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COMPARATIVE STUDY AND SCOPE OF SALES TAX ON SERVICES Pakistan Tax Bar Association & Karachi Tax Bar Association Adnan Mufti FCA.

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Presentation on theme: "COMPARATIVE STUDY AND SCOPE OF SALES TAX ON SERVICES Pakistan Tax Bar Association & Karachi Tax Bar Association Adnan Mufti FCA."— Presentation transcript:

1 COMPARATIVE STUDY AND SCOPE OF SALES TAX ON SERVICES Pakistan Tax Bar Association & Karachi Tax Bar Association Adnan Mufti FCA

2 2

3 3 VAT / GST Regimes across the Globe

4 4 No.RegionNo. of Country 1ASEAN7 2Asia19 3Europe53 4Oceania7 5Africa44 6South America11 7Caribbean, Central & North America19 Currently, there are 160 countries in the world that have implement VAT / GST. Number of country based on region are as follows:-

5 5 Countries working towards VAT / GST * Afghanistan Principe Bahamas Syria Bhutan Bahrain Kiribati Kuwait Marshall Islands Qatar Micronesia Saudi Arabia Palau Oman Sao Tome United Arab Emirates China India * Source: Malaysian Tax Authority

6 6 SCOPE OF SALES TAX ON SERVICES – INTERNATIONAL PRACTICES.

7 Pakistan Services liable to sales tax, if they are specifically listed and taxed under the respective Provincial statutes. Except for Punjab & Khyber Pakhtunkhwa, services are solely taxable on the basis of origin, i.e., in the Province / Territory in which the service originates. India Service tax is applicable on the supply of services provided in a taxable territory. W.e.f. July 2012, service tax is levied on all services, other than those specifically exempt under the negative list. With the introduction of negative list, all definitions of services which were earlier provided in the law have become redundant. Australia GST is applicable on taxable supplies of goods and services, which are supplied in Australia and made for consideration in the course of a business enterprise by an entity that is registered or that is required to be registered for GST. 7

8 Canada Canadas federal government imposes a 5% sales tax known as the Goods and Services Tax (GST). When a supply is made in a participating province, the tax rate includes an additional provincial component of 7%, 8% or 10%, depending on the province. The combined 12%, 13% or 15% tax is known as the Harmonized Sales Tax (HST). France VAT applies to the supply of goods or services performed in France by a taxable person and intra- Community acquisition of goods from another EU member state by a taxable person. Japan Consumption tax applies to the supply of goods or services made in Japan by a taxable person and importation of goods into Japan. Malaysia Sales tax is a single-stage tax, applied to sales of locally manufactured taxable goods as well as to taxable goods imported for domestic consumption. 8

9 European Union Under the Single Market rules, goods may move freely between member states without hindrance, including customs controls. As a result, the concepts of import and export no longer apply to cross-border trade between member states. Nontaxable persons are any persons or legal entities that are not registered for VAT. VAT is generally charged on supplies of goods made to nontaxable persons using the origin principle, which means VAT applies in the member state where the supplier of the goods is established. Consequently, VAT rate is the rate that applies to the goods in the suppliers member state, not the rate that would apply in the customers member state. Business to-business (B2B) supplies of services are taxed at place where the customer is located. Business-to-consumer (B2C) supplies of services, the place of taxation continues to be where the supplier is established. 9

10 New Zealand GST applies to the supply of goods or services made in New Zealand by a registered person and importation of goods into New Zealand, regardless of the status of the importer. Phillipines VAT applies to the taxable sale, barter, exchange, use or lease of goods or property by a taxable person, taxable sale or exchange of services by a taxable person and taxable importation of goods from outside the Philippines. Turkey VAT applies to the following transactions: The supply of goods or services made in Turkey by a taxable person in the course of performing commercial, industrial, agricultural or independent professional activities Services received in Turkey or benefited from in Turkey by a taxable person or any other person responsible for payment of the tax Goods and services imported into Turkey 10

11 Singapore Taxable supplies of goods and services in Singapore, made in the course of a business by a taxable person and imports of goods into Singapore attracts GST. United Kingdom The supply of goods or services made in the United Kingdom by a taxable person, intra-Community acquisition of goods from another EU member state by a taxable person, reverse-charge services received by a taxable person in the United Kingdom and importation of goods from outside the EU attracts VAT. USA Sales tax is transaction-based tax, imposed on intra-state retail transactions (sales made between a buyer and seller located within the same state), and are calculated as a % of the receipts derived from the transaction. 11

