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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SRB issues sales tax rate on telecom services
KARACHI: Sindh Revenue Board (SRB) on Tuesday updated working tariff up to November 01, 2020 for levy of sales tax on telecommunication services.
The sales tax on services are exempt on telecommunication services involving charges payable on the international leased lines or bandwidth services used by the software exporting firms registered with the Pakistan Software Export Board.
Following is the table for the application of sales tax on telecommunication services along with tariff headings:
9812.1000 Telephone services 19.5% 9812.1100 Fixed line voice telephone service 19.5% 9812.1200 Wireless telephone 19.5% 9812.1210 Cellular telephone 19.5% 9812.1220 Wireless Local Loop telephone 19.5% 9812.1300 Video telephone 19.5% 9812.1400 Payphone cards 19.5% 9812.1500 Prepaid calling cards 19.5% 9812.1600 Voice mail service 19.5% 9812.1700 Messaging service 19.5% 9812.1710 Short Message service (SMS) 19.5% 9812.1720 Multimedia message service (MMS) 19.5% 9812.1910 Shifting of telephone connection 19.5% 9812.1920 Installation of telephone 19.5% 9812.1930 Provision of telephone extension 19.5% 9812.1940 Changing of telephone connection 19.5% 9812.1950 Conversion of NWD connection to non NWD or vice versa 19.5% 9812.1960 Cost of telephone set 19.5% 9812.1970 Restoration of telephone connection 19.5% 9812.1990 Others 19.5% 9812.2000 Bandwidth services 19.5% 9812.2100 Copper line based 19.5% 9812.2200 Fibre-optic based 19.5% 9812.2300 Co-axial cable based 19.5% 9812.2400 Microwave based 19.5% 9812.2500 Satellite based 19.5% 9812.2900 Others 19.5% 9812.3000 Telegraph 19.5% 9812.4000 Telex 19.5% 9812.5000 Telefax 19.5% 9812.5010 Store and forward fax services 19.5% 9812.5090 Others 19.5% 9812.6000 Internet services 19.5% 9812.6100 Internet services including email services 19.5% 9812.6110 Dial-up internet services 19.5% 9812.6120 Broadband services for DSL connection 19.5% 9812.6121 Copper line based 19.5% 9812.6122 Fibre-optic based 19.5% 9812.6123 Co-axial cable based 19.5% 9812.6124 Wireless based 19.5% 9812.6125 Satellite based 19.5% 9812.6129 Others 19.5% 9812.6130 Internet/email/Data/SMS/MMS services on WLL networks 19.5% 9812.6140 Internet/email/Data/SMS/MMS services on cellular mobile networks 19.5% 9812.6190 Others 19.5% 9812.6200 Data Communication Network services (DCNS) 19.5% 9812.6210 Copper Line based 19.5% 9812.6220 Co-axial cable based 19.5% 9812.6230 Fibre-optic based 19.5% 9812.6240 Wireless/Radio based 19.5% 9812.6250 Satellite based 19.5% 9812.6290 Others 19.5% 9812.6300 Value added data services 19.5% 9812.6310 Virtual private Network services (VPN) 19.5% 9812.6320 Digital Signature service 19.5% 9812.6390 Others 19.5% 1[9812.7000 Other specified telecommunication services 19.5% 9812.7100 Audio Text Services 19.5% 9812.7200 Teletext services 19.5% 9812.7300 Trunk radio services 19.5% 9812.7400 Paging services including voice paging services and radio paging services 19.5% 9812.7900 Others 19.5% 9812.8000 Tracking and alarm service 19.5% 9812.8100 Vehicle tracking and other tracking services 19.5% 9812.8200 Burglar and security alarm services 19.5% 9812.8900 Others 19.5% 9812.9000 Telecommunication services not elsewhere specified] 19.5% -
SRB exempts sales tax on services for USAID funded programs
KARACHI: Sindh Revenue Board (SRB) on Thursday granted exemption from sales tax on services for projects funded by United States Agency for International Development (USAID).
The SRB in a statement said that with approval of the Sindh government it had exempted from the whole of the sales tax payable on such taxable services and are received or procured by the USAID or the Implementing Partners of the USAID under the Sindh Basic Education Program (SBEP) funded by way of grant-in-aid provided by the USAID under the framework of the Pakistan Enhanced Partnership Agreement (PEPA) of 2010 signed between the United States of America and the Islamic Republic of Pakistan.
