The Central Board of Revenue (CBR) has conveyed to the National Finance Commission (NFC) that collection of general sales tax (GST) on air/train travel, inland carriage of goods by air and telecommunication services cannot be transferred from federation to provinces.
In this connection, sales tax department in consultation with central excise wing has submitted the viewpoint to the NFC Secretariat taking into account Sales Tax Act, 1990 and central excise law.
NFC Secretariat had sought opinion of the tax authorities on the possibility of transferring these three federal services to the provinces.
Official sources told Business Recorder here on Friday that CBR opined that travel by air/train, inland carriage of goods by air and telecommunication services were being provided by federal institutions like Pakistan Telecommunication Company Limited (PTCL), Pakistan International Airlines (PIA) and Pakistan Railways.
These services are included in the federal legislative list and are being managed by federal government.
Sources added that central excise duty (CED) is being collected as sales tax on travel by air/train, inland carriage of goods and telecommunication and these services were already transferred to the GST mode. However, being federal subject, these services could be transferred to the provinces.
At present, sales tax is applicable on 14 services. In case of 11 services, Provincial Ordinances have been promulgated authorising the federal government to collect GST on these services under Sales Tax Act, 1990.
These are services provided or rendered by hotels, marriage halls, lawns, clubs/caterers, hotels; advertisement on TV and radio; services provided or rendered by persons authorised to transact business on behalf of others ie Customs agents, Ship handlers, Stevedores and Courier Services and services provided or rendered for personal care by beauty parlours, beauty clinics, slimming clinic and services provided or rendered by laundries and dry cleaners.
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