Sindh Revenue Board clarifies taxable value, exemption threshold and payment mechanism for educational institutions in FY2026-27.
KARACHI: The Sindh Revenue Board (SRB) has issued detailed rules governing the collection of sales tax on education services, setting out the methodology for determining tax liability and calculating the taxable value of educational services during the fiscal year 2026-27.
According to an official circular, the Board has clarified that where educational institutions collect fees on a monthly, quarterly, semester or any other periodic basis, the annual exemption threshold of Rs500,000 will be applied on a proportionate basis to determine whether the services are subject to sales tax.
The SRB said educational institutions providing taxable services will be required to calculate, collect and deposit sales tax in accordance with the prescribed rules and within the due dates notified under the Sindh Sales Tax on Services Act, 2011.
Taxable value of education services
The circular states that the taxable value of education services will consist of the gross amount of fees or charges, irrespective of the description under which they are collected.
Accordingly, the taxable value will include:
• Tuition fees.
• Admission fees.
• Examination fees.
• Laboratory fees.
• Library charges.
• All other fixed charges.
• Fees collected for non-academic activities.
The SRB clarified that the nature or title of the fee will not affect its inclusion in the taxable amount where it forms part of the consideration for education services.
Security deposits excluded
The Board has, however, excluded refundable security deposits from the taxable value.
According to the circular, refundable security deposits received by educational institutions will not attract sales tax, provided they remain refundable and do not constitute consideration for taxable services.
Reduced tax rates to apply
The SRB further clarified that sales tax on education services will be charged at the reduced rates specified for the relevant services in the Second Schedule to the Sindh Sales Tax on Services Act, 2011.
Educational institutions will be required to apply the prescribed rate while calculating their tax liability under the provincial sales tax law.
Uniform taxation framework
The Board said the new rules form part of the Sindh government’s taxation measures introduced through the FY2026-27 fiscal package.
The objective is to establish a uniform mechanism for determining tax liability, calculating the taxable value of education services and ensuring consistent collection of sales tax from educational institutions providing taxable services across the province.
The SRB expects the clarified framework to improve compliance, reduce uncertainty for educational institutions and strengthen the administration of provincial sales tax on services.