The Sindh Revenue Board (SRB) has updated the sales tax rates for services provided by hotels, restaurants, caterers, and clubs during the tax year 2023.
The working tariff was updated up to April 15, 2023, for the ongoing tax year.
According to the working tariff, services provided or rendered by hotels, motels and guest houses, is 13 percent.
It stated that services provided or rendered by restaurants is 13 percent but it is exempt if:
Services provided or rendered by restaurants whose turnover does not exceed 2.5 million rupees in a financial year:
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Provided that the exemption shall not apply in case of restaurants:-
(i) which are air-conditioned on any day in a financial year and which are located within the building or premises of air-conditioned shopping malls or shopping plazas;
(ii) located within the building, premises or precincts of any hotel, motel, guest house or club whose services are liable to sales tax;
(iii) providing or rendering services in the building, premises, precincts, hall or lawn of any hotel, motel, guest house, marriage hall or lawn or club whose services are liable to sales tax;
(iv) which are franchisers or franchisees;
(v) having branches or more than one outlet in Sindh; and
(vi) whose total utility bills (gas, electricity and telephone) exceed Rs. 40,000/- in any month during a financial year.
The SRB further stated that services provided or rendered by marriage halls and lawns is 13 percent but it is exempt if:
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Marriage halls and lawns which are located on plots measuring 800 square yards or less:
Provided that the exemption shall not apply in case of marriage halls and lawns:-
(i) which are air-conditioned on any day in a financial year;
(ii) located within the building, premises or precincts of a hotel, motel, guest house, restaurant or club whose services are liable to tax;
(iii) as are owned, managed or operated by caterers whose services are liable to tax;
(iv) which are franchisers or franchisees; and
(v) having branches or more than one hall or lawn in Sindh.
According to the SRB, services provided or rendered by Clubs is 13 percent however it will exempt if:
(i) services provided by Clubs whose initiation fee for members does not exceed thirty thousand rupees and whose monthly fee/subscription for the members also does not exceed one hundred rupees; and
(ii) charges received by Clubs from its members as refundable security deposits and voluntary contributions for the welfare (e.g. eid gifts) for the Club staff or for payment to the registered non-profit organizations, as defined and for the purposes mentioned in under section 2(36) of income Tax Ordinance, 2001.
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It further stated that services provided or rendered by caterers, suppliers of food and drinks is 13 percent but it will exempt if:
Services provided or rendered by caterers whose turnover does not exceed 2.5 million rupees in a financial year:
Provided that the exemption shall not apply in case of caterers:-
(i) located within the building, premises or precincts of any hotel, motel, guest house or club whose services are liable to sales tax;
(ii) providing or rendering services in the building, premises, precincts, hall or lawn of any hotel, motel, guest house, marriage hall or lawn or club whose services are liable to sales tax;
(iii) which are franchisers or franchisees;
(iv) having branches or more than one outlet in Sindh; and
(v) whose total utility bills (gas, electricity and telephone) does not exceed Rs. 40,000/- in any month during a financial year.
Meanwhile, ancillary services provided or rendered by hotels, motels, guest houses/restaurants, marriage halls and lawns, clubs and caterers is 13 percent but it will exempt if:
Ancillary services provided or rendered by Clubs whose initiation fee for members does not exceed thirty thousand rupees and whose monthly fee/subscription for the members also does not exceed one hundred rupees.
