KARACHI: Sindh Revenue Board (SRB) has issued amended working tariff for tax year 2020 under which the tax rate for rendering professional services shall be at 13 percent.
The SRB also notified reduced rate for professional services with condition of not allowing input tax adjustment.
According to SRB working tariff chart updated till December 31, 2019, legal practitioners and consultants are required to pay sales tax on services t 13 percent.
However, legal practitioners have option to pay reduced rate of 8 percent sales tax on services but input tax credit/adjustment shall not be adjustable.
Similarly the sales tax rate is 13 percent for services rendered by accountants and auditors.
The services rendered by accountant and auditors’ are exempted from sales tax if it services are exported, by registered persons, outside Pakistan, to such of the service recipients as are not located and not resident in Pakistan, subject to the condition that the value of export of the services is received in foreign exchange through banking channels in the business bank accounts of the registered person exporting the services and is also reported to the State Bank of Pakistan in the manner prescribed by the State Bank of Pakistan.
However, the accountants and auditors have been given option to pay reduced tax rate of 8 percent on which input tax adjustment shall not be allowed.
The SRB said that the sales tax rate of 13 percent is applicable on management consultants, technical, scientific and engineering consultants.
The sales tax on services is also at 13 percent for software or IT based system development consultants. However, the services are exempt in case software or IT-based system development consultants’ services exported, by registered persons, outside Pakistan subject to the condition that the value of export of the services is received in foreign exchange through banking channels in the business bank accounts of the registered person exporting the services and is also reported to the State Bank of Pakistan in the manner prescribed by the State Bank of Pakistan.
Other consultants including tax consultants, human resources and personnel development consultants are subject to 13 percent sales tax on services rendered by them.
The SRB allowed reduced rate of tax at 8 percent on these consultants with condition that input tax adjustment will not be allowed.
