Sales tax on services: PRA collects Rs 22.87 billion during July-October

While collecting Rs 22.87 billion from Punjab sales tax on services during July-October period of the financial year 2016-17, Punjab Revenue Authority (PRA) has increased the number of taxable services from 12 in 2012-13 to 62 in 2016-17 and number of registered persons jumped from 10,239 persons during 2014-15 to 28,000 till November 2016, nearly tripling the size of the tax base.
According to the updated data compiled by the PRA on Friday, the PRA's revenue performance is reflective of its achievements in terms of expanding its tax base. Tightening of the withholding regime of Punjab sales tax and allied efforts aimed at taxpayer education through regular training sessions and seminars have yielded a growth in collection of withheld Punjab sales tax in excess of 130 percent whereas, franchise services (60.31 percent growth), manpower recruitment agents (76.52 percent growth), transportation of goods through pipelines or conduit (36.38 percent growth), technical, scientific and engineering consultancies (27.03 percent growth) and restaurants (22.97 percent growth with the support of restaurant invoice monitoring system-RIMS) have been the other notable performers.
These indicators reflect that service sector is now inclined to contribute in terms of better revenue yields. However, there are some areas where is still a resistance by the taxpayers like the cable operators, property developers and estate agents. Hopefully with the expanding horizons, the hitherto non-cooperative sectors will start contributing to the exchequer which will resultantly contribute towards the aggressive development plans of the Chief Minister, Punjab.
Punjab Revenue Authority is continuing upon its growth trajectory, achieving remarkable collection figures of Rs 22.87 billion (Punjab sales tax on services) in just the first four months of the current financial year. The collection figures are striking as they remind the "annual share" received by the Province of Punjab from the federal government on account of sales tax on services in the financial year 2011-12, when the sales tax on services was last collected by the federal government, according to the PRA.
The PRA has in just over four years become a leading revenue collection agency of the Punjab government. The figures speak for themselves. For the current financial year Rs 22.87 against the Rs 17.19 billion recorded for the first four months of the financial year 2015-16 reflects remarkable growth rate of 33 percent over the previous year for the same period. They also exceeded the growth rate of 31 percent observed in the first four months of the last financial year 2015-16 over the first four months of its previous financial year.
Significantly, both telecom-based and non-telecom services have demonstrated robust growth. A review of the available data reveals that the non-telecom services have grown by 36 percent whereas, telecom services have also demonstrated a growth trend of 24 percent, bouncing back somewhat from a lean period when revenue collection from telecom services nose-dived in the aftermath of blockage of several million SIMs due to implementation of the recommendations of National Action Plan (NAP), Punjab government's decision to grant across-the-board exemption to internet/data services and a continuing trend of telecom operators for seeking input adjustments on account of federal sales tax paid on imports (machinery/equipment) relating to 3G/4G regime, PRA added.