SRB suspends tax registration of Cyber Internet Services

SRB suspends tax registration of Cyber Internet Services

KARACHI: Sindh Revenue Board (SRB) has suspended sales tax registration of M/s. Cyber Internet Services (Private) Limited for making short payment on telecom services.

The SRB on Tuesday said that the services provided or rendered in respect of telecommunication including internet and bandwidth services are chargeable to the sales tax under the provincial law.

M/s. Cyber Internet Services (Private) Limited is registered with the SRB since August 04, 2011.

The SRB said that as per invoices services provided to end consumers of internet services from registered person, it has been observed that the registered person is charging/collecting/depositing Sindh sales tax at lower rate of tax or inappropriate rate of tax i.e. 15.6 percent despite the fact that internet or bandwidth services are chargeable to the Sindh sales tax at 19.5 percent.

As per the description given on one of the invoice, the registered person has billed the consumer for 10 Mbps internet services package for the month of March 2019 but has charged sales tax of Rs312 on value of taxable services of Rs1.999 (sales tax at 15.6 percent) whereas the applicable rate of tax is 19.50 percent.

“This is serious violation of provisions of Sindh Sales Tax Act, 2011.”

Considering the violation, the SRB suspended the sales tax registration of the company with immediate effect.

However, the provincial revenue authority has given opportunity to the company to take remedial action by April 02, 2019 including submitting the summary of tax collected and charged lower than applicable tax rate in case of telecommunication services from July 2011 till February 2019.

In case of non-satisfactory response or failure to take remedial measures as suggested on or before April 02, 2019, the case would be further proceeded for cancellation of registration with SRB, the board warned.

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