PROVINCIAL SALES TAX ON SERVICES ACTS

PROVINCIAL SALES TAX

ON SERVICES ACTSBY SYED MUHAMMAD IJAZ, FCA, LL.B. ADVOCATE HIGH COURT

PARTNER HUZAIMA IKRAM & IJAZ

Table of contents

Sources of the Statutes

Main Divisions

Issues Relating to Vires/Constitutional Issues

Construction and Scheme of Statutes

The Acts

The Authority/Board Acts

Rules

Changes brought through Finance Acts, 2016

Sources of the StatutesCONSTITUTIONAL BACKING

PRE-18TH CONSTITUTIONAL AMENDMENT

Article 70(4) (Introduction and Passing of Bills)- Two lists available

Fourth Schedule to the Constitution Containing Federal Legislative List

Part 1- Entries 1 to 59- Where only Federation can legislate

Part II- Entries 1 to 18- Where only Federation can legislate

Concurrent List Entry 1 to 47- Where Federation and Provinces both were competent to Legislate

Anything falling outside the Federal legislative list or concurrent list was exclusive provincial

domain

The 18th Constitutional Amendment.

Changes in article 70, 73

Article 142 – Clearly dividing powers of Federation and Provinces

Omission of Concurrent List

Changes in Part I and II of Fourth Schedule – Federal legislative List- Certain omissions,numbering and renumbering

Article 143- Inconsistency between Federal and Provincial Laws

Article 267A – Removal of difficulties

Article 270AA- Declaration and of Continuance of Laws

http://www.na.gov.pk/uploads/documents/1302138356_934.pdf

http://www.na.gov.pk/uploads/documents/1302138356_934.pdf

Article 165 & 165A when it comes to

Govt. Orgs.

Article 165 -Exemption of certain public property from taxation. & 165A- Power of Majlis-e-Shoora (Parliament) to impose tax on the income of certain corporations, etc.- Why they are notof help

The property vs Sales

Income vs Sales

The point of Sales

Incidence vs Charge

Supreme Court of Pakistan CA No. 493 of 2011 [M/s X. E. N. Shahpur Division (LJC) QuarrySub-Division, Sargodha vs. The Collector of Sales Tax (Appeals) Collectorate of CustomsFederal Excise and Sales Tax. ] by full bench. Property defined under article 260. Property ofthe Provincial Government or Federal Government Shall remain exempt.

Article 70(4) read with entry 49 of Part 1 of

Fourth Schedule to the Constitution 1973

49. Taxes on the sales and purchases of goods imported, exported, produced, manufactured or consumed [, except sales tax on services].

[Underlined Bold and Colored for emphasis]

What is still in the Federal domain

Goods

imported,

exported,

produced,

manufactured or

consumed

What is laid off from Federal domain

sales tax on services

Why article 142, 143, 144, 184 are so

Important

141 Extent of Federal and Provincial laws. Subject to the Constitution, [Majlis-e-Shoora(Parliament)] may make laws (including laws having extra-territorial operation) for the whole or anypart of Pakistan, and a Provincial Assembly may make laws for the Province or any partthereof.

142 Subject-matter of Federal and Provincial laws. Subject to the Constitution-

(a) [Majlis-e-Shoora (Parliament)] 306 shall have exclusive power to make laws with respect toany matter in the Federal Legislative List;

(b) Majlis-e-Shoora (Parliament) and a Provincial Assembly shall have power to make laws with respectto criminal law, criminal procedure and evidence.

(c) Subject to paragraph (b), a Provincial Assembly shall, and Majlis-e-Shoora (Parliament) shallnot, have power to make laws with respect to any matter not enumerated in the FederalLegislative List.

(d) Majlis-e-Shoora (Parliament) shall have exclusive power to make laws with respect to all matterspertaining to such areas in the Federation as are not included in any Province.

Continued-Article 143, 144, 184

143. Inconsistency between Federal and Provincial Law: If any provision of an Act of aProvincial Assembly is repugnant to any provision of an Act of Majlis-e-Shoora (Parliament)which Majlis-e-Shoora (Parliament) is competent to enact, then the Act of Majlis-e-Shoora(Parliament), whether passed before or after the Act of the Provincial Assembly, shall prevailand the Act of the Provincial Assembly shall, to the extent of the repugnancy, be void.

144 Power of [Majlis-e-Shoora (Parliament)] to legislate for [one] or more Provincesby consent.

184 Original Jurisdiction of Supreme Court. (1) The Supreme Court shall, to the exclusion of every other court, have original jurisdiction in any dispute between any two or more Governments.

Explanation.- In this clause, "Governments" means the Federal Government and the Provincial Governments.

(2) In the exercise of the jurisdiction conferred on it by clause (1), the Supreme Court shall pronounce declaratory judgments only.

(3) Without prejudice to the provisions of Article 199, the Supreme Court shall, if it considers that a question of public importance with reference to the enforcement of any of the Fundamental Rights conferred by Chapter I of Part II is involved have the power to make an order of the nature mentioned in the said Article.

Main DivisionsMAIN STATUES CREATED

Provinces and Areas Covered

Province of Punjab

Province of Sindh

Province of Khyber Pakhtunkhwa (KP)

Province of Baluchistan

Capital Territory

Main Arms of Sales Tax on Service

Statutes

Provincial Sales Tax on Services Acts

PUNJAB SALES TAX ON SERVICES ACT, 2012 (PSTSA)

SINDH SALES TAX ON SERVICES ACT, 2011

THE KHYBER PAKHTUNKHWA FINANCE ACT, 2013

BALOCHISTAN SALES TAX ON SERVICES ACT 2015

ISLAMABAD CAPITAL TERRITORY (TAX ON SERVICES) ORDINANCE, 2001

Revenue Authority/Board Acts

PUNJAB REVENUE AUTHORITY ACT, 2012

SINDH REVENUE BOARD ACT, 2010

KHYBER PAKHTUNKHWA REVENUE AUTHORITY-KP FACT 2013 & 2014

BALOCHISTAN REVENUE AUTHORITY ACT, 2015

ISD has adopted Sales Tax Act, 1990 definitions for Interpretation

THE SALES TAX ON SERVICES-

PUNJAB

PUNJAB SALES TAX ON SERVICES LAW• The Punjab Sales Tax on Services Act 2012

• The Punjab Sales Tax on Services (Recovery) Rules 2012

• The Punjab Sales Tax on Services (Registration and De-registration) Rules 2012

• The Punjab Sales Tax on Services (Filing of Returns) Rules 2012

• The Punjab Sales Tax on Services (Adjustment of Tax) Rules 2012

• The Punjab Sales Tax on Services (Specific Provisions) Rules 2012

• The Punjab Sales Tax on Services (Computerized System) Rules 2012

• The Punjab Sales Tax on Services (Authorized Representatives) Rules 2012

• The Punjab Sales Tax on Services (Audit) Rules 2012

• The Punjab Sales Tax on Services (Adjudication and Appeals) Rules 2012

• The Punjab Sales Tax on Services (Alternative Dispute Resolution) Rules 2012

• The Punjab Sales Tax on Services (Definitions) Rules 2012

• The Punjab Sales Tax on Services (Withholding) Rules 2015

• THE PUNJAB REVENUE AUTHORITY ACT 2012

• Circulars

• Circular Letters

• Notifications

THE SALES TAX ON SERVICES-SINDH

SINDH SALES TAX ON SERVICES LAW

• The Sindh Sales Tax on Services Act, 2011

• The Sindh Sales Tax on Services Rules, 2011

• The Sindh Sales Tax Special Procedure (Withholding) Rules, 2011

• The Sindh Revenue Board (reward) Rules, 2012

• THE SINDH REVENUE BOARD ACT, 2010

• Circulars

• Circular Letters

• Notifications

THE SALES TAX ON SERVICES-KP &

BL

• KP Finance Act, 2013 & 2014

• Khyber Pakhtunkhwa Sales Tax on Services Special Procedure (Withholding)

Regulation, 2015

• The Balochistan Sales Tax on Services Act, 2015 (Act No VI of 2015)

• Balochistan Revenue Authority Act, 2015

ISSUES RELATING TO

VIRES-MAIN ISSUESLEGISLATIVE COMPETENCE

MAJOR CONSTITUTIONAL ISSUES

Legislative competence

Provinces can make laws only for their province or a part thereof- Reverse charge is stepping

outside the constitutional command of provincial legislature.

