MONDAY JUNE 13: Wide range of services: Sindh to impose 16 percent sales tax

ISLAMABAD: Sindh Sales Tax on Services Bill 2011 has proposed to impose, from July 1, 2011, sales tax on a wide range of services, including telecommunication services, advertisements on TV/radio, courier services and services provided by property dealers, developers and services provided by bank, insurance companies, forex dealers and services provided by non-banking financial institutions from July 1, 2011.
Sources said on Sunday that according to the Schedule-II of taxable services under the Sindh Sales Tax on Services Bill 2011, 16 percent sales tax has been proposed to be collected on telecom services, services provided by hotels, restaurants, marriage halls, lawns, clubs and caterers and advertisements on TV, radio, billboard and advertisements in newspapers, cable and website. Provincial sales tax at the rate of 16 percent has been proposed to be applicable on services provided by shipping agents, freight forwarders, ship chandlers and services provided by stevedores.
According to sources, Sindh Sales Tax on Services Bill 2011 has also proposed to levy sales tax on services provided by property dealers, developers, promoters and development of purchase or lease land and conversion into residential or commercial plots, construction of residential or commercial units. Sales tax has been proposed to be levied on services provided or rendered by persons engaged in contractual execution of work or furnishing of supplies. Sales tax has been proposed to be imposed on services of banking companies, insurance companies, co-operative financing securities, forex exchange dealers and non-banking financial institutions. Sales tax at the rate of 16 percent has also been proposed on courier services.
Sindh Sales Tax on Services Bill 2011 has also proposed to levy sales tax on services provided or rendered by stockbrokers, money changers, franchise services and construction services.
Sources said that the Sindh Sales Tax on Services Bill 2011 has also proposed establishment of Sindh Revenue Board for collection of sales tax on services. As per section 83 of the Sindh Sales Tax on Services Bill 2011, it has been proposed to repeal the Sindh Sales Tax Ordinance 2000, sources added. When contacted, Advisor to CM Sindh, Dr Qaiser Bangali told Business Recorder that the Sindh Sales Tax on Services Bill 2011 has been passed by the provincial assembly. The sales tax on services would be applicable from July 1, 2011.
About a query on the applicability of 19.5 percent sales tax on telecom services as specified in the Sindh Sales Tax on Services Bill 2011, he said that the telecom services have been proposed to be subjected to 16 percent sales tax, instead of 19.5 percent.