The SRB through another notification to grant exemption from the whole of the sales tax payable on such taxable services and are received or procured by the Municipal Delivery Service Program- Sindh (MSDP) funded by way of grant-in-aid provided by the USAID under the framework of the Pakistan Enhanced Partnership Agreement (PEPA) of 2010 signed between the United States of America and the Islamic Republic of Pakistan.
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SRB suspends sales tax registration of seven taxpayers
KARACHI: Sindh Revenue Board (SRB) has suspended sales tax registration of seven taxpayers who failed to comply with filing of returns for four consecutive tax periods.
The SRB in a letter sent to Pakistan Automation Revenue (Pvt) Limited (PRAL) informed that the seven taxpayers had been suspended with immediate effect.
The SRB said that under Section 25(1)(a)(ii) of the Sindh Sales Tax on Services Act, 2011 provides that registration of a registered person can be suspended where registered person ‘has failed to comply with its obligation under the Act.’
Further, Rule 10 of the Sindh Sales Tax on Services Rules, 2011 also provides that where a registered person commits any act of fraud or deliberate and intentional non-payment, short payment or evasion of tax or non-filing of returns for four consecutive tax periods, the SRB or an officer of SRB authorized by the board in this behalf may suspend the registration of such person.
The SRB said that during scrutiny of tax profiles of the taxpayers, that SRB’s registered persons had failed to file their Sindh sales tax monthly returns for the last four consecutive tax periods i.e. May 2020 to July 2020.
This behavior of non-filing is in violation of the provincial tax laws.
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SRB collects Rs26.38 billion in July – September
KARACHI: Sindh Revenue Board (SRB) has collected Rs26.38 billion in July – September of the current fiscal year as compared with Rs22.89 billion in the same period of the last fiscal year, showing a growth of 15.2 percent.
A statement on Thursday said that heavy rains in the month of August 2020 severely compounded the woes of service sector businesses, already immensely high by COVID-19. Had that not been the case, the quarterly growth achieved by the SRB would have been better, it added.
During the month of September 2020, SRB collected Rs10.43 billion as compared to the collection of Rs8.9 billion during September 2019, showing a growth of 16.4 percent.
The SRB said that it acknowledged the support of the provincial government and dedication of its officials for realizing the revenue growth during the month and on the quarterly basis.
The SRB is focusing to achieve the assigned revenue collection target of Rs135 billion during the current fiscal year, although, the target is ambitious with a growth of 27 percent as compared to the collection of Rs106 billion during the last fiscal year.
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Input tax credit against services provided by non-resident available with conditions: SRB
KARACHI: Sindh Revenue Board (SRB) on Friday said that input tax credit for resident taxpayers receiving services from resident outside is available with certain condition.
The provincial revenue body said that the SRB-registered service recipients who receive taxable services from a foreign service provider (not registered with SRB) shall be entitled to claim input tax credit if:
(i) such SRB-registered person receives the taxable services against an invoice issued by that foreign service provider;
(ii) pays, to the foreign service provider, the consideration for the services so received by the resident service recipient; and
(iii) e-deposits the amount of Sindh sales tax, on such services in Sindh Government’s head of account “B-02384” in the prescribed manner.
The entitlement of input tax credit shall be in terms of the provisions of section 15 of the Act-2011, subject to the conditions, limitations and restrictions prescribed under the Act-2011 and the rules or notifications made thereunder (including the provisions of sections 15A and 15B of the Act-2011, rules 21, 22 and 22A of the Sindh Sales Tax on Services Rules, 2011(Rules-2011) and other provisions of various rules and notification issued thereunder).
The SBP said that a question had arisen whether input tax credits were admissible [where not otherwise inadmissible under the provisions of the Sindh Sales Tax on Services Act, 2011(Act-2011) or the rules/notifications issued thereunder] against an invoice issued by such a non-resident service provider who is resident outside Pakistan and does not hold Sindh Sales Tax Registration Number (SNTN). Also, in case it is admissible, the question is that what shall be the procedure in this regard.