Federation under entry 49 is still competent to legislate for manufacturing of goods. Provinces have

no authority to tax under the garb of services.

Any provincial law made before or after the 18th amendment where provinces are transgressing in

their powers by stepping in Federation's domain are ultravires to that extent.

Supreme Court under article 184 can only assume jurisdiction in case of dispute. Here the matters

are quite clear.

Services are very different from a “Process/Manufacturing” and neither can be stored nor can take

physical shape

CONSTRUCTION AND

SCHEMESCHEME OF THE ACTS

THE SALES TAX ON SERVICES ACTS

PSTSA SSTSA KPTSA BSTSA CSTSA

PREAMBLE

CHAPTER 1

PRELIMINARY

Short title, extent and commencement 1 1 1 1 1

Definitions. 2 2 2 2 2

Taxable service 3 3 19 3

Application of principles of origin and reverse charge in certain situations.– 4 20 4

Amendment in Second Schedule 5 11 21 5

Economic activity 6 4 22 6

Value of a taxable service 7 5 23 7

Open market price. 8 6 24 8

Provision of services over a period of time. 9 7 25 9


Chapter II

SCOPE OF TAX

Scope of tax and allied matters 10 8 26 10 3

Person liable to pay tax. 11 9 27 11

Exemptions 12 10 28 12

Effect of change in the rate of tax 13 12 29 13

Special procedure and tax withholding provisions 14 13 30 14

Delegation of power to collect, administer and enforce tax on certain services 15 14 31 15

Adjustments 16 15 32 16




Chapter III

PAYMENT AND COLLECTION OF TAX ON TAXABLE SERVICES

Collection of excess tax 17 16 33 17

Time, manner and mode of payment 18 17 34 18

Joint and several liability of registered persons where tax unpaid 19 18 35 19

Sales of taxable activity or transfer of ownership 20 19 36 20

Estate of deceased person 21 20 37 21

Estate in bankruptcy. 22 21 38 22

Liability for payment of tax in case of private companies or business enterprises 23 22 39 23

Assessment of tax. 24 23 40 24


Chapter IV

REGISTRATION

Registration. 25 24 41 25

Voluntary registration 26 24A 42 26

Compulsory registration 27 24B 43 27

Suspension of registration 28 25 45 28

De-registration 29 25A 46 29

Restoration of registrations 29A

Application for registration 44




Chapter V

BOOK KEEPING AND AUDIT PROCEEDINGS

Issuance of tax invoices. 30 47 30

Records 31 26 48 31

Retention and production of records and documents 32 27 49 32

Audit proceedings 33 28 50 33

Special audit by chartered accountants or cost accountants 34 29 51 34


Chapter VI

RETURNS

Return 35 30 52 35

Special returns 36 31 53 36

Final return 37 32 54 37

Return deemed to have been made 38 33 55 38




Chapter VII

APPOINTMENT OF AUTHORITIES AND THEIR POWERS

Appointment of authorities 39 34 56 39

Powers 40 35 40

Distribution of powers 41 36 41

Special Judges 42 37 57 42

Cognizance of offence 43 38 58 43

Application of the Code of Criminal Procedure, 1898 44 39 59 44

Exclusive jurisdiction of Special Judge 45 40 60 45

Place of sitting 46 41 61 46

Persons who may conduct prosecution 47 42 62 47

106, 107, 108

THE SALES TAX ACTS


Chapter VIII

OFFENCES AND PENALTIES

Offences and penalties. 48 43 64 48

Default surcharge 49 44 65 49

Exemption from penalty and default surcharge 50 45 66 50

Compounding of offences 51 46 67 51

Recovery of tax not levied or short-levied 52 47 68 52

Power to summon persons to give evidence and produce documents 53 48 69 53

Power to arrest and prosecute 54 49 70 54

Procedure to be followed on arrest of a person. 55 50 71 55

Authorized officers to have access to premises, stocks, accounts and records. 56 51 72 56

Obligation to produce documents and provide information 57 52 73 57

Searches under warrants 58 53 74 58

Posting of an officer to business premises 59 54 75 59

Powers of adjudication 60 76 60

Revision by the Commissioner 61 55 77 61

Revision by the Authority 62 56 78 62



Chapter IX

APPEALS

Appeals 63 57 79 63

Procedure in appeal. 64 58 80 64

Decision in appeal 65 59 81 65

Appointment of the Appellate Tribunal 60 82 66

Appeal to the Appellate Tribunal 66 61 84 67

Disposal of appeals by the Appellate Tribunal 67 62 85 68

Deposit of the tax demand while appeal is pending 68 64 88 70

Alternate dispute resolution 69 65 89 71

Reference to the High Court 63 86 69

Appeal to the High Court 63

Government may appoint 1[an Ombudsman] 65A

Conduct of business by Appellate Tribunal. 83


Chapter X

RECOVERY OF ARREARS

Recovery of arrears of tax 70 66 87 72

Chapter XI

AGENTS, REPRESENTATIVES AND E-INTERMEDIARIES

Agent 71 67 90 73

Liability and obligations of agents 72 68 91 74

Liability of the registered person for the acts of his agent 73 69 75

Appearance by authorized representative 74 70 92 76

E-intermediaries to be appointed 75 71 93 77



Chapter XII

GENERAL ADMINISTRATION

Power to make rules 76 72 113, 114 78

Computerized system 77 73 95 79

Service of orders and decisions 78 75 96 80

Correction of clerical errors 79 76 100 81

Issuance of duplicate of the tax documents 80 77 97 82

Power to issue orders, instructions and directions 81 78 109 83

Officers of the Authority to follow orders 82 79 104 84

Deposit of Taxes collected 101

Representation 105


Chapter XIII

MISCELLANEOUS

Computation of limitation period 83 80 98 85

Condonation of time-limit 84 81 99 86

Bar of suits, prosecution and other legal proceedings 85 82 111 87

Removal of difficulties. 86 74 115 88

Repeal and savings 87 83 117, 112, 116 89

Prize schemes to promote tax culture 88

Reward to whistleblowers 89

Research and Development 102

SCHEDULES UPDATED

FACT 2015

Schedules

Schedule 1 & 2

HS codes vs narratives

Chargeability is dependent on narrative i.e. Schedule 2

Redundancy of Schedule 1

ISD BALOCHISTAN KPK Sindh PUNJAB ISD BLCHTN KPK Sindh PUNJAB

Classification Classification2[Tariff

heading]

Classification Description

-1 (1.00) 1 (1.00) -2

98.01 98.01 98.01 98.01 Services provided by hotels, restaurants, marriage halls, lawns, clubs and caterers. - - - - -

9801.1000 9801.1000 9801.1000 9801.1000 Services provided by hotels 16.00% 15.00% 15.00% 14.00% 16%

9801.2000 9801.2000 9801.2000 9801.2000 Services provided by restaurants 15.00% 15.00% 14.00% 16%

9801.3000 9801.3000 9801.3000 9801.3000 Services provided by marriage halls and lawns 16.00% 15.00% 15.00% 14.00% 16%

9801.4000 9801.4000 9801.4000 9801.4000 Services provided by clubs 16.00% 15.00% 15.00% 14.00% 16%

9801.5000 9801.5000 9801.5000 9801.5000 Services provided by caterers, suppliers of food and drinks 16.00% 15.00% 15.00% 14.00% 16%

9801.6000 9801.6000 9801.6000 9801.6000 Ancillary services provided by hotels, restaurants, marriage halls, lawns, caterers 16.00% 15.00% 15.00% 14.00% 16%

9801.7000 9801.7000 9801.7000 9801.7000 Services provided by messes and hostels

9801.9000 9801.9000 9801.9000 9801.9000 Other 16%

98.02 98.02 98.02 98.02 Advertisements - - - -

9802.1000 9802.1000 9802.1000 9802.1000 Advertisements on T.V. 16.00% 15.00% 15.00% 14.00% 16%

9802.2000 9802.2000 9802.2000 9802.2000 Advertisements on radio 16.00% 15.00% 15.00% 14.00% 16%

9802.3000 9802.3000 9802.3000 9802.3000 Advertisements on closed circuit T.V. 15.00% 15.00% 14.00% 16%