12 Singapore Taxable supplies of goods and services in Singapore, made in the course of a business by a taxable person and imports of goods into Singapore attracts GST. United Kingdom The supply of goods or services made in the United Kingdom by a taxable person, intra-Community acquisition of goods from another EU member state by a taxable person, reverse-charge services received by a taxable person in the United Kingdom and importation of goods from outside the EU attracts VAT. USA Sales tax is transaction-based tax, imposed on intra-state retail transactions (sales made between a buyer and seller located within the same state), and are calculated as a % of the receipts derived from the transaction. 12

13 13 CONSTITUTIONAL POSITION & COMPARATIVE ANALYSIS OF SERVICES TAXED IN PAKISTAN

14 18 th Amendment of the Constitution of Pakistan Amendment XVIII (the Eighteenth Amendment) of the Constitution of Pakistan, was passed by the National Assembly of Pakistan on April 8, Under Entry No.49 of the fourth Schedule of the Federal Legislative List of the Constitution of Pakistan, as amended under Eighteenth (18th) Amendment Act 2010, the authority of the provinces regarding Sales Tax on Services has been accepted and re-asserted by adding the words "except Sales Tax on Services". 14 CONSTITUTIONAL POSITION

15 Entry No.49 Taxes on the Sales and purchases of goods imported, exported, produced, manufactured or consumed except Sales Tax on Services. Article 142 (C) of the Constitution has further fortified the authority of the provinces on imposition and collection of the Sales Tax on Purchase and Sale of Services, which is reproduced as under: Article 142 (C) "A Provincial Assembly shall and Mujlis-e-Shoora (Parliament) shall not have power to make laws with respect to any matter not enumerated in the Federal Legislative List". 15 CONSTITUTIONAL POSITION

16 With the 18 th Amendment and the 7 th NFC award, sales taxation on services jurisdiction has been reasserted and, for the first time, levy and collection rights have been regulated and administered by the provinces. Accordingly, the Provincial Assemblies of Sindh, Punjab & Khyber Paktunkhaw enacted Provincial Sales Tax Laws in Year 2011, 2012 & 2013 respectively for levy, collection and administration of sales tax on services provided, rendered or supplied in respective Provinces. A comprehensive list of services and service providers has been prescribed in 1 st & 2 nd Schedule of Provincial Laws for levy of sales tax. Constitutional Position needs be defined and elaborated whether the Provinces can levy sales tax on services, service providers or both ! 16 CONSTITUTIONAL POSITION

17 ServicesSindhPunjabBaluchistan & ISB Capital Territory Khyber Pakhtunkhawa Services provided by hotels, clubs, caterers, restaurants, marriage halls and lawns ¶ (restaurants, marriage halls & lawns excluded) (restaurants excluded) Advertisement on television & radio ¶ Advertisement on cable television ^ Advertisement poles, billboards and others ^ Shipping agents ^ Stevedores ¶ Ship management services Freight forwarding agents 17 COMPARATIVE ANALYSIS

18 ServicesSindhPunjabBaluchistan & ISB Capital Territory Khyber Pakhtunkhwa Customs agents ¶ Ship chandlers ¶ Advertising agents Sponsorship services Business support services Services provided by property developer & promoters ^ Courier services ¶ Contractual execution of work Services provided or rendered for personal care by beauty parlours, beauty clinics, slimming clinics or centres and others 18 COMPARATIVE ANALYSIS

19 ServicesSindhPunjabBaluchistan & ISB Capital Territory Khyber Pakhtunkhwa Services provided by banks, financial institutions insurances companies etc. ^ Architects & town planners Contractors of building Property developers and promoters ^ Legal practitioners Accountants & auditors Management consultants Software or IT based system development consultants Tax consultants 19 COMPARATIVE ANALYSIS

20 ServicesSindhPunjabBaluchistan & ISB Capital Territory Khyber Pakhtunkhwa Security agency Market research agency Stock brokers and commodity brokers ^ Money exchangers Surveyors Outdoor photographers and video graphers Management consultants Port operators, airport operators, airport ground services & terminal operators ^ Auto workshops including authorized service stations 20 COMPARATIVE ANALYSIS