The SBP further said that as regards the procedure for input tax credit claims, the resident SRB-registered person (service recipient, in this case) shall e-deposit (in Sindh Government head of account “B-02384” in the prescribed manner) the amounts of Sindh sales tax on such services as are received by him from a foreign service provider (not registered with SRB) against the SNTN of the service recipient himself.
Thereafter, the resident SRB-registered service recipient shall declare:
(i) his own (resident SRB-registered service recipient) name and SNTN in the column “Particulars of Buyer”; and
(ii) the date and number of the invoice issued by the foreign service provider in the column “Document/invoice” of Annex-C of his return SST-
For claiming input tax credit, he shall enter corresponding entries in Annex-A of his Form SST-03 and shall also declare the “Non-creditable input”, if any, in the relevant column of such Annex-`A’.
The invoice of the foreign service provider and the associated documents, including the document of evidence of payment of consideration through banking channel, shall form a part of the prescribed records for the purposes of section 26(1) of the Act-2011 and the rules made thereunder including rule 29 of the Rules-2011.
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SRB revises sales tax jurisdiction of commissioners
KARACHI: Sindh Revenue Board (SRB) on Monday revised jurisdiction of commissioners with effect from July 06, 2020.
Following is the revised jurisdiction of commissioners:
Commissioner-I
Unit 2: Hotels, motels and Guest Houses; restaurants; marriage halls and lawns; caterers; clubs and race clubs; event management services and exhibition services; out-door photographers and videographers; indoor sports and game center: vehicle parking and valet services.
Unit 4: Business support services; supply chain management or distribution (including delivery) services; call centers; visa processing services including advisory and consultancy services for migration or visa application filing services.
Unit 5: Ship management services; shipping agents; freight forwarding agents.
Unit 6: Ship chandlers; stevedores.
Unit 7: Customs agents.
Unit 8: Public bonded warehouses; warehouses and depots for storage or cold storage.
Unit 9: Banks; debt collection services and other debt recovery services provided or rendered by debt collection agencies or recovery agencies or other persons.
Unit 10: Insurance and re-insurance; insurance agents.
Unit 11: Non-banking financial institutions and companies; investment banks; investment advisory; fund and asset management; foreign exchange dealer, exchange company, money changer and money exchanger; commission and brokerage on foreign exchange dealings; issuance, processing and operation of credit and debit cards; ATM operations, maintenance and management services.
Unit 12: stockbrokers, futures brokers and commodity brokers; leasing; modaraba and musharika; share transfer agents; services provided’ or rendered by a registrar to an issue underwriters; credit rating agency.
Unit 13: Beauty parlors, beauty clinics, smiling clinics or centers and others; healthcare; gyms; physical fitness centers, body massage center; cosmetic and plastic surgery and transplantation; fashion designers; laundries and dry cleaners.
Unit 32: Terminal operators and port operators; dredging and desilting services.
Commissioner-II
Unit 1: telecommunication.
Unit 15: Security agencies.
Unit 23: Inter-city transportation or carriage of goods by road or through pipeline or conduit; packers and movers; electric power transmission services.
Unit 26: Fumigation services; janitorial services; waste collection, transportation, processing and management services, maintenance and cleaning services.
Unit 28: Legal practitioners and consultants and accountants and auditors; management consultants; software or IT based system development consultants; corporate law consultants; technical, scientific and engineering consultants; other consultants, including tax consultants, human resources and personnel development consultants.
Unit 29: Auto workshops and authorized service stations; workshop for machinery; workshop for electric or electronic equipment or appliances, etc, including computer hardware; car or automobile washing or similar services stations; car or automobile dealers; services provided or rendered by cab aggregator and services provided and rendered by the owners or drivers of the motor vehicles using the cab aggregator services; rent a car and automobile rental services.
Commissioner-III
Unit 3: Contact execution; erection, commissioning and installation services; construction services; ready mix concrete service; contractor of buildings; property developers or promoters; services of mining of minerals and allied and ancillary services in relation thereto; site preparation and clearance, excavation, earth moving and demolition services; architects or town planners; interior decorators.
Unit 14: Labour and manpower supply services; recruiting agents.
Unit 19: Advertisement on TV; advertisement on Radio; advertisement on billboards, signboards or digital boards; advertisement on poles; advertising agencies; public relation services.
Unit 20; Advertising on Cable TV and CCTV; cable TV Operators; other advertisements, including those on Web, Internet, etc.