9802.4000 9802.4000 9802.4000 9802.4000 Advertisements in newspapers and periodicals 15.00% 15.00% 14.00% 5%

9802.5000 9802.5000 9802.5000 9802.5000 Advertisements on cable T.V. network 15.00% 15.00% 14.00% 16%

Yes appicable 1[9802.6000 6[9802.6000 Yes appicable Advertisements on poles 15.00% 15.00% 14.00% 16%

Yes appicable 9802.7000 9802.7000 Yes appicable Advertisements on bill boards 15.00% 15.00% 14.00% 16%

not applicable 9802.8000 not applicable not applicable Sale of Space for Advertisement services.] 15.00%

Advertisement on Website or Internet 15.00% 16%

9802.9000 9802.9000 9802.9000 9802.9000 Other 15.00% 14.00%

not applicable 1[9802.9010 not applicable not applicable TV, Radio & Production Services. 15.00%

not applicable 9802.9020 not applicable not applicable Broadcasting Services.] 15.00%

98.03 98.03 not applicable 98.03 Facilities for travel

9803.1000 9803.1000 not applicable 9803.1000 Travel by air of passengers within the territorial jurisdiction of Pakistan

9803.1100 9803.1100 not applicable 9803.1100 Travel by air of passengers embarking on international journey from Pakistan

9803.2000 9803.2000 not applicable 9803.2000 Domestic travel by train

9803.2100 9803.2100 not applicable 9803.2100 International travel by train

not applicable 9803.9000 not applicable 9803.9000 Other 16.00% 16%

98.04 98.04 not applicable 98.04 Services provided for inland carriage of goods.

9804.1000 9804.1000 not applicable 9804.1000 Carriage of goods by air

9804.2000 9804.2000 not applicable 9804.2000 Carriage of goods by train

9804.9000 9804.9000 not applicable 9804.9000 Other 16.00% 16%

98.05 98.05 98.05 98.05 Services provided by persons authorized to transact business on behalf of others.

9805.1000 9805.1000 9805.1000 9805.1000 Shipping agents 15.00% 15.00% 14.00% 16%

9805.2000 9805.2000 9805.2000 9805.2000 Stevedores 16.00% 15.00% 15.00% 14.00% 16%

9805.2100 9805.2100 9805.2100 9805.2100 Ship management service 15.00% 15.00% 14.00%

9805.3000 9805.3000 9805.3000 9805.3000 Freight forwarding agents Higher of 16% or Rs. 400/BL 15.00% 15.00% 14.00% Rs. 400 per bill of lading

9805.4000 9805.4000 9805.4000 9805.4000 Customs agents 16.00% 15.00% 15.00% 14.00% 16%

9805.5000 9805.5000 9805.5000 9805.5000 Travel agents 16.00% 14.00% 16%

9805.5100 9805.5100 9805.5100 9805.5100 Tour operators 16.00% 15.00% 15.00% 14.00% 16%

9805.6000 9805.6000 9805.6000 9805.6000 Recruiting agents 16.00% 15.00% 14.00% 16%

9805.7000 9805.7000 9805.7000 9805.7000 Advertising agents 16.00% 15.00% 15.00% 14.00% 16%

9805.8000 9805.8000 9805.8000 9805.8000 Ship chandlers 16.00% 15.00% 15.00% 14.00% 16%

9805.9000 9805.9000 9805.9000 9805.9000 Share transfer agent 16.00% 15.00% 15.00% 14.00% 16%

9805.9100 9805.9100 9805.9100 9805.9100 Sponsorship services 15.00% 15.00% 14.00%

9805.9200 9805.9200 9805.9200 9805.9200 Business support services 16.00% 15.00% 15.00% 14.00% 16%

9805.9090 9805.9090 9805.9090 9805.9090 Other

98.06 98.06 98.06 98.06 Services provided in matters of hire.

9806.1000 9806.1000 9806.1000 9806.1000 Purchase or sale of moveable or immovable goods or property 15.00% 14.00%

9806.2000 9806.2000 9806.2000 9806.2000 Property dealers 16.00% 15.00% 15.00% 14.00% 16%

9806.3000 9806.3000 2[9806.3000 9806.3000 Car/automobiles dealers 15.00% 15.00% 14.00% 16%

not applicable not applicable 9806.4000 not applicable Car or automobile dealers 16.00% 15.00% 14.00%

not applicable not applicable 9806.5000 not applicable Dealers of second hand goods other than cars or automobiles

9806.9000 9806.9000 9806.9000 9806.9000 Dealers of second hand goods other than automobiles other

9807.0000 9807.0000 9807.0000 9807.0000 Services provided by property developers and promoters. 16.00% 15.00% 14.00% @Rs100/SqYd for LD & Rs 50/Sf for BC

9808.0000 9808.0000 9808.0000 9808.0000 Courier services 16.00% 15.00% 15.00% 14.00% 16%

9809.0000 9809.0000 9809.0000 9809.0000 Services provided by persons engaged in contractual execution of work or furnishing supplies. 16.00% 15.00% 15.00% 14.00% 16%

not applicable [9809.1000 not applicable not applicable Printing Services]

9810.0000 9810.0000 9810.0000 9810.0000 Services provided for personal care by beauty parlors/clinics, slimming clinics and others. 16.00% 15.00% 16.00% 14.00% 16%

9811.0000 9811.0000 9811.0000 9811.0000 Services provided by laundries, dry cleaners. 16.00% 15.00% 15.00% 14.00% 16%

98.12 98.12 98.12 98.12 Telecommunication services. 19.50% 19.50% 19.50% 19.50%

9812.1000 9812.1000 9812.1000 9812.1000 Telephone services 19.50% 19.50% 19.50% 19.50%

9812.1100 9812.1100 9812.1100 9812.1100 Fixed line voice telephone service 19.50% 19.50% 19.50% 19.50%

9812.1200 9812.1200 9812.1200 9812.1200 Wireless telephone 19.50% 19.50% 19.50% 19.50%

9812.1210 9812.1210 9812.1210 9812.1210 Cellular telephone 19.50% 19.50% 19.50% 19.50%

9812.1220 9812.1220 9812.1220 9812.1220 Wireless Local Loop telephone 19.50% 19.50% 19.50% 19.50%

9812.1300 9812.1300 9812.1300 9812.1300 Video telephone 19.50% 19.50% 19.50% 19.50%

9812.1400 9812.1400 9812.1400 9812.1400 Payphone cards 19.50% 19.50% 19.50% 19.50%

9812.1500 9812.1500 9812.1500 9812.1500 Prepaid calling cards 19.50% 19.50% 19.50% 19.50%

9812.1600 9812.1600 9812.1600 9812.1600 Voice mail service 19.50% 19.50% 19.50% 19.50%

9812.1700 9812.1700 9812.1700 9812.1700 Messaging service 19.50% 19.50% 19.50%

9812.1710 9812.1710 9812.1710 9812.1710 Short Message service (SMS) 19.50% 19.50% 19.50% 19.50%

9812.1720 9812.1720 9812.1720 9812.1720 Multimedia message service (MMS) 19.50% 19.50% 19.50% 19.50%

9812.1910 9812.1910 9812.1910 9812.1910 Shifting of telephone connection 19.50% 19.50% 19.50% 19.50%

9812.1920 9812.1920 9812.1920 9812.1920 Installation of telephone extension 19.50% 19.50% 19.50% 19.50%

9812.1930 9812.1930 9812.1930 9812.1930 Provision of telephone extension 19.50% 19.50% 19.50% 19.50%

9812.1940 9812.1940 9812.1940 9812.1940 Changing of telephone connection 19.50% 19.50% 19.50% 19.50%

9812.1950 9812.1950 9812.1950 9812.1950 Conversion of NWD connection to non NWD or vice versa 19.50% 19.50% 19.50% 19.50%

9812.1960 9812.1960 9812.1960 9812.1960 Cost of telephone set 19.50% 19.50% 19.50% 19.50%

9812.1970 9812.1970 9812.1970 9812.1970 Restoration of telephone connection 19.50% 19.50% 19.50% 19.50%

9812.1990 9812.1990 9812.1990 9812.1990 Others 19.50% 19.50% 19.50%

9812.2000 9812.2000 9812.2000 9812.2000 Bandwidth services 19.50% 19.50% 19.50% 19.50%

