The Sindh Sales Tax on Services Act
2011 an overview
By Muhammad Junaid Ghaffar
(Advocate)
Merchant Law Associates
(Formerly Navin Merchant & Associates)
(Customs, Excise & Sales Tax Consultants,
Patent, Trade Mark, Design & Copy Right
Attorneys)
1
Muhammad Junaid Ghaffar
Advocate High Court
Sales Tax on Services viz a viz
Constitution
Prior to the 18th Amendment the Province could make laws
on subjects listed in the Concurrent Legislative List in 4th
Schedule {Article 70 (4)}
Sales tax on import and sale of goods was part of Federal
Legislative List.
Since Services were not listed in Federal Legislative List,
the Provinces in the year 2000 made legislation on the
subject.
2
This levy by Provinces was even challenged in the Lahore and
Sindh High Courts but was upheld by both as being properly
and validly legislated.
Muhammad Junaid Ghaffar
Advocate High Court
Continued
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3
However, after 18th amendment to the
Constitution the Provinces now have the exclusive
right to make laws with respect to any matter not
covered by Federal Legislative List.
The Concurrent Legislative is now omitted.
Entry 49 of the Federal Legislative List has also
been amended by exclusion of the words “Sales
Tax on Services” enabling the Provinces to
exclusively legislate on the subject.
Muhammad Junaid Ghaffar
Advocate High Court
Why Province of Sindh has taken a
stand on collection of Tax by itself
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4
All other Provinces except Sindh were agreeable
to allow FBR to collect Sales Tax on Services and
distribute the revenue;
Sindh pleaded its case on the premise, that
collection from Sindh was much higher than what
it was being Reimbursed as the same was census
or population based;
As per Special Adviser to CM, under the NFC
award 17 Billion were given last year, whereas mow
it is expected that 25 Billion would be collected
Muhammad Junaid Ghaffar
Advocate High Court
Chapter 1 (Preliminary) Sections 1 to 7
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5
Definition of various nature are contained n
Section 2. Important ones are;
Majority of the same are Para Materia to the
definitions contained in Section 2 of the Sales
Tax Act 1990
Further most of the definitions are itself
contained in the later part of the Act in different
sections
We will dilate upon new clauses and definitions
Muhammad Junaid Ghaffar
Advocate High Court
Chapter 1 Continued
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6
Clause 28 of section 2 “place of Business in Sindh”
means that a person;
owns, rents, shares or in any other manner
occupies a space in Sindh from where it carries on
an economic activity; or
carries on an economic activity through any other
person such as an agent, associate, franchisee,
branch, office, or otherwise in Sindh but not
including a liaison office.
Muhammad Junaid Ghaffar
Advocate High Court
Chapter 1 continued

Clause 33 “resident”
an individual shall be a resident for a financial
year, if the individual-

place of business; or
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7
has his permanent address, as listed in the
individual’s notational identity card, in Sindh;
Muhammad Junaid Ghaffar
Advocate High Court
Chapter 1 Continued
(ii)an association of persons shall be a resident for a
financial year if;
 its registered office is in Sindh; or
 it has a place of business in Sindh; or
 the control or management of the affairs of the
association of persons is situated wholly or almost
wholly in Sindh at any time during the relevant
financial years;
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Muhammad Junaid Ghaffar
Advocate High Court
Chapter 1 Continued
(iii) A company shall be a resident for a financial
year if;
 Its registered office is in Sindh; or
 It has a place of business in Sindh; or
 The control or management of the affairs of the
company is situated wholly or almost wholly in
Sindh at any time during the relevant financial
years;
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Muhammad Junaid Ghaffar
Advocate High Court
Chapter 1 Continued
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10
Clause 35 “Service” or “Services
includes, but is not limited to, the activities listed in
column (2) of the first schedule of this Act read
with Chapter 98 of the Pakistan Customs Tariff;
Clause 36 “Schedule”.. These have been appended to
the Act as First and Second Schedule where the
services are listed.