21 ServicesSindhPunjabBaluchistan & ISB Capital Territory Khyber Pakhtunkhwa Workshop for industrial machinery, construction and earth moving machinery or other special purpose machinery Health care centre, gyms or physical fitness centres Body massage centre Pedicure centre Franchise services ^ Construction services Management services including fund & asset management services Airport services 21 COMPARATIVE ANALYSIS

22 ServicesSindhPunjabBaluchistan & ISB Capital Territory Khyber Pakhtunkhwa Tracking services Security alarm services Services provided by motels and guest houses Event management services Public Bounded warehouses Labour & manpower services Toll manufacturing services Race clubs Technical, scientific & engineering consultants 22 COMPARATIVE ANALYSIS

23 ServicesSindhPunjabBaluchistan & ISB Capital Territory Khyber Pakhtunkhwa Other consultants Manpower & Recruiting agents Services provided by tour operators Services provided in relation to Exploration & production Share transfer services Property dealers Fashion designers Rent a car Car/automobile dealers Telecommunication services ^ Laundries & dry cleaners 23 COMPARATIVE ANALYSIS

24 ^ Classified as service under the Baluchistan Sales Tax on Services Ordinance & Islamabad Capital Territory Sales Tax on Services Ordinance 2001 ¶ Administered under Federal Excise Act 2005 COMPARATIVE ANALYSIS 24

25 25 PECUILAR SERVICES TAXED IN SINDH & PUNJAB

26 26

27 BUSINESS SUPPORT SERVICES Tariff Heading PECUILAR SERVICES SindhPunjab Section 2(19) of the Sindh Sales Tax on Services Act, 2011Rule 27 of Punjab Sales Tax on Services (Definitions) Rules 2012 Services provided in relation to business or commerce and includes evaluation of prospective buyers, telemarketing, call centre facilities, accounting and processing of transactions, processing of purchase orders and fulfillment services, information and tracking of delivery schedules, managing distribution and logistics, customer relationship management services, operational assistance for marketing, formulation of customer service and pricing policies, infrastructural support services and other transaction processing. Services provided in relation to business or commerce and includes evaluation of prospective customers, telemarketing, processing of purchase orders and fulfillment services, information and tracking of delivery schedules, managing distribution and logistics, customer relationship management services, accounting and processing of transactions, operational assistance for marketing, formulation of customer service and pricing policies, infrastructural support services and other transaction processing.

28 BUSINESS SUPPORT SERVICES Tariff Heading Very broad definition and implications Virtually includes every facet of economic activity which is supporting the operational existence of any business Guidelines from provincial tax authorities for clarity and better understanding awaited Reimbursable expenses appear to be non deductible. Hence, service may be taxable on gross value charged to the customers No exemption threshold has been defined Specific rules for ascertainment and calculation of liability have not been framed 28 PECUILAR SERVICES

29 BUSINESS SUPPORT SERVICES Tariff Heading Overlapping services existing in the definition of BSS. Such services have distinct Tariff Headings under 1 st Schedule but are otherwise non taxable: Call Centres Accounting Services Data Processing and Provision of Information Rule 4A of Punjab Sales Tax on Services Rules 2012 ! 29 PECUILAR SERVICES

30 FRANCHISE SERVICES Tariff Heading Ever since brought into the service tax, franchise services have been bone of contention among the Provinces and Federation. Even though franchise services are taxable / excisable under the three prevailing statutes of the country (with exception of KPK Finance Act 2013) and having similar definitions of franchise, there are still no clear guidelines for payment of sales tax on franchise on point of taxation Intense confusion exist among the taxpayers for payment of sales tax on franchise. This has already instigated litigation on many issues between the taxpayer and the revenue. 30 PECUILAR SERVICES

31 FRANCHISE SERVICES Tariff Heading Franchise means as an authority given by a franchise under which the franchisee is contractually or otherwise granted any right to produce, manufacture, sell or trade in or do any other business activity in respect of goods or to provide services or to undertake any process identified with franchiser against a fee or consideration including royalty or technical fee, whether or not a trade mark, services mark, trade name, logo, brand name or any such representation or symbol, as the case may be, is involved. Following elements are essential to establish a franchise arrangement under the law: Franchisee is granted any right to produce or manufacture; Franchisee is granted any right to sell or trade; Franchisee is granted any right to do other business activity is respect of goods identified with franchiser; Franchisee is granted any right to provide services possessed by a franchiser; and Franchisee is granted right to undertake any process identified with franchiser. 31 PECUILAR SERVICES

