Tag: sales tax on services

KARACHI: The Sindh government has exempted sales tax on services for one year for cable TV operators within the jurisdiction of the province.

The Sindh Revenue Board (SRB) has issued a notification to further exempt the sales tax on services rendered by cable TV operators till June 30, 2022.

The Sindh government imposed sales tax on services rendered by cable TV operators through a notification issued on June 27, 2019. However, since then the levy has been exempted. Through a new notification the exemption is further extended for one more year till June 30, 2022.

According to the amended notification:

The provincial government has exempted Sindh sales tax on such of the services provided or rendered by Cable TV Operators, as are classified under tariff heading 9819.9000 of the Second Schedule to the said Act, subject to the conditions that such service provider:-

(a) is registered with the Board in terms of section 24 of the Act and has shown the services of “Cable TV Operators” of tariff heading 9819.9000 as his “Principal Activity” in row No. 12 of the Registration Form SST-01:

Provided that where the service provider also provides other taxable services including the services of “advertisement on Cable TV network” of tariff heading 9802.5000, he shall also inter-alia indicate the economic activity of such taxable services in the relevant column of Activity Code of “Other Business Activities” in row No. 19 of the Registration Form SST-01;

(b) is a stand-alone service provider of the taxable service of “Cable TV Operators” of tariff heading 9819.9000.

Explanation: For the purposes of this notification, a “stand-alone” service provider means a person whose principal activity is the provision of services of “Cable TV Operators” of tariff heading 9819.9000 and whose other service-related business activity, if any, is restricted to the provision of the taxable services of “advertisement on Cable TV network” of tariff heading 9802.5000. Persons providing or rendering taxable services of any of the tariff headings, other than those of tariff headings 9802.5000 and 9819.9000, shall not be eligible to the benefits of this notification:

Provided that nothing contained in this notification shall be construed to be exempting the taxable services of “advertisement on Cable TV network” classified under tariff heading 9802.5000 even if provided or rendered by such a stand-alone service provider;

(c) e-files his tax returns (Form SST-03) regularly in the prescribed manner, showing the details of his exempt services of Cable TV Operators (tariff heading 9819.9000) and also of other taxable services including the taxable services of advertisements on Cable TV (tariff heading 9802.5000) therein:

Provided that the tax returns for the tax periods July, 2016 to June 2021, if not filed earlier, shall be e-filed by the stand-alone service provider on or before the 31^st day of July, 2021;

(d) e-deposits his tax liability on the taxable services, including the taxable services of “advertisement on Cable TV network” (tariff heading 9802.5000), regularly in the prescribed manner:

Provided that the tax liability for the tax periods July, 2016 to June, 2021, if not paid earlier, shall be e-deposited by the stand-alone service provider in Sindh Government’s head of account “B-02384” in the prescribed manner by the 31^st day of August, 2021; and

(e) complies with the provisions of the Sindh Sales Tax Special Procedure (Withholding) Rules, 2014, in relation to the taxable services, including the taxable service of advertisement on Cable TV network (tariff heading 9802.5000), as are provided or rendered by him and e-deposits the amounts of Sindh sales tax involved, in case such amounts are or were not deducted or withheld by the service recipient or the withholding agent in terms of the said Rules:

Provided that the liability of Sindh sales tax under the aforesaid Sindh Sales

Tax Special Procedure (Withholding) Rules, 2014, for the tax periods July, 2016 to June, 2021, if not paid earlier, shall also be e-deposited by the stand-alone service provider in Sindh Government’s head of account “B-02384” in the prescribed manner by the 31st day of August, 2021.

This notification shall not entitle any person, whether a service provider or a service recipient, to any refund or adjustment of tax already paid or deposited by him in Sindh Government’s head of account “B- 02384” on any day prior to the date of this notification.

This notification shall take effect from the 1^st day of July, 2018, and, if not rescinded earlier, shall stand rescinded on the 30th day of June, 2022.

KARACHI: The Sindh government has allowed payment of sales tax on services at reduced rate of five per cent to recruiting agencies subject to terms and conditions.