First Schedule covers all sorts of services as defined
in clause 35 read with Chapter 98 of the Pakistan
Customs Tariff
Muhammad Junaid Ghaffar
Advocate High Court
Chapter 1 Continued
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a)
b)
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Second Schedule covers those services which
have been for the time being brought under the
“taxable Services” as per section 3 of the Act
Section 3 “Taxable Service”
A taxable service is a service listed in the second
Schedule to this Act which is provided;
by a registered person from his registered office or
place of business in Sindh;
in the course of an economic activity, including in the
commencement or termination of the activity.
Muhammad Junaid Ghaffar
Advocate High Court
Chapter 1 Continued
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12
Explanation: this sub-section deals with services
provided by registered persons, regardless of
whether those services are provided to resident
persons or non-resident persons.
(2) A service that is not provided by a registered person
shall be treated as a taxable service if the service is
listed in the Second Schedule to this Act and:
 (a) is provided to a resident person
 (b) by a non-resident person in the course of an
economic activity, including in the commencement or
termination of the activity.
Muhammad Junaid Ghaffar
Advocate High Court
Chapter I Continued
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13
Explanation: This sub-section deals with services provided
by non-resident persons to resident persons ..
(3) For the purposes of sub-section (2), where a person has
a registered office or· place of business in Sindh and
another outside Sindh, the registered office or place of
business in Sindh and that outside Sindh shall be treated as
separate legal persons.
(4) The Board may, with the approval of the Government
and by notification in the official Gazette, prescribe rules
for determining the conditions under which a particular
service or class of services will be considered to have been
provided by a person from his registered office or place of
business in Sindh.
Muhammad Junaid Ghaffar
Advocate High Court
Chapter I continued
Section 4 “Economic Activity” means
(1)An economic activity means any activity carried on
continuously or regularly by a person that involves
or is intended to involve the provision of services
to another person and includes(a) an activity carried on in the form of a
business, including a profession, calling, trade, or
undertaking of any kind, whether or not the
activity is undertaken for profit;
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Muhammad Junaid Ghaffar
Advocate High Court
Chapter 1 Continued
(b) the supply of moveable property by way of lease,
license or similar arrangement; and
(c) a one-off adventure or concern in the nature of a
trade.
(2) Anything done or undertaken during the
commencement or termination of an economic activity
is part of the economic activity.
(3) An economic activity does not include(a) the activities of an employee providing services in
that capacity to an employer;
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Muhammad Junaid Ghaffar
Advocate High Court
Chapter 1 Continued
(b) a private recreational pursuit or hobby of an
individual;
(c) an activity of a person other than an individual, which
is essentially carried on as a private recreational
pursuit or hobby of a member, owner, or associate of
the person; or
(d) an activity carried on without a reasonable
expectation of profit by an individual or an association
of persons, all of the members of which are
individuals.
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Muhammad Junaid Ghaffar
Advocate High Court
Chapter 1 Continued
Section 5 “Value of Taxable Service”
(1) The value of a taxable service is:
(a)the consideration in Money including all Federal and
provincial duties and taxes, if any, which the person
providing a service receives from the recipient of the
service but excluding the amount of sales tax.
In case the consideration for a services is in kind or is
partly in kind and partly in money, the value of the
service shall mean the open market price of the
service as determined under section 6 excluding the
amount of sales tax under this Act; and
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Muhammad Junaid Ghaffar
Advocate High Court
Chapter 1 Continued
(ii)In case the person provides the service and the
recipient of the service are associated persons
and the service is supplied for no consideration or
for a consideration which is lower than the price
at which the person provides the service to other
persons who are not associated persons, the value
of the service shall mean the price at which the
service is provided to such other persons who are
not associated persons excluding the amount of
sales tax;
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Muhammad Junaid Ghaffar
Advocate High Court
Chapter 1 Continued
(iii)in case a person provides a service for no
consideration or for a consideration is lower than
the price at which such a service is provided by
other persons, the value of the service shall mean
the open market price for such a service;
(b)in case of trade discounts, the discounted price
excluding the amount of sales tax under this Act,
provided the tax invoice shows the discounted
price and the related tax and the discount allowed
is in conformity with customary business practice;
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Muhammad Junaid Ghaffar
Advocate High Court
Chapter 1 Continued
© in case there is reason to believe that the value of a
service has not been correctly declared in the invoice
or any special nature of transaction it is difficult to
ascertain the value of a service, the open market
price, as determined under section6;
(d)notwithstanding any of the above, where the Board
deems it necessary it may, by notification in the
official Gazette, fix the value of any service or class
of services and for that purpose fix different values
for different classes or description of the same or
similar types of services;
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Muhammad Junaid Ghaffar
Advocate High Court
Chapter 1 Continued
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21
provided that where the value at which
the service is provided is higher than the
value fixed by the Board, the value of the
service shall, unless otherwise directed by
the Board, be the value at which the
service is provided.