32 FRANCHISE SERVICES Tariff Heading PECUILAR SERVICES Sindh ST Law 2011Punjab ST Law 2012 Tax Rate 10% Tax Rate 16% SRB requires payment of Sindh Sales Tax on gross franchise / royalty payment of entire country PRA requires payment of Punjab Sales Tax on franchise / royalty attributable to Punjabs Turnover If royalty is paid under an agreement between local and foreign franchisor, sales tax to be paid on gross sum remitted or sum laid down in the agreement, whichever is higher SAME If no payment is made to franchisor, the assessable value shall be as per the agreement NOT APPLICABLE If no franchise agreement in place or remittance not required, franchise will be deemed to be 10% of the franchisees turnover NOT APPLICABLE

33 FRANCHISE SERVICES Tariff Heading PECUILAR SERVICES Sindh ST Law 2011Punjab ST Law 2012 In case of beverages, if no agreement exists, sales tax is to be 10% of value of concentrate. In the case of food, if no agreement exists, the assessable value for sales tax shall be 10% of the turnover. If agreement is executed, sales tax is payable as per the agreed sum. In case of beverages, if no agreement exists, sales tax is to be 16% of value of concentrate. In case of food sector, if no agreement exists, sales tax is to be paid on net sales of the franchisee (Ambiguous) SAME Payment of tax on 15 th of the relevant month SAME If no payment date is prescribed in the agreement or no agreement exists, tax is payable on 15 th day on quarterly basis. NOT APPLICABLE Input Tax not admissible to Service Provider Input Tax admissible to service provider NOT APPLICABLE Remitting bank is treated as WHT agent for recovery of sales tax on franchise

34 FRANCHISE SERVICES Tariff Heading Business Issues Bifurcation of sales tax on franchise among Provinces FBRs Claim on Franchise Tax accruing in Sindh & Punjab Status of recipient of franchise under the Provincial statutes as deemed registered person Adjustment of input tax on franchise service paid on behalf on foreign franchisor – Invoice !!! Accruals vs. Actual payment – The Feasible Option ! 34 PECUILAR SERVICES

35 FRANCHISE SERVICES Tariff Heading Business Issues Regulatory and exchange restrictions Agreement between the Franchisor and Franchisee for delay in payments Exchange rate fluctuations between payment date and payable date Franchise on the basis of Head Office or Provincial Turnover Double Taxation Issues 35 PECUILAR SERVICES

36 SOFTWARE OR IT BASED SYSTEM DEVELOPMENT CONSULTANTS Tariff Heading Service taxable from 01 July 2013 onward. No specific definition of Software or IT Based consultants prescribed so far in Punjab & Sindh. Plain and literal reading of service suggests that services provided in relation to system development are subject to sales tax. However, uncertainty prevails as to whether other services which are associated with the field of information technology are also taxable. 36 PECUILAR SERVICES

37 SOFTWARE OR IT BASED SYSTEM DEVELOPMENT CONSULTANTS Tariff Heading Examples of such other services could be as follows: implementation services in relation to licensed softwares; annual support renewals and software maintenance services; problem solving and software upgradation services; services in relation to network administration and information technology infrastructure; web development and web hosting services; advisory relating to design, implementation and operational assistance for hardware and software; implementation services in relation enterprise resource planning application system and management systems ; and outsourcing of software or IT based personnel against services charges. 37 PECUILAR SERVICES

38 SOFTWARE OR IT BASED SYSTEM DEVELOPMENT CONSULTANTS Tariff Heading The Punjab Revenue Authority, through its Circular No. 7 of 2013, has opined that every service provided by Software or IT based consultant is exposed to sales tax under the Punjab ST Laws Rendering of Exempt Services by IT Consultant ! Software has already been declared as goods under the Sales Tax Act Accordingly, sales 17% or 18%, as the case may be, is levied on supply of software. FBRs Ruling ! Practical issues emanate while making demarcation between supply of goods and rendering of service ! Export of IT Services exempted from Sindh Sales Tax 38 PECUILAR SERVICES

39 ADVERTISING AGENTS Tariff Heading PECUILAR SERVICES Sindh ST Law 2011Punjab ST Law 2012 Advertising agents means a person engaged in providing any service connected with making, preparation, display, demonstration or exhibition of advertisement in any manner and includes an advertising agency SAME. Advertising consultant also taxable Tax Rate 16% SAME Advertisement on building, poles, hoarding sites, billboards, digital boards, banners, vehicles, cinema, shops etc. are covered SAME Agency commission for advertisement on which sales tax on gross value of advertisement has already been charged and collected would not attract sales tax on commission. (Source: SRB Clarification) SAME