9812.2100 9812.2100 9812.2100 9812.2100 Copper line based 19.50% 19.50% 19.50% 19.50%

9812.2200 9812.2200 9812.2200 9812.2200 Fibre-optic based 19.50% 19.50% 19.50% 19.50%

9812.2300 9812.2300 9812.2300 9812.2300 Co-axial cable based 19.50% 19.50% 19.50% 19.50%

9812.2400 9812.2400 9812.2400 9812.2400 Microwave based 19.50% 19.50% 19.50% 19.50%

9812.2500 9812.2500 9812.2500 9812.2500 Satellite based 19.50% 19.50% 19.50% 19.50%

not applicable 1[9812.2600 not applicable not applicable Voice over I. P services 19.50% 19.50%

not applicable 9812.2700 not applicable not applicable Teleconferencing services 19.50% 19.50%

not applicable 9812.2800 not applicable not applicable 3G/4G LTE services] 19.50%

9812.2900 9812.2900 9812.2900 9812.2900 Others 19.50% 19.50% 19.50%

9812.3000 9812.3000 9812.3000 9812.3000 Telegraph 19.50% 19.50% 19.50% 19.50%

9812.4000 9812.4000 9812.4000 9812.4000 Telex 19.50% 19.50% 19.50% 19.50%

9812.5000 9812.5000 9812.5000 9812.5000 Telefax 19.50% 19.50% 19.50% 19.50%

9812.5010 9812.5010 9812.5010 9812.5010 Store and forward fax services 19.50% 19.50% 19.50% 19.50%

9812.5090 9812.5090 9812.5090 9812.5090 Others 19.50% 19.50% 19.50%

9812.6000 9812.6000 9812.6000 9812.6000 Internet services 19.50% 19.50% 19.50% 19.50%

9812.6100 9812.6100 9812.6100 9812.6100 Internet services including email services 19.50% 19.50% 19.50% 19.50%

9812.6110 9812.6110 9812.6110 9812.6110 Dial-up internet services 19.50% 19.50% 19.50% 19.50%

9812.6120 9812.6120 9812.6120 9812.6120 Broadband services for DSL connection 19.50% 19.50% 19.50% 19.50%

9812.6121 9812.6121 9812.6121 9812.6121 Copper line based 19.50% 19.50% 19.50% 19.50%


9812.6123 9812.6123 9812.6123 9812.6123 Co-axial cable based 19.50% 19.50% 19.50% 19.50%

9812.6124 9812.6124 9812.6124 9812.6124 Wireless based 19.50% 19.50% 19.50% 19.50%

9812.6125 9812.6125 9812.6125 9812.6125 Satellite based 19.50% 19.50% 19.50% 19.50%

9812.6129 9812.6129 9812.6129 9812.6129 Others 19.50% 19.50% 19.50%

9812.6130 9812.6130 9812.6130 9812.6130 Internet/email/Data/SMS/MMS services on WLL networks 19.50% 19.50% 19.50% 19.50%

9812.6140 9812.6140 9812.6140 9812.6140 Internet/email/Data/SMS/MMS services on cellular mobile networks 19.50% 19.50% 19.50% 19.50%

9812.6190 9812.6190 9812.6190 9812.6190 Others 19.50% 19.50% 19.50%

9812.6200 9812.6200 9812.6200 9812.6200 Data Communication Network services (DCNS) 19.50% 19.50% 19.50% 19.50%

9812.6210 9812.6210 9812.6210 9812.6210 Copper Line based 19.50% 19.50% 19.50% 19.50%

9812.6220 9812.6220 9812.6220 9812.6220 Co-axial cable based 19.50% 19.50% 19.50%


9812.6240 9812.6240 9812.6240 9812.6240 Wireless/Radio based 19.50% 19.50% 19.50% 19.50%

9812.6250 9812.6250 9812.6250 9812.6250 Satellite based 19.50% 19.50% 19.50% 19.50%

9812.6290 9812.6290 9812.6290 9812.6290 Others 19.50% 19.50% 19.50%

9812.6300 9812.6300 9812.6300 9812.6300 Value added data services 19.50% 19.50% 19.50% 19.50%

9812.6310 9812.6310 9812.6310 9812.6310 Virtual private Network services (VPN) 19.50% 19.50% 19.50% 19.50%

9812.6320 9812.6320 9812.6320 9812.6320 Digital Signature service 19.50% 19.50% 19.50% 19.50%

9812.6390 9812.6390 9812.6390 9812.6390 Others 19.50% 19.50% 19.50%

9812.9000 9812.9000 9812.9000 9812.9000 Audio text services 19.50% 19.50% 19.50% 19.50%

9812.9100 9812.9100 9812.9100 9812.9100 Tele-text services 19.50% 19.50% 19.50% 19.50%

9812.9200 9812.9200 9812.9200 9812.9200 Trunk radio services 19.50% 19.50% 19.50% 19.50%

9812.9300 9812.9300 9812.9300 9812.9300 Paging services 19.50% 19.50% 19.50% 19.50%

9812.9400 9812.9400 9812.9400 9812.9400 Voice paging services 19.50% 19.50% 19.50% 19.50%

9812.9410 9812.9410 9812.9410 9812.9410 Radio paging services 19.50% 19.50% 19.50% 19.50%

9812.9490 9812.9490 9812.9490 9812.9490 Vehicle tracking services 19.50% 19.50% 19.50% 19.50%

9812.9500 9812.9500 9812.9500 9812.9500 Burglar alarm services 19.50% 19.50% 19.50% 19.50%

9812.9090 9812.9090 9812.9090 9812.9090 Others 19.50% 19.50% 19.50%

Long Distance International 19.50%

Others 19.50%

Software exporting firms registered with the Pakistan Software Export Board 19.50%

Data and Internet Service Providers licensed by PTA 19.50%

98.13 98.13 98.13 98.13

Services provided by banking companies, insurance companies, cooperative financing societies

modarbas, musharikas, leasing companies, foreign exchange dealers, non-banking financial

institutions and other persons dealing in any such services. 16%

9813.1000 9813.1000 9813.1000 9813.1000 Services provided in respect of insurance to a policy holder by an insurer, including a reinsure. 15.00% 14.00% 16%

9813.1100 9813.1100 9813.1100 9813.1100 Goods insurance 15.00% 15.00% 14.00% 16% GPrm

9813.1200 9813.1200 9813.1200 9813.1200 Fire insurance 15.00% 15.00% 14.00% 16% GPrm

9813.1300 9813.1300 9813.1300 9813.1300 Theft insurance 15.00% 15.00% 14.00% 16% GPrm

9813.1400 9813.1400 9813.1400 9813.1400 Marine insurance 15.00% 15.00% 14.00% 16% GPrm

9813.1500 9813.1500 9813.1500 9813.1500 Life insurance 15.00% 14.00% 16% GPrm

9813.1600 9813.1600 9813.1600 9813.1600 Other insurance 15.00% 15.00% 14.00% 16% GPrm

9813.2000 9813.2000 9813.2000 9813.2000 Services provided in respect of advances and loans 16%

9813.3000 9813.3000 9813.3000 9813.3000 Services provided in respect of leasing 15.00% 15.00% 14.00% 16%

9813.3010 9813.3010 9813.3010 9813.3010 Financial leasing 15.00% 15.00% 14.00% 16%

9813.3020 9813.3020 9813.3020 9813.3020 Commodity or equipment leasing 15.00% 15.00% 14.00% 16%

9813.3030 9813.3030 9813.3030 9813.3030 Hire-purchase leasing 15.00% 15.00% 14.00% 16%

9813.3090 9813.3090 9813.3090 9813.3090 Other 15.00% 16%

9813.3900 9813.3900 9813.3900 9813.3900 Services provided in respect of musharika financing 15.00% 14.00% 16%

9813.4000 9813.4000 9813.4000 9813.4000 Services provided by banking companies in relation to: 15.00% 14.00% 16%

9813.4100 9813.4100 9813.4100 9813.4100 Guarantee 15.00% 15.00% 14.00% 16%

9813.4200 9813.4200 9813.4200 9813.4200 Brokerage 15.00% 15.00% 14.00% 16%

9813.4300 9813.4300 9813.4300 9813.4300 Letter of credit 15.00% 15.00% 14.00% 16%

9813.4400 9813.4400 9813.4400 9813.4400 Issuance of pay order and demand draft 15.00% 15.00% 14.00% 16%

