Further amendments made in Sindh Sales Tax on Services Rules, 2011

In order to incorporate the procedure of payment of sales tax on service by newly taxed services, Sindh Revenue Board (SRB) has made further important amendments in Sindh Sales Tax on Services Rules 2011, it was learnt on Thursday.

The notification No SRB-3-4/ 9 /2013, has been issued a few days back which stated that: In exercise of the powers conferred by section 72 of Sindh Sales Tax on Services Act, 2011, read with sections 5, 6, 9, 13, 26 and 75 thereof, Sindh Revenue Board, with the approval of the Government of Sindh, is pleased to direct that following further amendments have been made in Sindh Sales Tax on Services Rules, 2011.

For rule 33, the following shall be substituted namely: "33. Procedure for collection of sales tax on advertising agents (1) Every person providing or rendering the services of an advertising agent shall pay sales tax in the manner prescribed in this rule. The procedure in this rule shall also apply to the advertising agents providing or rendering services of advertisements on buildings, hoarding sites, billboards, sign boards, digital boards, poles, banners, vehicles, etc.

(2) Every advertising agent shall register under section 24 of the Act read with the provisions of Chapter-II of these rules. (3) The value for the purposes of levy of tax on the services by advertising agents shall be: (a) where the services are provided or rendered on commission basis, the amount of commission charged by the advertising agent. Where any extra commission is received by the advertising agent from the media (including the print media) it shall also be included in the value of services liable to tax to be paid by the advertising agent and (b) where the services are provided or rendered on any basis other than on commission basis, the gross amount of value for such services.

(6) The tax involved on the services provided or rendered by an advertising agent during a tax period shall be deposited by such advertising agent in the manner prescribed in Chapter-III of these rules by 15th day of the month following the tax period to which it relates. The advertising agent shall file his tax return in the manner prescribed in Chapter-III of these rules within 3 days from due date prescribed for payment of tax.

(7) Every such advertising agent shall, inter-alia, ensure that he also complies with the provisions of the SRB Circular No 6 of 2012 dated 9 April, 2012, in relation to the amounts of tax covered by Sindh Sales Tax Special Procedure (Withholding) Rules, 2011.

(xiv) for rule 41, the following shall be substituted, namely: "41. Services provided or rendered by stockbrokers and commodity brokers (1) The provisions of this rules shall apply to the persons providing or rendering the services of Stockbrokers and Commodity brokers.

(2) Every such Stockbroker and Commodity broker shall be registered under section 24 of the Act, read with the provisions of Chapter-II of these rules.

(3) The value of taxable services for the purposes of levy of sales tax shall be the gross commission, fee and other amounts charged by a stockbroker or a commodity broker from his clients in respect of purchase or sale of shares in a Stock Exchange or in respect of purchase or sale of commodity contracts including futures, options and similar financial derivatives in a commodity exchange as defined in the Securities and Exchange Ordinance, 1969.

(4) Where a Stockbroker or a Commodity broker has himself purchased stocks or commodity contracts from his own resources with a view to selling the same to any person other than the concerned joint-stock company or joint-commodity company, he shall pay the tax on the basis of the commission worked out on the open market rates at the time of sale of such stocks or commodity contracts.

(5) The tax involved on the services provided or rendered by a Stockbroker or a Commodity broker during a tax period shall be deposited by such a Stockbroker or a Commodity broker in the manner prescribed in Chapter-III of these rules by the 15th day of month following the tax period to which it relates. The Stockbroker or a Commodity broker shall file his tax return in the manner prescribed in Chapter-III of these rules within 3 days from due date prescribed for payment of tax.

(6) The Stock Brokers shall maintain records as stipulated in section 26 of Act and sub-rule (2) of rule 29 of these rules in such manner as will enable distinct ascertainment of payment of tax due.

(xvi) After rule 42A, the following shall be added, namely: "42B. Special procedure for collection and payment of sales tax on construction services (1) The provisions of this rule shall apply to the persons providing or rendering construction services (tariff heading 9824.0000) who elect or opt to pay the tax at the reduced rate specified in relation thereto in a notification issued under sub-section (2) of section 8 of the Act.

(2) A person, desiring to be governed by this rule, shall submit his written election or option in the Form appended to this rule, so as to reach the Commissioner-II of the SRB on or before the 26July, 2013:

Provided that a person not in construction business on the first day of July, 2013 , shall submit his election or option in the prescribed form within 21 days from the date of commencement of his business of providing or rendering such construction services:

Provided further that a person, not submitting his option/election in the prescribed form within the date as prescribed in this sub-rule, shall be deemed to have not elected and not opted for the purposes of the reduced rate of tax as specified in the notification issued under sub-section (2) of section 8 of the Act and, accordingly, such a person shall pay the statutory rate of tax of 16 percent on his services and all the provisions of the Act and the rules made there under, except this rule, shall apply in his case.

(3) The value of taxable services for the purposes of levy of sales tax shall be the gross amount charged for the services provided or rendered.

(4) The provisions of section 7 of the Act, read with subsection (2) of section 17 thereof shall apply in relation to the tax payable by person electing or opting to be governed by the provisions of this rule.

(5) Every such person shall issue a serially-numbered invoice or bill of charges or an electronically generated invoice or bill of charges for each transaction in terms of sub-rule (4) of this rule. The invoice or the bill of charges shall contain the particulars as specified in sub-rule (1) of rule 29 of these rules. A copy of the invoice or the bill of charges shall be given to the person to whom such services are provided or rendered and one copy shall be retained by the service provider in the bound book of invoices or bill of charges.

(6) Every such person (service provider) shall maintain account of all services provided or rendered by him and shall also maintain the record prescribed in section 26 of the Act and sub-rule (2A) of rule 29 of these rules. He shall also maintain record of the approved building plan, drawing (electrical and structural drawings), completion certificate, and the contract or the agreement made between the service provider and the service recipient.

(7) The tax involved on the services provided or rendered by persons engaged in the economic activity of construction services during a tax period shall be paid by the service provider in the manner prescribed in Chapter-III of these rules by the 15th day of the month following the tax period to which it relates. The tax return shall be filed by the service provider in the manner prescribed in Chapter-III of these rules within 3 days from the due date prescribed for payment of tax.

The notification mentioned the procedures of tax regarding the service provided or rendered by beauty parlours, beauty clinics, slimming clinics, body massage centers, pedicure centres, security agency, labour and manpower supply services, sales tax on legal practitioners and consultants, accountants and auditors and tax consultants, freight forwarding agents, marriage halls and lawns.

Copyright Business Recorder, 2013