Muhammad Junaid Ghaffar
Advocate High Court
Chapter 1 Continued
Section 6 “Open Market Price” (1) The open market
price of a service is:
(a) the price the service would fetch in an open market
transaction freely entered into between persons who
are not associated persons; or
(b) if it is not possible to determine an amount under
paragraph (a), the price a similar service would fetch
in an open market transaction freely made between
persons who are not associated persons, adjusted to
take account of the differences between the similar
service and the actual service,
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Muhammad Junaid Ghaffar
Advocate High Court
Chapter 1 Continued
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23
determined on the basis of the market conditions
prevailing at the time and place at which the
service is provided.
(2) If the open market price of a service cannot
be determined under subsection (1), it may be
determined using any method approved by the
Board for calculating an objective approximation
of the price the service would fetch in an open
market transaction freely made between persons
who are not associates.
Muhammad Junaid Ghaffar
Advocate High Court
Chapter 1 Continued
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Section 7 “Service over a Period of Time”
(1)Where a service is provided over a period of time
and payment for the same is made on a periodic
basis, the service shall be treated as comprising
two or more separate and distinct services each
corresponding to the part of the service to which
each separate part of the consideration relates
(2) This section does not apply to services for which
payment is made on an installment basis.
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Muhammad Junaid Ghaffar
Advocate High Court
Chapter II Scope of Tax
(Sections 8 to 15)
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Section 8 “Scope of Tax”
(1)Subject to the provisions of this Act, there shall be
charged. levied and collected a tax known as sales tax on
the value of a taxable service at the rate specified in the
Schedule in which the taxable services is listed.
(2)The Government may, subject to such conditions and
restrictions as it may impose, by notification in the official
Gazette, declare that in respect of any taxable service
provided by a registered person or a class of registered
persons, the tax shall be charged, levied and collected at
such higher or lower rate or rates as may be specified in
the said notification for any given tax period.
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Muhammad Junaid Ghaffar
Advocate High Court
Chapter II continued
Section 9 “ Person Liable to Pay Tax”
(1)Where a service is taxable by virtue- of sub
section (1) of section 3, the liability to pay the
tax shall be on the registered person providing
the service.
(2)Where a service is taxable by virtue of subsection (2) of section 3, the liability to pay the
tax shall be on the person receiving the service.
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Muhammad Junaid Ghaffar
Advocate High Court
Chapter II continued
(3)Notwithstanding anything contained in sub-sections (1)
and (2), the Government may, by a notification in the
official Gazette, specify the services or class of
services in respect of which the liability to pay tax
shall be on the person providing the taxable service,
or the person receiving the taxable service or any
other person.
(4)Nothing contained in sub-sections (1) and (2) shall
prevent the collection of tax from a different person
if that person is made separately or jointly or
severally liable for this tax under section 18.
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Muhammad Junaid Ghaffar
Advocate High Court
Chapter II continued
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Section 10 “Exemptions”…..
(1)Notwithstanding the provisions of section 8, the
Board, may, with the approval of the Government and
subject to such conditions and restrictions as it may
impose, by notification in the official Gazette:
(a)exempt any taxable service from the whole or any part
of the tax chargeable under this Act;
(b)exempt any taxable service provided by a specific
person or a class of Persons from the whole or any
part of the tax chargeable under this Act;
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Muhammad Junaid Ghaffar
Advocate High Court
Chapter II continued
©exempt any recipient of services or class of such
recipient, including International organizations
and institutions, from the payment of the whole
or any part of the tax payable under this Act;
(d)exempt any person or class of persons from the
whole or any part of the tax chargeable under
this Act.