Unit 21: Franchise services; intellectual property services.
Unit 22: Market Research Agency; sponsorship services; Programme producers and production houses.
Unit 24: Withholding of Sindh Sales Tax.
Unit 24A: Withholding of Sindh Sales Tax of all offices and departments of Federal, provincial and local or district governments.
Unit 27: Auctioneers; renting of immovable property services; purchase or sale or hire of immovable property; property dealers; renting of machinery, equipment, appliance and other tangible goods.
Unit 30: Toll manufacturing or processing; commission agents; indenters’ services.
Commissioner-IV
Unit 16: Surveyors; actuarial services; Technical inspection and certification services, including quality control certification services and ISO certification; valuation services, including competency and eligibility testing services.
Unit 17: Courier services.
Unit 18: Travel agents; tour operators.
Unit 25: Technical testing and analysis service; training services; services provided or rendered by laboratories, other than the services relating to pathological, radiological or diagnostic test of patients.
Unit 31: Airport services, airport operators, chartered flights services.
Commissioner-V
Unit 37: All matters related to SWWF and SWPF and other such matters as may be assigned by the Chairman/ Member/ Senior Advisor.
Commissioner (Sukkur)
Unit 33: Services provided or rendered in the Civil Division of Sukkur and Larkana.
Commissioner (Hyderabad)
Unit 34: Services provided or rendered in the Civil Division of Hyderabad, Shaheed Banazirabad and Mirpurkhas.
Commissioner (Appeals-I)
Unit 35: Appeals under sections 57, 58, 59 and 64 of the Sindh Sales Tax on Services Act, 2011, in relation to the orders passed or decisions made by the officers of the SRB in the matters and jurisdiction of the units under Commissioners-I, III, V and Hyderabad.
Commissioner (Appeals-II)
Unit 35A: made Appeals under sections 57, 58, 59 and 64 of the Sindh Sales Tax on Services Act, 2011, in relation to the orders passed or decisions by the officers of the SRB in the matters and jurisdiction of the units under Commissioners-II, IV, VI and Sukkur.
Commissioner (Audit)
Unit 36: Audit functions under the Sindh Sales on Services Act, 2011, and the rules and notifications issued thereunder. Matters relating to Revenue Receipt Audit, DAC and PAC and jurisdiction of the units under Commissioner-I, III, V & Hyderabad, Revenue reconciliation work and other such matters as may be assigned by the Chairman / Member.
Unit 36A: Audit functions under the Sindh Sales on Services Act, 2011, and the rules and notifications issued thereunder. Matters relating to Revenue Receipt Audit, DAC and PAC and jurisdiction of the units under Commissioner-II, IV & Sukkur, Revenue reconciliation work and other such matters as may be assigned by the Chairman / Member.
Where a service provider is engaged in the economic activity of providing or rendering more than one taxable service, as specified in column (3) of the above Table against Unit Nos. 1 to 32 (except Unit 24 and Unit No.24A), as specified in column (2), he shall be placed in the jurisdiction of the Unit, specified in column (2), relatable to the service which is his principal activity as per his registration particulars.
Where a service provider is engaged in an economic activity in the territorial jurisdiction specified against Unit Nos.33 and 34 but it has its place of business outside such territorial jurisdiction, the officers of the SRB in Unit Nos. 33 and 34, as the case may be, shall exercise concurrent powers and functions with the respective officers of the SRB in Unit Nos.1 to 32 (except Unit No.24 and Unit No.24A).
Where a service provider is also a withholding agent, the officers of the SRB in Unit No.24 and Unit No.24A shall exercise concurrent powers and functions with the respective officers of the SRB in Unit Nos. 1 to 23 and 25 and 34 in relation to the amounts of Sindh sales tax withheld or liable to be withheld under the provisions of the Sindh Sales Tax Special Procedure (Withholding) Rules of the years 2011 and 2014.
All the officers of the SRB in Unit Nos. 1 to 34 shall exercise the powers and functions in relation to audit under the Sindh Sales Tax on Services Act, 2011, and rules and notifications issued thereunder, concurrently with the officers of the SRB in Unit No.36 and 36A.
This issues in supersession of Notification No.SRB-3-4/36/2019 dated 26th November, 2019 and also all other previous notifications / amendments issued in relation thereto.
