Pkrevenue.com

Tag: Sindh Finance Bill 2019

  • Sindh adds 13 new services to provincial sales tax

    Sindh adds 13 new services to provincial sales tax

    KARACHI: The Sindh government has included 13 new services for the collection of sales tax from July 01, 2019.

    According to PwC A F Ferguson Chartered Accountants following services are proposed to trigger Sindh Sales Tax (SST) effective July 1, 2019:

    1. Renting of machinery, equipment, appliances and other tangible goods.

    2. Indoor sports and games center.

    3. Services provided or rendered by cab aggregator and owners or drivers of motor vehicles using the cab aggregator services.

    4. Warehouses or depots for storage or cold storages.

    5. Training services.

    6. Actuarial services.

    7. Services of mining of minerals and allied ancillary services

    8. Site preparation and clearance, excavation and earth moving and demolition services

    9. Waste collection, transportation, processing and management services

    10. Vehicle parking and valet services

    11. Electric power transmission services

    12. Insurance agents

    13. Tailoring and stitching services by fashion designers.

    For the purpose of taxing new services, certain definitions are proposed in the Finance Bill 2019.

    The chartered accountants said that no definitions have been proposed for ‘services of mining of mineral and allied & ancillary services in relation thereto’ and ‘electric power transmission services’.

    In the definition of training services, exclusion is proposed for ‘coaching or training of sports’ which is apparently for promotion of sports.

  • Withholding agents to be liable to pay tax on failure to deduct Sindh sales tax

    Withholding agents to be liable to pay tax on failure to deduct Sindh sales tax

    KARACHI: The Sindh government has proposed legislation to make withholding agents responsible to pay tax on which he fails to deduct or fails to deposit deducted amount to provincial kitty.

    The Sindh Finance Bill 2019 proposed that the withholding agent is personally liable if he either fails to deduct tax or having deducted tax fails to deposit the tax in the government treasury which is revocable along with default surcharge, according to a commentary on Sindh Budget 2019/2020 released by PwC A F Ferguson Chartered Accountants.

    They said that it may be noted that Section 47(1B) already provides for collection of any tax short withheld or collected from the withholding agent which has been challenged in courts on various grounds.

    “Hence, the apparent purpose of bringing the said provision within Section 13 in this Finance Bill may also be examined in that context,” they said.

    The government while imposing liability on withholding agents needs to cover a situation where the person from whom tax was not deducted has already paid the tax before initiation of recovery from the withholding agent.

    In such situation, there should be no recovery of principal amount of tax from the withholding agent who failed to deduct the tax from the payment.

    A clarification to this effect is required to be inserted by way of an explanation so that such amendment would avoid unnecessary litigation as to the double recovery of tax from the withholding agent as well from the registered service provider, they said.

  • Sindh tax on online taxi service creates anomaly

    Sindh tax on online taxi service creates anomaly

    KARACHI: The levy on online taxi services introduced by Sindh government has created an anomaly as those taxi services not connected to ‘cab aggregator’ will remain outside the ambit of this tax, tax experts said.

    The Sindh Finance Bill 2019 has proposed to tax services of the “Cab Aggregator” including the services provided or rendered by the owners or drivers of the motor vehicle using the cab aggregator services.

    The rate of tax is 13 per cent on total consideration for providing or rendering such services from July 1, 2019 onwards.

    The bill also defines “cab aggregator” to mean a person who is an aggregator or operator or intermediary or online marketplace who canvasses or solicits or facilitates passengers for travel by motor vehicles like tax, cab, car, van, motor cycle and rickshaw, and who connects the passenger or the intending passenger to a driver of any of the aforesaid motor vehicles through telephone cellular phone, internet, web-based services or GPS or GPRS-based services, electronic or digital means, whether or not he charges or collect any fee, fare, commission, brokerage or other charges or consideration for providing or rendering such services.

    “The aforesaid insertion in taxable services has created an anomaly whereby motor vehicles, like taxi, cab, car, van, motor cycle and rickshaw not connected to a cab aggregator will remain outside the ambit of such tax,” said PwC A F Ferguson Chartered Accountants in a commentary on Sindh Budget 2019/2020.

    They said that it appears that the aforesaid services will become uncompetitive compared to services of cabs, taxi, rickshaw etc. which are not connected to a cab aggregator.

    “Due to complex nature of operations, special procedure rules for chargeability and collection of tax on such services is required to be introduced separately,” they added.