A notification issued by the Sindh Revenue Board (SRB) stated that the provincial government had allowed the sales tax on the services provided or rendered by the recruiting agents, as are classified under tariff heading 9805.6000 of the Second Schedule to the said Sales Tax on Services Act, 2011 and are also restricted to recruitment of persons or group of persons for employment outside Pakistan, shall be charged, levied and collected at a lower rate of 5% during the tax periods of the financial year 2021-22 subject to the conditions that such a service provider:-

(a) is registered with the Board in terms of section 24 of the Act and has shown the services of “Recruiting agents” of tariff heading 9805.6000 as his Principal Activity in his Registration Form SST-01:

Provided that where the service provider also provides any other taxable services as described in the Second Schedule to the Act, he shall inter-alia indicate the economic activity of such services in the relevant column of Activity Code of Other Business Activities, as provided in row number 19 of the Registration Form SST-01, read with the provisions of sub-rule (3) of rule 4 of the Sindh Sales Tax on Services Rules, 2011;

(b) is a stand-alone service provider of the taxable service of “recruiting agents” of tariff heading 9805.6000.

Explanation: For the purposes of this notification, a “standalone service provider” means a person whose principal economic activity is the provision of services of “Recruiting agents” of tariff heading 9805.6000, and such economic activity of the provision of the services of recruiting agency is related to recruitment of persons or group of persons for overseas employment in countries outside Pakistan:

Provided that the services provided or rendered by such recruiting agents in relation to recruitment of persons or group of persons for employment in Pakistan shall continue to be levied to tax at the rate of 13 per cent:

Provided further that where a recruiting agent provides or renders any of the taxable service not classified under the aforesaid tariff heading 9805.6000, he shall pay the tax relatable to such services (other than the services of tariff heading 9805.6000) at the rate(s) applicable to the tariff heading(s) relatable to such other services;

(c) e-deposits his tax liability on the taxable services regularly in the prescribed manner:

Provided that the tax liability for the tax periods upto June, 2021, if not paid earlier, shall be e-deposited by the service provider in Sindh Government’s head of account “B-02384” in the prescribed manner by the 15th day of July, 2021;

(d) e-files his tax returns (Form SST-03) regularly, in the prescribed manner;

(e) showing the details of his services liable to statutory rates of tax and also to reduced rates of tax, separately, in the same return:

Provided that the tax returns for the tax periods prior to June, 2021, if not filed earlier, shall be e-filed by the service provider on or before the 20th day of July, 2021; and

(f) complies with the provisions of the Sindh Sales Tax on Services Act, 2011, and the rules and notifications issued thereunder.

This notification shall not entitle any person, whether a service provider or a service recipient, to any refund or adjustment of tax.

This notification, if not rescinded earlier, shall stand rescinded at 23:59 hours of the —30^th day of June, 2022.

KARACHI: Sindh Revenue Board (SRB) has issued updated rate of sales tax on services provided by customs agents, freight forwarders and persons authorized to transact business on behalf of others.

The SRB issued working tariff updated on November 01, 2020 for implementation of sales tax rates on services rendered or provided within Sindh province.

Following are the services and rate of sales tax:

Shipping agents: 13 percent

Stevedores: 13 percent

Ship management service: 13 percent

Freight forwarders: 13 percent

However, a fixed rate of Rs500 per bill of lading or house bill of lading is also available on:

(i) services provided by freight forwarding agents in respect of issuance of bills of lading or house bills of lading.

(ii) input tax credit shall not be admissible.

Customs agents: 13 percent

Travel agents: 13 percent;

A reduced rate of five percent is also available with condition that input tax credit shall not be admissible.

Tour operators: 13 percent;

A reduced rate of five percent is available with condition that input tax credit adjustment shall not be allowed;

Further services provided or rendered by tour operators in relation to Hajj and Umrah tour services are exempted from the levy.

Recruiting agents: 13 percent;

A reduced rate of 8 percent is available on:

(i) recruiting agents who is stand-alone service provider and whose principal economic activity is related to recruitment of individuals or group of individuals for overseas employment in countries outside Pakistan.