40 ADVERTISING AGENTS Tariff Heading PECUILAR SERVICES Sindh ST Law 2011Punjab ST Law 2012 NOT APPLICABLE Supply of goods and materials used in the preparation of advertisement are inclusive in the definition of services and accordingly subject to tax No discounts are allowed, value constitute gross value SAME

41 CONSTRUCTION SERVICES Tariff Heading Construction services were brought into the sales tax net by SRB since the month of November Initially, these services were subject to sales However, largely the construction industry did not obtain registration. Resultantly, to facilitate registration under the Sindh ST Laws 2011, the Sindh Government offered conditional sales tax rate of 4% on construction services w.e.f 01 July PRA also brought construction services into the sales tax w.e.f 01 July However, detailed procedure on construction services are yet to be prescribed by PRA. 41 PECUILAR SERVICES

42 CONSTRUCTION SERVICES Tariff Heading PECUILAR SERVICES Sindh ST Law 2011Punjab ST Law 2012 Rate of Sales Tax: 4% or 16%; Service provider may opt for reduced rate taxation upto 31 December 2013, subject to fulfillment of certain conditions as provided under SRB Circular Credit of Input Tax: No input tax available to service provider if he opts for reduced rate of tax Value of supply: Gross amount charged for the services. Rate of Sales Tax: 16% Input tax credit available (Rule 5 subjective) Gross amount charged for the services.

43 CONSTRUCTION SERVICES Tariff Heading PECUILAR SERVICES Sindh ST Law 2011Punjab ST Law 2012 Exemption: Projects of commercial and industrial nature where value of construction does not exceed Rs. 50 million provided value component of service does not exceed in such a project not exceed Rs. 10 million. Construction and development of EPZ, SEZ, diplomatic and consular buildings and such other buildings and structures of the organizations as are exempted from application of Income Tax Ordinance Exemption: Projects of commercial and industrial nature where value of construction does not exceed rupees 50 million. Construction of industrial zones, consular buildings and other organizations exempt from income tax.

44 CONSTRUCTION SERVICES Tariff Heading PECUILAR SERVICES Sindh ST Law 2011Punjab ST Law 2012 Exemption: Construction of roads and repair of roads, railways, etc. as are not meant for commercial purpose or for commercial letting out on rent. NOT APPLICABLE Construction of independent projects of private residential houses and apartments where the covered area does not exceed 10,000 sq feet and 20,000 sq feet in respect in respect of houses & apartment complexes respectively. NOT KNOWN NOT APPLICABLE Exemption: NOT APPLICABLE Government civil works including Cantonment Boards. SAME Cases where sales tax is otherwise paid as property developers or promoters Construction work under international tenders against foreign grants-in-aid.

45 CONSTRUCTION SERVICES Tariff Heading Business Issues (Sindh ST Laws): Ascertainment of element of services in a construction contract Bifurcation of tax rate where part of service under a contract was rendered prior to July 2013 Criteria for exemption threshold [applicable to individual contacts or on total contracts] Overlapping of construction services with Contractors of building falling under the Tariff Heading ; and Sub contracting of parts of construction contracts taxable under a different Tariff Heading 45 PECUILAR SERVICES

46 TOLL MANUFACTURING Tariff Heading Toll Manufacturing previously covered under Section 2(33) of Sales Tax Act 1990 as other disposition. Sales Tax General Order (STGO) 3/2004 also elaborated the taxability of principal and vendor in toll manufacturing arrangement Sindh High Court did not agree with FBRs standpoint and held toll manufacturing as a service The Federal Government changed the definition of supply under Section 2(33) and removed other disposition as part of supply. The corresponding STGO, however, was not withdraw and still holds the field. Sindh Revenue Board and Punjab Revenue Authority have also classified Toll Manufacturing as Service and accordingly brought to sales 16% w.e.f 01 July SRO 1125 places sales tax on toll manufacturing activity within the 5 export oriented sectors. The textile industry is required to offer sales on toll manufacturing to FBR. Such tax is adjustable against their output tax liability. 46 PECUILAR SERVICES

