Karachi, February 2, 2024 – The provinces of Pakistan have recorded an impressive collection of Rs 230 billion as sales tax on services during the first half (July – December) of fiscal year 2023-24, as per official data released by the federal finance ministry.
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Pakistan Collects Rs 417 Billion as Sales Tax on Services During FY23
Karachi, August 22, 2023 – Pakistan has achieved a significant milestone by collecting a total of Rs 417 billion as sales tax on services during the fiscal year 2022-23, as disclosed by official documents on Tuesday.
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Sales Tax Reduced to 5% for Islamabad Restaurants
Islamabad, July 23, 2023 – In a move to promote digital transactions and bolster tax compliance, the Federal Board of Revenue (FBR) has announced a significant reduction in the sales tax rate for restaurants in Islamabad.
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Beauty Parlors in Islamabad Required to Pay 15% Sales Tax on Services
In a recent development, beauty parlors and beauty clinics operating within the jurisdiction of Islamabad Capital Territory (ICT) are now obligated to pay a 15 percent sales tax on services, as per updated laws issued by the Federal Board of Revenue (FBR).
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IT Services Face 15% Sales Tax Imposition in Islamabad
Islamabad, July 4, 2023: The Federal Board of Revenue (FBR) has mandated a 15 percent sales tax on IT services and IT-enabled services within the jurisdiction of Islamabad, the capital city of Pakistan. This decision, effective from July 1, 2023, aims to enhance tax revenue collection in the IT sector.
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FBR Enforces 15% Sales Tax on Services Provided by Hotels in Islamabad
Islamabad, July 4, 2023: The Federal Board of Revenue (FBR) has recently implemented a 15 percent sales tax on various services offered by hotels, clubs, and other establishments in Islamabad. This decision aims to enhance revenue collection and streamline taxation procedures within the hospitality sector.
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Dental practitioners directed to get sales tax registration
KARACHI: Sindh Revenue Board (SRB) has directed dental practitioners to get registered for sales tax to avoid penal action.
The SRB in a circular issued September 21, 2022, said that the services of cosmetic dental surgery, orthodontics, aesthetic dentistry and such other cosmetic and aesthetic dental procedures are taxable services under tariff heading 9842.0000 of the Second Schedule to the Sindh Sales Tax on Services Act 2011 as per the definition provided under section 2 (29A) of the Act, 2011.
READ MORE: FBR advised to fix glitches for smooth filing of income tax returns
All Dental Practitioners providing the aforesaid taxable services are therefore advised to get e-registered with SRB by visiting www.e.srb.gos.pk and following the step by step procedure after entering the SNTN.
The service providers are also directed to charge, levy, and collect due Sindh sales tax at 13 per cent on the aforesaid taxable services and deposit the same in Sindh Government’s head of account “B-02384” in the prescribed manner.
READ MORE: Tax rates on profit from bank deposits during year 2022/2023
It further said that e-deposit the due amount of SST in any SRB-authorized branch of NBP by 15th of the month following the tax period to which it relates.
The dental practitioners are also advised e-file true and correct Sindh sales tax returns in Form SST-03 as prescribed under section 30 of the Act, 2011 by 18th of the month following the tax period to which it relates.
READ MORE: Up to 70% income tax imposed on dividends for year 2022-2023
For Example: Return filing and SST payment for the month of September is due on 15th and 18th of October, respectively.
The SRB said that full and timely compliance of above provision of law is expected and will be appreciated to avoid any penal action and legal consequences by the board.
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Foodpanda welcomes PRA tax concession to homechefs
LAHORE: Foodpanda, an online food delivery platform, has welcomed the reduction in sales tax by Punjab Revenue Authority (PRA) to homechefs – people operating from their homes.
In order to create a favorable business environment, the PRA decided to reduce sales tax on services being charged on commissions for home-based chefs.
The rebate reduced sales tax from 16 per cent to 5 per cent, allowing better profitability and growth potential for home chefs operating on online food delivery platforms such as foodpanda.
Home chefs are essentially people operating out of their home kitchens who sell food through online platforms such as foodpanda. The online food delivery company currently has 5,000+ registered home chefs who have been taken on board after stringent routine checks for food hygiene, quality, safety, packaging, etc. The company’s aim is to increase the home chefs base in the next two years and take it up to 100,000 registered home chefs.
Nauman Sikandar, CEO foodpanda, while sharing his thoughts said: “A big thank you to the Punjab Revenue Authority (PRA) from foodpanda and our home chefs. The reduction in sales tax being charged on commissions for home-based chefs comes as a welcome respite.
“This move will help grow a new sector which has significant potential for financial and economic inclusion, specifically women economic empowerment. It would be ideal that other provinces also follow suit and implement the same for home chefs.”
Shahzadi Asghar, a registered home chef at foodpanda, while sharing her gratitude said, “It’s very difficult to do business in today’s situation, that too a home-based business. Thanks to foodpanda and PRA that sales tax is now reduced by 11 per cent which in turn has significantly improved our margins. I am now thinking to expand my food venture with this favorable initiative.”
The visionary step by the Punjab Government must be supported by other provinces as the sector continues to grow exponentially across the country.
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Cable TV operators granted exemption of 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 31st 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 31st 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 1st day of July, 2018, and, if not rescinded earlier, shall stand rescinded on the 30th day of June, 2022.
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Sindh allows reduced rate of 5% sales tax on services to recruiting agencies
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 —30th day of June, 2022.