This notification shall take effect on and from the 6th July, 2020.
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SRB collects Rs105.9 billion in challenge economic situation
KARACHI: Sindh Revenue Board (SRB) has collected Rs105.9 billion as sales tax on service during fiscal year 2019/2020 despite challenging economic situation due to COVID-19.
According to a statement released on Wednesday the SRB collected Rs105.9 billion during fiscal year 2019/2020 as compared with Rs100.3 billion in the preceding fiscal year, showing 5.58 percent growth.
Out of total collection the SRB collected Rs5.6 billion as workers welfare fund.
“The milestone that SRB has reached represents a consistency of achievements, it has built since organization’s inception in 2011, courtesy the hard work and steadfastness demonstrated by its workforce, in work-culture dedicated to professional values,” according to the statement.
The year 2019/2020 had a particular significance arising from COVID-19. The employees put in their best, working beyond the normal call of duty, despite the lockdown, six days – week in the face of difficult circumstances arising from the pandemic.
The SRB also praised the taxpayers for their trust and cooperation ant the continuous support of the Sindh government without which the landmark performance of SRB would not have been possible.
The SRB is now eying on an overall target of Rs135 billion during 2020/2021 with a year on year growth of 27.5 percent.
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SRB makes mandatory for banks to provide quarterly statement of taxable services
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:
- Branch baking customer free and commission
- Consumer finance related fee and commission
- Card related fee and commission (debit and credit cards)
- Credit related fee and commission
- Investment banking fee and commission
- Commission and fee on foreign trade
- Bill discounting commission and fee
- Commission and brokerage on foreign exchange dealing
- Commission and fee on guarantees, including bank guarantees
- Commission and fee on cash management
- Commission and fee on remittances, including home remittances
- Commission and fee on bancassurance
- Commission on commodity operations
- Commission on handing of federal government or provincial or local government businesses
- Fee or rent of safe deposit lockers and safe vaults
- Services in respect of Hajj and Umrah
- Services in respect of Musharika and Modarba
- Services in respect of utility bills collection
- Services provided as a banker to an issue
- Services provided as a consultant to an issue
- Financial leasing
- Commodity or equipment leasing
- Other leasing
- Services in respect of Ijarah
- Funds management services
- Asset management services
- Advisory services
- Consultancy services
- 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.
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SRB issues procedure for sales tax collection on renting tangible goods
KARACHI: Sindh Revenue Board (SRB) on Monday issued procedure for collection of sales tax on services on renting of machinery, equipment, appliances and other tangible goods.
The SRB issued the rules for the levy, collection and payment of tax on the renting of machinery, equipment, appliances, and other tangible goods.
(1) This rule shall apply to the persons providing or rendering and also to the persons procuring or receiving the services of renting of machinery, equipment, appliances and other tangible goods as described against tariff heading 9806.6000 of the Second Schedule to the Act:
Provided that this rule shall not apply in the cases of the services of commodity or equipment leasing, hire purchase leasing and rent a car and automobile rental service as described against tariff headings 9813.3020, 9813.3030 and 9819.3000, respectively, of the Second Schedule to the Act.
(2) The rate of tax shall be 5 percent as prescribed against tariff heading 9806.6000 in the Table of notification No. SRB-3-4/8/2013 dated the 1 st July, 2013, subject to the conditions and restrictions prescribed therein.
(3) The liability to deposit the sales tax shall be:-
(a) on the person providing or rendering the services in the case the services are provided or rendered by a person in Sindh or from the place of business in Sindh; and
(b) on the person procuring or receiving the service in the case the where the services is procured or received from a person not resident in Pakistan.
(4) The amount of the sales tax involved shall be deposited in Sindh Government’s head of account “B-02384” by the 15th day of a month following the tax period to which it relates.
The tax return, in the prescribed form, shall be e-filed within 3 days from the due date of payment.
(5) The service providers shall maintain the records as are prescribed under the Act and the sub-rule (2) of rule 29.
In addition, the service provider shall also maintain an account of the stock of machinery, equipment, appliances and other tangible goods possessed by him for provision of the service. In addition, the service recipients procuring or receiving the services from the service providers not resident in Pakistan shall also maintain the record prescribed under the Act or rule 29(2).
(6) The services providers shall issue tax invoices in accordance with the provisions of rule 29(1).