47 CONTRACTORS OF BUILDING, TURNKEY PROJECTS, ETC. Tariff Heading Taxable in Sindh Contractor of building (including water supply, gas supply and sanitary works), electrical and mechanical works (including air conditioning) multidisciplinary works (including turn-key projects) and similar other works The definition aims to bring all civil, electrical and mechanical works which are ancillary to the completion of the construction projects (undertaken by way of a contract) or contracts other than construction contracts involving mechanical, engineering and similar works into the sales tax net. Similar Other Works Not Defined Whether contracts of engineering, mechanical and similar works which are part & parcel of construction contracts are taxable under the Tariff Heading or ? 47 PECUILAR SERVICES

48 CONTRACTUAL EXECUTION OF WORK & FURNISHING SUPPLIES Tariff Heading Unique Tariff Heading ! Taxable in Sindh since 2011 and in Punjab since July 2013 Classification of services under this Tariff Heading is too cumbersome SRB has opined that any service, which is not listed in either 1 st or 2 nd Schedule of Sindh ST Laws, is taxable under the Tariff Heading , if rendered through a contract. In the Indian Service Tax Laws, a Similar Entry titled Work Contract exists whereby list of services taxed thereunder have specifically been defined. 48 PECUILAR SERVICES

49 CONTRACTUAL EXECUTION OF WORK & FURNISHING SUPPLIES Tariff Heading PECUILAR SERVICES Sindh ST Law 2011Punjab ST Law 2012 Tax Rate 16% SAME No Rules notified for computation of liability SAME Applicable to both embedded contracts as well contracts for services NOT KNOWN In case of embedded contracts and exclusive contracts for services, sales tax would be applicable on service component APPEARS TO BE SAME Services specifically listed in the First Schedule are not taxable under (Source: SRB Clarification) No clarification todate; however, similar rule of law may apply

50 CONTRACTUAL EXECUTION OF WORK & FURNISHING SUPPLIES Tariff Heading PECUILAR SERVICES Sindh ST Law 2011Punjab ST Law 2012 Exclusions: Contracts for works OR supplies where total value does not exceed Rs 50 million in a financial year subject to condition that the value component of services in such contract also does not exceed Rs 10 million Text books publication & distribution The annual turnover would be the aggregate value of total contracts entered by contractor (Source: SRB Clarification). Exclusion: Annual total value of contractual works or supplies not exceeding Rs 50 million; Printing & supplies of books The aggregate value of total contracts will be examined for exemption criteria

51 CONTRACTUAL EXECUTION OF WORK & FURNISHING SUPPLIES Tariff Heading Business Issues: If total contract approach is adopted, it is practically not possible to charge sales tax on other contracts signed and executed earlier Withholding Tax issues would also arise for the payer (contractee) as he may not be aware of the value of other contracts handled contractor Contracts executable over number of years 51 PECUILAR SERVICES

52 52 PECUILAR SERVICES Sindh ST Law 2011Punjab ST Law 2012 Labour & Manpower Supply ServicesTariff HeadingManpower recruitment agentsTariff Heading Tax Rate 16% In this arrangement, the service provider retains the employee or manpower on its own payroll and gets reimbursement for the actual expenses and fee mutually agreed between the parties In this arrangement, the service provider facilitates his client by using its skills & expertise to find suitable human resource or manpower The actual cost of manpower or employee which is reimbursed from the client is not included in the value of supply and only the consideration or commission is exposed to sales tax The services are taxable on gross value Manpower recruiting agents are not taxable under the Sindh ST Law 2011 Labour & manpower services may not taxable under the Punjab ST Law 2012 LABOUR & MANPOWER / RECRUITMENT SERVICES

53 53 SERVICES TAXED IN KPK

54 Rules, SROs, General Orders, Circulars have not been issued so far which causes a lot of confusion among the taxpayers and tax advisors Specific definitions of services brought under the tax net have not been defined In the absence of SROs / Rules, it appears that sales tax has also been imposed on the following services which are otherwise exempt (either totality or partially) under Federal & Provincial Tax Laws: Services provided by Restaurants Marriage Lawn Clubs Advertisement in newspapers, periodicals Beauty Parlous Telecommunications on international Leased Lines or bandwith software exporters registered under Software exporting Board Banking and Non-banking Financial Institutions for services with respect to Hajj and Umrah passengers, cheque book issuance, Musharika and Modaraba financing and Utility Bills collection Internet Services Marine, Life & Crop Insurance Services 54

55 55 THANK YOU


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