granted exemption till June 30

LAHORE: The government of Punjab has granted exemption from sales tax on services to many sectors in order to dilute effects of coronavirus.

The provincial government announced tax relief package to fight COVID-19 through a notification issued on April 02, 2020.

According to a notification issued by Punjab Revenue Authority (PRA) the tax exemption has been granted through amendments brought into the Second Schedule to the Punjab Sales Tax on Services Act, 2012.

The PRA said that zero percent without input tax adjustment has been allowed to hotels, motels and guest houses. However, this exemption has been granted to non-corporate, non-franchise and non-chain business. Meanwhile, 16 percent sales tax on service shall remained applicable for others.

The zero percent tax without input tax adjustment has also been allowed to:

Marriage halls and lawns (by whatever name called) including pandal and shamiana services.

Catering services (including all ancillary / allied services such as floral or other decoration, furnishing of space whether or not involving rental or equipment and accessories).

However, 16 percent sales tax on services shall applicable on clubs including race clubs and their membership services including services, facilities or advantages, for a subscription or any other amount to their member.

For life insurance and health insurance businesses, the PRA announced zero percent without input tax adjustment. While, sixteen percent of gross minimum paid shall be applicable for other insurance services.

Zero percent tax without input tax adjustment has been granted to services provided by digital platform. But the rate of 16 percent shall remain applicable for others.

The following services have been allowed zero percent sales tax on services without input tax adjustment under serial number of Second Schedule:

14. Construction services and services provided by contractors of building (including water supply, gas supply and sanitary works), roads and bridges, electrical and mechanical works (including air conditioning), horticultural works, multi-discipline works (including turn-key projects) and similar other works

18. Services provided for personal care by beauty parlors, salons, clinics, slimming clinics, spas (including saunas, Turkish baths and Jacuzzi) and similar other establishments

24. Services provided by other consultants (by whatever name called or treated, whether as consultant or otherwise) including human resource and personnel development services, exhibition or convention services[including provision of space, equipment, accessories and other allied services], event management services (whole range and variety of their services regardless of separate or individual classification thereof), valuation services, evaluation services (including competency and eligibility testing services), certification, verification and equivalence services, market research services, marketing or sales services (including marketing agencies and on line marketing or sales services), surveyors services, training or coaching services (other than general education services) and credit rating services.]

25. Services provided by tour operators[and travel agents including all their allied services or facilities] (other than Hajj and Umrah).

32. Services provided by property dealers[and realtors].

35. Services provided in respect of rent-a-car[(including renting of all categories of vehicles meant for transportation of persons)

36. Services provided by car/automobile dealers

43. Services provided in specified fields such as health care, gym, physical fitness, indoor sports, games,[amusement parks, arcades and other recreation facilities,]and body or sauna massage etc.

44. Services provided by laundries and dry cleaners

45. Services provided by cable TV operators.

66. Services in respect of treatment of textile, leather but not limited to Dyeing services, Edging and cutting, cloth treating, water proofing, Embroidery, Engraving, Fabric bleaching, Knitting, Leather staining, Leather working, Pre-shrinking, Color separation services, pattern printing and shoe making services.

67. Apartment house management, real estate management and services of rent collection.

68. (i) Medical consultation/ visit fee exceeding Rs.1,500per consultation/ visit of doctors, medical practitioners and medical specialists.(ii) Bed/ room charges of hospitals exceeding Rs.6,000/-per day per bed / room.

The PRA said that the notification shall remain effective for a period from its publication till June 06, 2020 (both days inclusive) and on and from July 01, 2020, the amendments shall cease to have effect and the position obtaining prior to this notification shall stand restored.

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