9813.4500 9813.4500 9813.4500 9813.4500 Bill of exchange 15.00% 15.00% 14.00% 16%

9813.4600 9813.4600 9813.4600 9813.4600 Transfer of money including telegraphic transfer, mail transfer and electronic transfer 15.00% 15.00% 14.00% 16%

9813.4700 9813.4700 9813.4700 9813.4700 Bank guarantee 15.00% 15.00% 14.00% 16%

9813.4800 9813.4800 9813.4800 9813.4800 Bill discounting commission 15.00% 15.00% 14.00% 16%

9813.4900 9813.4900 9813.4900 9813.4900 Safe deposit lockers 15.00% 15.00% 14.00% 16%

9813.4910 9813.4910 9813.4910 9813.4910 Safe vaults 15.00% 15.00% 14.00% 16%

not applicable not applicable 1[9813.4990 not applicable other services not specified elsewhere 15.00% 15.00% 14.00% 16%

9813.5000 9813.5000 9813.5000 9813.5000 Issuance,, processing and operation of credit and debit cards 15.00% 15.00% 14.00% 16%

9813.6000 9813.6000 9813.6000 9813.6000 Commission and brokerage of foreign exchange dealings 15.00% 15.00% 14.00% 16%

9813.7000 9813.7000 9813.7000 9813.7000 Automated Teller Machine operations, maintenance and management 15.00% 15.00% 14.00% 16%

9813.8000 9813.8000 9813.8000 9813.8000 Service provided as banker to an issue 15.00% 15.00% 14.00% 16%

9813.8100 9813.8100 9813.8100 9813.8100 Other 15.00% 14.00% 16%

9813.9000 9813.9000 9813.9000 9813.9000 Service provided by a foreign exchange dealer or exchange company or money changer 15.00% 15.00% 14.00% 16%

98.14 98.14 98.14 98.14Services provided by architects, town planners, contractors, property developers or promoters,

interior decorators. 15.00% 16%

9814.1000 9814.1000 9814.1000 9814.1000 Architects or town planners 16.00% 15.00% 14.00% 16%

9814.2000 9814.2000 9814.2000 9814.2000

Contractors of building (including water supply, gas supply and sanitary works), roads and bridges,

electrical and mechanical works (including air conditioning), horticultural works, multi-discipline works

(including turn-key projects) and similar other works. 15.00% 15% & @Rs 50/SqYr for Commerical where covered area does not exceed 10000sqft or 20000 for residential 14.00% 16%

9814.3000 9814.3000 9814.3000 9814.3000 Property developers or promoters Rs. 100/sqy for land and Rs. 50/sqf for building15.00% @Rs. 100/-Sqyrd 14.00% 16%

9814.4000 9814.4000 9814.4000 9814.4000 Landscape designers 16%

9814.9000 9814.9000 9814.9000 9814.9000 Other 16.00% 15.00% 14.00% 16%

98.15 98.15 98.15 98.15 Services provided by professionals and consultants etc.

9815.1000 9815.1000 9815.1000 9815.1000 Medical practitioners and consultants 15.00%

9815.2000 9815.2000 9815.2000 9815.2000 Legal practitioners and consultants 15.00% 15.00% 14.00%

9815.3000 9815.3000 9815.3000 9815.3000 Accountants and auditors 15.00% 15.00% 14.00%

9815.4000 9815.4000 9815.4000 9815.4000 Management consultants 16.00% 15.00% 15.00% 14.00% 16%

9815.5000 9815.5000 9815.5000 9815.5000 Technical, scientific, engineering consultants 16.00% 15.00% 15.00% 14.00% 16%

9815.6000 9815.6000 9815.6000 9815.6000 Software or IT based system development consultants 16.00% 15.00% 15.00% 14.00% 16%

not applicable 2[9815.7000 not applicable not applicable Cosmetic and Plastic Surgery Services.] 15.00%

9815.9000 9815.9000 9815.9000 9815.9000 Other consultants 16.00% 15.00% 15.00% 14.00% 16%

9816.0000 9816.0000 9816.0000 9816.0000 Services provided by pathological laboratories. 16%

98.17 98.17 98.17 98.17Services provided by medical diagnostic laboratories including X-Rays, CT Scan, M.R. Imaging

etc. 16%

9817.1000 9817.1000 9817.1000 9817.1000 Scientific laboratories 16.00% 16%

9817.2000 9817.2000 9817.2000 9817.2000 Mechanical laboratories 16.00% 16%

9817.3000 9817.3000 9817.3000 9817.3000 Chemical laboratories 16.00% 16%

9817.4000 9817.4000 9817.4000 9817.4000 Electrical or electronic laboratories 16.00% 16%

9817.9000 9817.9000 9817.9000 9817.9000 Other such laboratories 16.00% 14.00% 16%

98.18 98.18 98.18 98.18 Services provided by specialized agencies.

9818.1000 9818.1000 9818.1000 9818.1000 Security agency 16.00% 15.00% 10.00% 14.00% 16%

9818.2000 9818.2000 9818.2000 9818.2000 Credit rating agency 16.00% 14.00% 16%

9818.3000 9818.3000 9818.3000 9818.3000 Market research agency 16.00% 15.00% 10.00% 14.00% 16%

9818.9000 9818.9000 9818.9000 9818.9000 Other such agencies 10.00%

98.19 98.19 98.19 98.19 Services provided by specified persons or businesses

9819.1000 9819.1000 9819.1000 9819.1000 Stock brokers 15.00% 15.00% 14.00% 16%

9819.1100 9819.1100 9819.1100 9819.1100 Under writers 16.00% 14.00% 16%

9819.1200 9819.1200 9819.1200 9819.1200 Indenters 16.00% 14.00% 16%

9819.1300 9819.1300 9819.1300 9819.1300 Commission agents 16.00% 14.00% 16%

9819.1400 9819.1400 9819.1400 9819.1400 Packers Higher of 16% or Rs. 400/BL 14.00% 16%

9819.2000 9819.2000 9819.2000 9819.2000 Money exchanger 15.00% 14.00%

9819.3000 9819.3000 9819.3000 9819.3000 Rent a car 16.00% 15.00% 15.00% 14.00% 16%

9819.4000 9819.4000 9819.4000 9819.4000 Prize bond dealers

9819.5000 9819.5000 9819.5000 9819.5000 Surveyors 15.00% 14.00%

9819.6000 9819.6000 9819.6000 9819.6000 Designers 16.00% 16%

9819.7000 9819.7000 9819.7000 9819.7000 Outdoor photographer 15.00% 14.00%

9819.8000 9819.8000 9819.8000 9819.8000 Art painter

not applicable 1[9819.8700 not applicable not applicable Video Tape and Production Services.] 15.00%

9819.9000 9819.9000 9819.9000 9819.9000 Cable TV operators 15.00% 14.00% 16%

9819.9100 9819.9100 9819.9100 9819.9100 Auctioneers 16.00% 14.00% 16%

9819.9200 9819.9200 9819.9200 9819.9200 Public relations services

9819.9300 9819.9300 9819.9300 9819.9300 Management consultants 16.00% 15.00% 15.00% 14.00% 16%

9819.9400 9819.9400 9819.9400 9819.9400 Technical testing and analysis service 16.00% 15.00% 14.00% 16%

9819.9500 9819.9500 9819.9500 9819.9500 Service provided by a registrar to an issue 16.00% 15.00% 14.00%

not applicable 1[9819.9600 not applicable not applicable Copy Right Services. 15.00%

not applicable 9819.9800 not applicable not applicable Sound Record Service.] 15.00%

9818.9090 9819.9090 9819.9090 9819.9090 Others 15.00% 14.00%

98.20 98.20 98.20 98.20 Services provided by specialized workshops or undertakings - - 16%

9820.1000 9820.1000 9820.1000 9820.1000 Auto-workshops 16.00% 15.00% 14.00% 16%

9820.2000 9820.2000 9820.2000 9820.2000Workshops for industrial machinery construction and earth-moving machinery or other special purpose

machinery etc. 16.00% 15.00% 15.00% 14.00% 16%

9820.3000 9820.3000 9820.3000 9820.3000 Workshops for electric or electronic equipments or appliances etc including computer hardware 16.00% 15.00% 14.00% 16%

9820.4000 9820.4000 9820.4000 9820.4000 Car washing or similar service stations 16.00% 15.00% 14.00% 16%

not applicable 1[9820.5000 not applicable not applicable

Services provided by motor vehicle workshops, mechanic shops, air conditioning fitting service and cleaning

centres.] 10.00% 16%

9820.9000 9820.9000 9820.9000 9820.9000 Other workshops 16.00% 16%

98.21 98.21 98.21 98.21 Services provided in specified fields.

