Sales tax rate on services provided by laundries, dry cleaners

Sales tax rate on services provided by laundries, dry cleaners

KARACHI: Sindh Revenue Board (SRB) has issued updated working tariff for tax year 2020 and notified sales tax rate on services provided by laundries and dry cleaners.

According to the working tariff the sales tax rate is 13 percent on services provided by laundering and dry cleaners.

However, a reduced rate of five percent also allowed on services provided or rendered by stand-alone laundries and dry cleaners.

Explanation: For the purpose of this notification, “Stand-alone laundries and dry cleaners” means a laundry and dry cleaner:-

(a) which does not provide any taxable service other than the services described against tariff heading No. 9811.0000;and

(b) which or any outlet/branch of which is not located with the building premises or precincts of a hotel, motel, guest house or club whose service are liable to tax.

Input tax credit adjustment shall not be admissible against reduced rate of sales tax.

The SRB also exempted the sales tax on services provided or rendered by laundries or dry cleaners for following categories:

(a) laundries and dry cleaners located within the building premises and premises of a hotel, motel, guest house or club whose services are liable to tax;

(b) laundries and dry cleaners which have franchisers or franchisees;

(c) laundries and dry cleaners having any branch or more than one outlet in Sindh;

(d) laundries and dry cleaners whose turnover exceeds 2.5 million rupees in a financial year; and

(e) laundries and dry cleaners whose total utility (electric, gas and telephone) bills does not exceed Rs. 25,000/- in any month during a financial year.