(ii) Input tax credit adjustment shall not be admissible.

Advertising agents: 13 percent

Ship chandlers: 13 percent

Share transfer agents: 13 percent

Sponsorship services: 13 percent

Business support services: 13 percent

KARACHI: Sindh Revenue Board (SRB) has issued updated rates of sales tax on construction services. The SRB explained the rate of sales tax at normal, concessionary and exempted on construction services.

The SRB issued working tariff updated up to November 01, 2020.

Following are the rate of sales tax on construction services:

The SRB said that a general rate of 13 percent is applicable on the construction services.

However, a reduced rate at 8 percent is also available on following conditions:

(i) The benefit of this reduced rate is not available to persons, engaged in providing or rendering the construction services, who elect or opt to pay the statutory rate of tax at 13 per cent under the Special Procedure prescribed by the Board and avail of the input tax credit/adjustment facility as prescribed in the Act and rules

(ii) Input tax credit/adjustment shall not be admissible.

Another reduced rate at 5 percent is also available on following conditions:

(i) Construction service in relation to Government Civil Works for which expenditure is paid out of the expenditure budget of the Federal Government or the Local Government or the Cantonment Board.

(ii) Input tax credit/adjustment shall not be admissible.

The SRB said that sales tax on service is exempted on construction services related to:

(i) Construction work undertaken by a person whose annual turnover does not exceed 4 million rupees in a financial year;

(ii) Construction and development of EPZ, SEZ and diplomatic and counselor buildings; and

(iii) Construction of an independent private residential house, other than residential unit covered by tariff headings 9807.0000 or 9814.3000, having total covered area not exceeding 10,000 square feet.

KARACHI: Sindh Revenue Board (SRB) has notified sales tax rates on services rendered by restaurants in the province.

The SRB issued working tariff on November 01, 2020 updating rates of sales tax on services.

The SRB said that the sales tax rate shall be 13 percent on services provided or rendered by restaurants.

The provincial revenue authority said that services provided or rendered by restaurants whose turnover does not exceeds 4 million rupees in a financial year shall be exempted from the levy of 13 percent sales tax.

However, 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 Sindh Revenue Board (SRB) has announced a 13% sales tax rate on services provided by banking companies within the province. This update, effective from November 1, 2020, clarifies the applicable sales tax on a wide range of banking services.

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KARACHI: Sindh Revenue Board (SRB) has made mandatory for banking companies to provide quarterly reconciled statement of taxable services provided during the period.

The SRB issued notification No. SRB-3-4/17/2020 effective from July 01, 2020 to make it mandatory for banking and non-banking financing companies to submit quarterly reconciliation of sales taxable services provided or rendered during the period.

The financial institutions are required to provide particulars of services or services related fee, commission, brokerage or charges.

These services are included:

1. Branch baking customer free and commission
2. Consumer finance related fee and commission
3. Card related fee and commission (debit and credit cards)
4. Credit related fee and commission
5. Investment banking fee and commission
6. Commission and fee on foreign trade
7. Bill discounting commission and fee
8. Commission and brokerage on foreign exchange dealing
9. Commission and fee on guarantees, including bank guarantees
10. Commission and fee on cash management
11. Commission and fee on remittances, including home remittances
12. Commission and fee on bancassurance
13. Commission on commodity operations
14. Commission on handing of federal government or provincial or local government businesses
15. Fee or rent of safe deposit lockers and safe vaults
16. Services in respect of Hajj and Umrah
17. Services in respect of Musharika and Modarba
18. Services in respect of utility bills collection
19. Services provided as a banker to an issue
20. Services provided as a consultant to an issue
21. Financial leasing
22. Commodity or equipment leasing
23. Other leasing
24. Services in respect of Ijarah
25. Funds management services
26. Asset management services
27. Advisory services
28. Consultancy services
29. Other services

The reconciliation should include sales tax withheld by the banking/non-banking financial company as a withholding agent.

Sales tax of the banking/non-banking financial companies services withheld, if any, by others as withholding agents.