9821.1000 9821.1000 9821.1000 9821.1000 Healthcare center, gyms or physical fitness center etc. 16.00% 15.00% 16.00% 14.00% 16%

9821.2000 9821.2000 9821.2000 9821.2000 Indoor sports and games center 16.00% 16%

9821.3000 9821.3000 9821.3000 9821.3000 Baby care center

9821.4000 9821.4000 9821.4000 9821.4000 Body massage center 16.00% 15.00% 16.00% 14.00% 16%

9821.5000 9821.5000 9821.5000 9821.5000 Pedicure center 16.00% 15.00% 16.00% 14.00% 16%

98.22 98.22 98.22 98.22 Services provided for specified purposes. 16%

9822.1000 9822.1000 9822.1000 9822.1000 Fumigation services 16.00% 15.00% 14.00% 16%

9822.2000 9822.2000 9822.2000 9822.2000 Maintenance or cleaning services 16.00% 15.00% 14.00% 16%

9822.3000 9822.3000 9822.3000 9822.3000 Janitorial services 16.00% 15.00% 14.00% 16%

9822.4000 9822.4000 9822.4000 9822.4000 Dredging or desilting services 16.00% 14.00% 16%

9822.9000 9822.9000 9822.9000 9822.9000 Other similar services 16.00% 14.00% 16%

9823.0000 9823.0000 9823.0000 9823.0000 Franchise services 15.00% 10.00% 14.00% 16%

9824.0000 9824.0000 9824.0000 9824.0000 Construction services 16.00% 15.00% 15.00% 14.00% 16%

9825.0000 9825.0000 Yes applicable 9825.0000 Consultancy services 14.00%

9826.0000 9826.0000 Yes applicable 9826.0000 Management services including fund and asset management services 16.00% 15.00% 15.00% 14.00% 16%

9827.0000 9827.0000 not applicable 9827.0000 Market research agencies 10.00% 14.00% 16%

9827.10001[Event management services including the services by event photographers, event

videographers and the persons related to such event management 16.00% 15.00% 15.00% 14.00%

9827.1000 Exhibition services 16.00% 15.00% 15.00% 14.00%

9828.0000 9828.0000 Yes applicable 9828.0000 Program producers 16.00% 15.00% 14.00% 16%

9829.0000 9829.0000 Yes applicable 9829.0000 Brokerage (other than stock) and indenting services 14.00% 16%

9830.0000 9830.0000 Yes applicable 9830.0000 Race Clubs 16.00% Rs.2100 entry/Adm -others 15%Rs.200 entry/Adm -others 14%16%

9831.0000 9831.0000 Yes applicable 9831.0000 General insurance agents 14.00%

9832.0000 9832.0000 Yes applicable 9832.0000 Exhibition or convention services 14.00% 16%

9833.0000 9833.0000 Yes applicable 9833.0000 Data processing and provision of information, services of engineers, handling and storage of goods 14.00%

9834.0000 9834.0000 Yes applicable 9834.0000 Fashion designers 14.00% 16%

9835.0000 9835.0000 not applicable 9835.0000 Cable operators 14.00%

9836.0000 9836.0000 Yes applicable 9836.0000 Internet café 14.00%

9837.0000 9837.0000 Yes applicable 9837.0000 Pandal and shamiana service 16.00% 15.00% 14.00% 16%

9838.0000 9838.0000 Yes applicable 9838.0000 Airport services 15.00% 15.00% 14.00% 16%

9839.0000 9839.0000 Yes applicable 9839.0000 Intellectual property services 14.00% 16%

9840.0000 9840.0000 not applicable 9840.0000 Forward contract services 14.00%

9841.0000 9841.0000 Yes applicable 9841.0000 Packaging services 14.00% 16%

9842.0000 9842.0000 not applicable 9842.0000 Services provided in matters of hire

9843.0000 9843.0000 not applicable 9843.0000 Purchase or sale of moveable or immovable goods or property

9844.0000 9844.0000 not applicable 9844.0000 Property dealers and realtors 15.00% 16%

9845.0000 9845.0000 not applicable 9845.0000 Automobile dealers 15.00% 16%

9846.0000 9846.0000 not applicable 9846.0000 Dealers of second hand goods other than automobiles

9847.0000 9847.0000 Yes applicable 9847.0000 Cosmetic and plastic surgery 15.00% 16%

9848.0000 9848.0000 not applicable 9848.0000 Beauty parlor and beauty clinics 16%

9849.0000 9849.0000 Yes applicable 9849.0000 HR consultants

9850.0000 9850.0000 Yes applicable 9850.0000 Corporate law consultants 15.00% 15.00% 19.50%

9851.0000 9851.0000 Yes applicable 9851.0000 Tax consultants 15.00%

9852.0000 9852.0000 Yes applicable 9852.0000 Human resources & personnel development services 16%

9853.0000 9853.0000 Yes applicable 9853.0000 Coaching centers

9854.0000 9854.0000 Yes applicable 9854.0000 Vocational centers

9855.0000 9855.0000 Yes applicable 9855.0000 Actuarial services

9856.0000 9856.0000 Yes applicable 9856.0000 Training services

9857.0000 9857.0000 not applicable 9857.0000 Tracking services 15.00% 10.00%

9858.0000 9858.0000 not applicable 9858.0000 Security alarm services 15.00% 10.00% 19.50%

9859.0000 9859.0000 Yes applicable 9859.0000 Human resource development 16%

9860.0000 9860.0000 not applicable 9860.0000 Building maintenance and service provider 16%

9861.0000 9861.0000 Yes applicable 9861.0000 Quality control services (ISO certification authority) 16%

9862.0000 9862.0000 not applicable 9862.0000 Services provided by motels, guest houses and farm houses. 15.00% 15.00% 16%

9863.0000 9863.0000 Yes applicable 9863.0000 Debt collection agencies

9864.0000 9864.0000 Yes applicable 9864.0000 Amusement parks

9865.0000 9865.0000 Yes applicable 9865.0000 Call centres 16.00% 19.50%

9866.0000 9866.0000 Yes applicable 9866.0000 Film and drama studios including mobile stage shows or cinemas

9867.0000 9867.0000 Yes applicable 9867.0000 Entertainment services

9868.0000 9868.0000 not applicable 9868.0000 Services provided in respect of manufacturing or processing on toll basis. 10.00% 16%

not applicable [9869.0000 not applicable not applicable Container terminal services. 15.00% 16%

not applicable 9870.0000 Yes applicable not applicable Manpower recruitment and labour supply services. 15.00% 15.00%

not applicable 9871.0000 not applicable not applicable Port operating services. 16.00% 15.00% 16%

not applicable 9872.0000 Yes applicable not applicable Public bonded warehouses 15.00% 15.00% 16%

not applicable 9873.0000 not applicable not applicableServices provided in respect of mining of minerals, oil and gas including related surveys and allied

activities. 16.00% 15.00% 16%

not applicable 9874.0000 not applicable not applicable Event Management Services.] 15.00%

not applicable 2[9875.0000 not applicable not applicable Electric power transmission or distribution services.]

not applicable not applicable Yes applicable not applicable2[Services provided or rendered by persons engaged in intercity transportation or

carriage of goods by road or through pipeline or conduit 16.00% 15.00%

not applicable not applicable Yes applicable not applicable Ready mix concrete service

not applicable not applicable Yes applicable not applicable Erection, commissioning and installation services 16.00%

not applicable not applicable Yes applicable not applicableTechnical inspection and certification services, including quality control certification

services and ISO certifications 16.00%

not applicable not applicable Yes applicable not applicable Valuation services, including competency and eligibility testing services] 16.00%

Authority Acts & Rules

As the main focus is the Provincial Sales Tax on services Acts therefore, these are not

dealt with in this presentation in details.

