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  • Input tax credit against services provided by non-resident available with conditions: SRB

    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.

  • SRB revises sales tax jurisdiction of commissioners

    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.

  • SRB collects Rs105.9 billion in challenge economic situation

    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.

  • SRB makes mandatory for banks to provide quarterly statement of taxable services

    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:

    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.

  • SRB issues procedure for sales tax collection on renting tangible goods

    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).

  • SRB extends date for sales tax payment, return filing

    SRB extends date for sales tax payment, return filing

    KARACHI: Sindh Revenue Board (SRB) has extended date for payment and filing sales tax return for the month of May 2020.

    The SRB issued a notification extending the last date for e-deposit of Sindh sales tax for the tax period May 2020 and for e-filing of tax return for the tax period May 2020.

    The notification said that the SRB allowed the registered persons, including the withholding agents covered by provisions of the Sindh Sales Tax Special Procedure (Withholding) Rules, 2014:

    e-deposit the amounts of Sindh sales tax for the tax period May 2020 on or before Monday June 29, 2020; and

    e-file their returns for the tax period May 2020 on or before Thursday July 02, 2020.

  • Sindh exempts sales tax on life insurance service

    Sindh exempts sales tax on life insurance service

    KARACHI: Sindh government has exempted sales tax on services provided by life insurance companies for full fiscal year i.e. July 01, 2019 to June 30, 2020.

    Sindh Revenue Board (SRB) issued notification No. SRB-3-4/13/2020 dated June 22, 2020 stated that the Sindh government had granted exemption to the life insurance services (other than its related re-insurance services), classified under tariff heading 9813.1500 of the Second Schedule to the Sindh Sales Tax on Services Act, 2010, from whole of the sales tax payable thereon, as were provided or rendered during the period from July 01, 2019 to June 30, 2020.

    However, the relaxation is subject to following conditions:

    (a) the person providing or rendering life insurance services commences e-depositing, in the Sindh government’s head of account in the prescribed manner, the amount s of Sindh sales tax due, on such services for the tax periods from July 2020 onward; and

    (b) the amounts of Sindh sales tax charged or collected, if any, on such services during the period from the 1st day of July, 2019 to the 30th June, 2020, are e-deposited, by the person providing or rendering such services, in Sindh Government’s head of account “B-02384” in the prescribed manner by the 15th day of July, 2020.

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

  • SRB suspends sales tax registration of Turnotech for defaulting tax payment

    SRB suspends sales tax registration of Turnotech for defaulting tax payment

    KARACHI: Sindh Revenue Board (SRB) has suspended sales tax registration of M/s. Turnotech (Pvt) Limited defaulting tax payment and non-compliance of filing monthly returns.

    In a notice the SRB said that M/s. Turnotech (Pvt) Limited had failed to comply with the following obligations:

    — To discharge the Sindh sales tax liability against the services provided or rendered during the tax periods from March 2015 to July 2015, September 2015 to December 2015 and April 2016 to July 2018.

    — e-file their Sindh sales tax return for the tax periods from March 2015 to July 2015, September 2015 to December 2015 and April 2016 to July 2017.

    The SRB said that the suspension of the company would be revoked on taking following measures:

    — to discharge the due Sindh Sales Tax liability along with default surcharge for the tax periods from March 2015 to July 2015, September 2015 to December 2015 and April 2016 to July 2017.

    — to e-file the true and correct monthly Sindh sales tax returns for the tax periods from March 2015 to July 2015, September 2015 to December 2015 and April 2016 to July 2017, accordingly.

    The SRB said that the compliance date for remedial actions had been fixed on June 23, 2020. In case of non-satisfactory response or failure to take remedial measures the case would be proceeded for cancellation from the provincial tax authority.

  • Sindh Revenue Board announces tax incentive package

    Sindh Revenue Board announces tax incentive package

    KARACHI: Sindh Revenue Board (SRB) has announced tax incentive scheme and waived up to 100 percent penalty amount on payment of outstanding amount, said a statement on Monday.

    The SRB said that acceding to the request of the taxpayers, associations and tax bars, the provincial revenue authority, had issued tax incentive package, which provides substantial benefits and relief to the taxpayers, service providers and withholding agents, in return of their tax compliance, under the Sindh Sales Tax on Services Act, 2011.

    The package includes exemption of up to 100 percent of the amount of default surcharge, total remission of penalties and immunity from arrest and prosecution if the taxpayer deposits:

    1. the liability of the arrears of tax (as outstanding on May 31, 2020) plus zero percent of the amount of default surcharge thereon between June 01, 2020 and June 15, 2020;
    2. the liability of arrears tax (as outstanding on May 31, 2020) plus five percent of the amount of default surcharge thereon between June 16, 2020 and June 22, 2020; and
    3. the liability of arrears of tax (as outstanding on May 31, 2020) plus 10 percent of amount of default surcharge between June 23, 2020 and June 30, 2020.

    The SRB said that in case where no tax liability is outstanding but only the arrears of amounts of penalty and/or default surcharge are outstanding, tax incentive package allows the remission of 95 percent of the amount of such penalty and 90 percent of the amount of such default surcharge, if the balance of the amounts of penalty and default surcharge are deposited during the period from June 01, 2020 to June 30, 2020.

    The provincial revenue authority advised all taxpayers, service providers and withholding agents to avail the benefits of the tax incentive package which shall expire at the close of June 30, 2020.

    The incentives announced through the notification provide and opportunity to the taxpayers to get substantial waiver of their liability to pay penalties and default surcharge by depositing the outstanding amounts of tax liabilities during the period the said notification is valid.

    The SRB further said that the package may also help in resolution of disputes pending in litigation, appeals, adjudication or audit.

  • SRB urged to allow normal tax for car dealers

    SRB urged to allow normal tax for car dealers

    KARACHI: Sindh Revenue Board (SRB) has been urged to bring authorized dealers of car manufacturers into normal tax regime.

    Overseas Investors Chamber of Commerce and Industry (OICCI) in its proposals for budget 2020/2021 submitted to SRB, recommended that normal sales tax rate should be applied for services provided by authorized car dealers under tariff heading 9806.4000.

    It said that sales tax on services by authorized car dealers under tariff heading 9806.4000, is at reduced rates and input sales tax is barred, while no such position is available under any of the other provincial sales tax laws.

    Further, no option is available to the service provider to pay sales tax at the normal rate at the rate of 13 percent, instead of reduced rate, as provided for other services under notification No.SRB 3-4/5/2015 dated Jul 01, 2015, e.g. Construction services, Transportation services, Concrete services etc.

    The OICCI recommended that normal sales tax rate should be applied for services provided by authorized car dealers under tariff heading 9806.4000.

    Alternatively, option should be provided to “authorized car dealers of vehicle manufacturers” to pay sales tax at normal rate under tariff heading 9806.4000, as provided to other services.

    Application of standard rate will eliminate the discrimination arising on services provided by dealers in Sindh against other provinces and cost of doing business will reduce for service providers and recipients, it added.