THE CHARGE AND

CURRENT ISSUES

PSTSA

3. Taxable service.– (1) Subject to such exclusion as mentioned in Second Schedule, a taxable service is a service listed in Second Schedule, which is provided

by a person from his office or place of business in the Punjab in the course of an economic activity, including the commencement or termination of the activity.

Explanation: This subsection deals with services provided by a person regardless whether such services are provided to a resident person or a non-resident

person.

(2) If a service listed in Second Schedule is provided to a resident person by a non-resident person in the course of an economic activity, including the commencement or termination of the activity, it shall be treated as a taxable service.

Explanation: This subsection deals with services provided by a non-resident person to a resident person whether or not the end consumers, if any, of

such services are identifiable for purposes of this Act or the rules.

(3) For purposes of subsection (2), where a person has a registered office or place of business in the Punjab and another outside the Punjab, the registered

office or place of business in the Punjab and that outside the Punjab shall be treated as separate legal persons.

(4) The Authority may, with prior approval of the Government, by notification in the official Gazette, prescribe rules for determining the conditions under which a particular service or class of service shall be considered to have been provided by a person from his registered office or place of business in the Punjab.

(5) For purposes of this Act and the rules, providing of service shall, where the context so requires, include rendering, supply, initiation, origination,

execution, reception, consumption or termination of a service whether in whole or in part.

(6) The services mentioned in the First Schedule are not exhaustive and all the services mentioned in the Second Schedule, rules and circulars shall be

taxable services.

Charge-PSTSA

SSTSA

3. Taxable Service: (1) A taxable service is a service listed in the Second Schedule to this Act, which is provided:

(a) by a registered person from his registered office or place of business in Sindh;

(b) in the course of an economic activity, including in the commencement or termination of the activity.

Explanation: This sub-section deals with services provided by registered persons, regardless of whether those services are provided to resident persons

or non-resident persons.

(2) A service that is not provided by a registered person shall be treated as a taxable service if the service is listed in the Second Schedule to this Act and 1[is provided to a resident person by a non-resident person in the course of an economic activity]:

2[ ]

Explanation: This sub-section deals with services provided by non-resident persons to resident persons 3[whether or not the said resident person is an end consumer of such services].

(3) For the purposes of sub-section (2), where a person has a registered office or place of business in Sindh and another outside Sindh, the registered office

or place of business in Sindh and that outside Sindh shall be treated as separate legal persons.

(4) The Board may, 4[ ] by notification in the official Gazette, prescribe rules for determining the conditions under which a particular service or class

of services will be considered to have been provided by a person from his registered office or place of business in Sindh.

Charge-SSTSA

KPTSA

19. Taxable Service.– (1) A taxable service is a service listed in the Second Schedule to this Act, which is provided:

(a) by a registered person from his registered office or place of business in the Khyber Pakhtunkhwa;

(b) in the course of an economic activity, including its commencement or termination of the activity.

Explanation: This sub-section deals with services provided by registered persons, regardless of whether those services are provided to resident persons

or non-resident persons.

(2) A service that is not provided by a registered person shall be treated as a taxable service, if the service is listed in the Second Schedule to this Act

and–

(a) is provided to a resident person;

(b) by a non-resident person in the course of an economic activity, including its commencement or termination of the activity.

Explanation: This sub-section deals with services provided by non-resident persons to resident persons.

(3) For the purposes of sub-section (2), where a person has a registered office or place of business in the Khyber Pakhtunkhwa and another office outside Khyber Pakhtunkhwa, the registered office or place of business in Khyber Pakhtunkhwa and that outside Khyber Pakhtunkhwa shall be treated as separate

legal persons.

(4) The Authority by notification, prescribe regulation for determining the conditions under which a particular service or class of services will be

considered to have been provided by a person from his registered office or place of business in the Khyber Pakhtunkhwa.

Charge KPTSA

BSTSA

3. Taxable Service.– (1) Subject to such exclusion as mentioned in Second Schedule, a taxable service is a service listed in Second Schedule, which is provided by a person from his office or place of business in Balochistan in the course of an economic activity, including the commencement or termination of

the activity.

Explanation

(1) This sub-section deals with services provided by a person regardless whether such services are provided to a resident person or a non-resident person.

(2) if a service listed in Second Schedule is provided to a resident person by a non-resident person in the course of an economic activity, including the commencement or termination of the activity, it shall be treated as a taxable service.

Explanation

This sub-section deals with services provided by a non-resident person to a resident person whether or not the end consumers, if any, of such services are

identifiable for purposes of this Act or the rules.

(3) For purposes of sub-section (2), where a person has a registered office or plan of business in Balochistan and another outside Balochistan, the registered

office or place of business in Balochistan and that outside Balochistan shall be treated as separate legal persons,

(4) The Authority may, with prior approval of the Government, by notification in the official Gazette, prescribe rules for determining the conditions under which a particular service or class of service shall be considered to have been provided by a person from his registered office or place of business in Balochistan.

(5) For purposes of this Act and the rules, providing of service shall, where the context requires, include rendering, supply, initiation, origination,

execution, reception, consumption or termination of service whether in whole or in part.

Charge- BSTSA

The Charge


(38)“service” or “services” means anything which is not goods or providing of which is not a supply of goods and shall include but not limited to the services listed in First Schedule;

Explanation: A service shall remain and continue to be treated as service regardless whether or not rendering thereof involves any use, supply 1[, disposition] or consumption of any goods either as an essential or as an incidental aspect of such rendering;

(79)“service” or “services” means anything which is not goods 1[ ] and shall include but not limited to the services listed in the First Schedule of

this Act.

2[Explanation-I]: A service shall remain and continue to be treated as service regardless whether or not the providing thereof involves any use, supply 3[, disposition] or consumption of any goods either as an essential or as an incidental aspect of such providing of

service;

4[Explanation-II: Unless otherwise specified by the Board, the service or services involved in the supply of goods shall remain and continue to be treated as

service or services;]

(48) “service” or “services” means anything which is not goods or providing of which is not supply of goods and shall include, but not limited to, the services listed in First Schedule;

Explanation: A service shall remain and continue to be treated as service regardless whether or not rendering thereof involves any use, supply or consumption of any goods either as an essential or as an incidental aspect of such rendering;

(39) “Service” or “services” means anything, which is not goods or providing of which is not a supply of goods and shall include but not limited to the services listed in first Schedule;

Explanation

A service shall remain

and continue to be treated as

service regardless whether or

not rendering thereof

involves any use, supply or

consumption of any goods

either as an essential or as an

incidental aspect of such

rendering;

Continues

That the concept of ‘service’ or ‘services’ contained in the above definition clauses

envisage that it constitutes an activity which is essentially intangible, perishable and

instantly consumable the moment it is performed for another person, and thereby not

capable of supply across a “chain of supply” beyond the first stage of “provider” or “renderer” to the recipient

Goods/Immovable Property/Manufacture


(24) “goods” include

every kind of movable

property other than

actionable claims, money,

stocks, shares and securities

but does not include a

service defined under the

Act;

(48) “goods” includes


property other than



and does not include a

service or services described

under this Act;

(30) “goods” include


property other than



but does not include a

service defined under this

Act;

(25) “Goods” include every

kind of movable property

other than actionable claims,

money, stocks, shares and

securities but does not

include a service defined

under the Act;

Continues

The expression ‘goods’ is defined in Article 260 of the Constitution to include “all

materials, commodities and articles”. The term ‘service’ in not defined in the

Constitution. Section 2(12) of the Sales Tax Act, 1990 defines the expression “goods”

to include “every kind of movable property other than actionable claims, money,

stocks, shares and securities”. No Provincial Assembly can enact a law that is contrary

to the Constitution

“Manufacturing/Toll Manufacturing” has always been a federal subject under section

2(16) read with section 2(17) of the Sales Tax Act, 1990. By promulgation of Sales Tax

on Services Acts or by establishing a provincial revenue authorities nomenclature of

an item cannot be changed. That Federal Board of Revenue through its clarification

C. No. 3(2)ST-L&P/2011 (Pt-II) dated January 8, 2016

Movable & Immovable Property

Terms ‘movable and immovable property’ provided under the West Pakistan General

Clauses Act, 1956 will apply, which are as under:

“(39) Movable property: 'Movable property' shall mean property of every description

except immovable property.

(31) Immovable property: 'Immovable property' shall include land, benefits to arise out of

land, and things attached to the earth, or permanently fastened to anything attached to

the earth.”

[Bold for emphasis]

Other Issues

Right to use assets (Rentals & Royalties)

Items specifically falling within domain of Federation

Court’s Judgements on Issues

Over 330 Writs filed before Honorable Lahore High Court which declared PRA unlawful and notices issued by it unlawful [Syed Muhammad Ijaz, Advocate for the petitioner in W.P. No.40373/2015]

Decision on Writ under article 199 is assailed before Division Bench of Lahore High Court. Till next hearing decision of Single bench suspended.

SRB and Charge Challenged on various scores Division bench of Honorable Sind High Court at Karachi [CP D-3184 of 2014];

Earlier judgements

Honorable Lahore High Court also held the same view in Kawther Grain (Pvt.) Ltd. v. DCIT, Gujranwala [(1999) 80 TAX 262 (H.C.Lah.) = 1999 PTD 4028]. [ANNEX-G]

“As already observed the interpretation of word “Goods” as adopted by the assessing officer does not find support either fromIncome Tax Ordinance or for that matter from any other law. The consistent view of the Superior Courts in Pakistan that in casesof fiscal statutes only the letter of law should be seen has sufficiently been highlighted in re: Collector of Customs v. S. M. Ahmed & Company (Supra) and re: Muhammad Younis vs. C.B.R. (Supra). It is also an accepted proposition that the words used in a statute if not defined therein should be assigned their ordinary dictionary meaning. Reference to the aforesaid two dictionariessupports the contention of the learned council. The sale of immovable property including land and building along with machinery installed therein could by no imagination be treated as supply of goods or services rendered.”.

And Ellcot Spinning Mills Ltd. v. Commissioner of Income/Wealth Tax [2008 PTD 1401 (H.C.Lah)] [ANNEX-H]

“Goods” means movable items, though, it includes a long list of things. However, none of the definitions gives the impression that an immovable property like machinery fastened to earth can be called as goods.”

Punjab Finance Act-(PFACT) 2016

Summary

Scope of tax and allied matters

Special procedure and tax withholding provisions

Deduction and adjustment of tax on inputs to the business

Certain transaction not admissible

Tax credit not allowed

Return

Offence and penalties

Powers of adjudication

Recovery of arrears of tax

Amendment in Second Schedule

Section 10 & 14

Section 10- Scope of tax and allied matters

Stationary amendments made by omitting subsections 4 & 5. The matter has

already been covered under section 16. There was an overlapping with section 16

hence omission.

Section 14 - Special procedure and tax withholding provisions

New sub section (3) in section 14 inserted ; whereby, the prescribed person acting

as withholding agent, who fails to withhold or pay the tax withheld, is liable to pay

the amount of tax to the Government treasury.

Similar recovery provision is already available under Rule 14 of the Punjab Sales Tax on Services (Withholding) Rules, 2015. It is now inserted within the Act to give legal

coverage to the withholding obligations.

Section 16, 16A & 16B

Section 16 - Deduction and adjustment of tax on inputs to the business - 16A. Certain transactions not

admissible, 16B. Tax credit not allowed

Section 16 substituted and 16A & B added- Major changes are

Section 16’s amendment aims at defining mechanism for input output tax adjustment and restrictions

imposed via introduction of section 16A & 16B

Section 16A & B are inserted based on similar pretexts as are available under section 8A & 8B, 73 of the

Sales Tax Act, 1990.

transaction exceeding value of fifty thousand rupees

Online transfer of payment

service recipient shall not be entitled to claim input tax credit, adjustment or deduction, or refund,

repayment or zero rating of tax under this Act if payment for the amount is made otherwise than in

the manner prescribed

16B defines where input tax credit is not allowed

Section 35, 48, 60 & 70

Section 35 - Return - By insertion of subsection (1A) Withholding tax return filed by a person shall be

treated as a return for that purpose. However, this will not be treated as a substitute for return required to

be filed for providing of taxable services

Section 48 - Offences and penalties- Rates of penalties doubled In case any person fails to furnish a

return within the due date. Penalty in cases where a return is not filed within 15 days of the due date

increased to 10,000 [earlier 5000], a penalty of Rs. 200 for each day of default shall be levied [earlier

100].

Section 60 - Powers of adjudication- Lower limit for adjudication by the DC removed hence now Deputy

Commissioner is authorized to even adjudicated cases below PKR 1M

Section 70 - Recovery of arrears of tax – By changes brought in this section now recovery can only be

made by officers appointed under section 39 of the Punjab Sales Tax on Services Act, 2012 [earlier it

was “the officer of the authority”]

Major Changes in Second Schedule

16% rates defined for ;

“services provided by hotels, motels, guest houses, marriage halls etc

Advertisement on Television and Radio etc

Advertisement (All kinds) on poles, signs and sign boards CCTV, web, internet etc

PKR 50m threshold is no more available as exempt for construction services, further Government contract are no more exempt. Similarly exemption on construction in industrial zones is also done away with.

No more exclusion of actual purchase cost available to property developers.

Business auxiliary services are included as taxable

Collection and processing of domestic waste and street cleaning services added in taxable services regime

Cosmetic, warehousing or depots, packaging services taxable @ 16%

Sindh Finance Act-(SFACT) 2016

Summary

Definitions

Input tax credit not allowed

Joint and several liability of registered persons

Sales of taxable activity or transfer of ownership

Assessment of tax

Retention and production of records

Return

Appointment of Authorities

Recovery of tax not levied or short levied

Services of orders and decisions

First schedule

Second schedule

Definitions

Section 29A Cosmetics & Plastic Surgery

Section 31A Debt collection services & other debt recovery services

Section 60A Notification in the officer Gazette

Section 69A Public relations services

Section 15A, 18, 19, 23, 27, 30 & 34

Section 15A shall be inserted through which the provision similar to section 8 of sales tax Act 1990 added to disallow input tax in prescribed circumstances.

Section 18 Joint & several liability of registered persons in case of unpaid or less tax is now extended to all persons earlier it was restricted to registered persons only.

Section 19 Sales of taxable activity or transfer of ownership, new proviso added by which amount of tax is now first charge on sale of taxable activity

Section 23 Assessment of tax, time limit for assessment enhanced to 8 years earlier (5 years), by amendment in sub-section 8 SRB is also empowered to transfer cases and extension of time limit.

Section 27 Retention & production of records & documents, time limit extended to 10 years (earlier 5 years)

Section 30 Return, sub-section (5), change in the rate of tax during tax period shall be omitted. Redundant as through online filing Boards are moving towards filing of separate annexures even- As in case Federal Laws

Section 34 Appointment of Authorities, sub-section (1) new clauses (f), (g) and (h) shall be added

(f) Senior Auditor & an Auditor of the SRB

(g) Sindh sales tax officer of the SRB

(h) An officer of the Sindh Revenue Board with any other designation

Section 47, 60, 74 & 75 & 2nd Schedule

Section 47 Recovery of tax not levied or short-levied, time limit extended to 8 years (earlier 5 years)

A new sub-section 1B inserted through which incase of default in deduction of tax by withholding

agent or in case deduction but failure in deposit, Officer of SRB shall determine the amount in default

& order its recovery in the prescribed manner

New sub-section (6) added to allow Board to regulate system of determining liability under section

47 and allow extension in time limits.

Section 60 Appointment of appellate Tribunal, Time limit for appointment of members in appointment

extended from 5 years to 10 years from the date of promulgation of SSTA.

Section 74 Removal of difficulties, time limit extended to 8 years from 5 years

Table B of Second Schedule Rates changed to 13% [earlier 14%]

KP Finance Act- (KPFACT) 2016

Summary

Section 56- Appointment of Officers

Appointment of Officers- Officers are empowered to exercise powers their subordinates even

KPRA empowered to impose restrictions and conditions on exercise of such powers

Section 56A- Distribution of Powers added- Empowering KPRA to distribute powers

through a notification, either by name or designation and subject to such conditions or

limitations as stated therein.

Section 114 – Powers to Make regulations- KPRA subject to Council’s approval wherever

required can make regulations not inconsistent with the rules.

CONCLUDED- THANK

YOU VERY MUCH

PROVINCIAL SALES TAX ON SERVICES ACTS

Law

Transcript of PROVINCIAL SALES TAX ON SERVICES ACTS