(2)The exemption under sub-section (1) may be
allowed from any previous date specified in the
notification issued under sub-section (1)
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Muhammad Junaid Ghaffar
Advocate High Court
Chapter II continued
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Section 13 “Special Procedure”.
Rules have been issued vide No Legal/231/2011
dated 30.6.2011
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Section 14 “Delegation of power”
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(1)Notwithstanding anything contained in this Act, the Government
may, by notification in the official Gazette, authorize the Federal
Board of Revenue or any other Federal, provincial or other
agency, department, organization or person to administer,
collect and enforce the levy of sales tax on such taxable
services as it may notify and in such mode and manner and for
such period as it may prescribe and subject to such restrictions
and conditions as it may impose.
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Muhammad Junaid Ghaffar
Advocate High Court
Chapter II continued
(2)Notwithstanding anything contained in this Act, where the
Government notifies any taxable services under sub-section
(1) above, for the period specified therein, except for the
provisions of Chapters I and II and sections 72, 7 4 and 78, the
remaining provisions of this Act shall not be applicable to such
taxable services.
(3)At the end of the period specified in sub-Section (1) above, the
tax on taxable services notified under sub-section (1) shall be
administered, collected and enforced by the Board in the same
mode and manner as all
 other taxable services and all provisions of this Act shall be
applicable to them.
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Muhammad Junaid Ghaffar
Advocate High Court
Chapter II continued
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Section 15 “Adjustments” Read with
Chapter V of Rules 21 to 23 of
Notification dated 30.6.2011
Although no Input Tax has been defined or used
in this section, but primarily this section has been
created to keep some space open for this. The
section has been made dependent on Rules and
the Board has been made competent to allow
adjustments, deductions including refunds.
Muhammad Junaid Ghaffar
Advocate High Court
Chapter II continued
The section has been defined as;
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The Board may, subject to such conditions and
restrictions as it may prescribe and with the
approval of the Government, allow registered
persons to claim adjustments or deductions,
including refunds arising as a result thereof, in
respect of the sale tax paid on or in respect of
any taxable services or class of taxable services
provided by them.
Muhammad Junaid Ghaffar
Advocate High Court
Chapter V of Rules (Adjustment
of Input Tax and Tax paid)
21 Application: The provision of this chapter shall apply to
the registered persons who provide or render taxable and
exempt supplies simultaneously or claim adjustment or
deduction in respect of tax paid under the provision of
section 15 of the Act.
22 Determination of Input Tax: (1) Input tax paid on the
inputs relating wholly to the taxable services shall be
admissible under the law and the input tax paid on inputs
relating wholly to exempt services shall not be admissible.
The amount of input tax incurred on both exempt and
taxable services shall be apportioned according to the
following formula namely:
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Muhammad Junaid Ghaffar
Advocate High Court
Chapter V of Rules Continued
(2) Monthly adjustment of input tax claim based on sub rule (1) of
rule 22 by a registered person shall on the basis of taxable and
exempt services and proportionately basis on services provider
in Sindh and elsewhere; will be subject to reconciliation and
audit (where required) during the year. The registered person
claiming input Tax of goods used, consumed or utilized in
providing of services at more than 20% of the output shall file
scanned attachments of the evidences with all the necessary
evidence based on which claim is made.
 (3) Any inadmissible Input tax adjustment claimed shall be
punishable under the respective provisions of law.
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Muhammad Junaid Ghaffar
Advocate High Court
Chapter V of Rules Continued
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23 Credit and Debit of tax claimed or paid:
Where a registered person has assigned a tax invoice in
respect of services provided or rendered by him and as a result
of any event specified in section 15 of the Act, the amount
shown in the tax invoice or return needs to be modified, the
service provider and provide both will issue debt and credit
notes with details to be mentioned in such debit or credit note
and adjust the amount accordingly provided that the
corresponding debit or credit note is issued within 90 days
extendable on request for 30 more days Provided further that in
the case of unregistered providee of the service, the adjustment
can only be made against the credit note issued by the provider
of the service.
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Muhammad Junaid Ghaffar
Advocate High Court
Chapter III (Sections 16 to 23)
Section 16 “Collection of Excess Tax”
corresponds almost exactly to section 3B of the
Sales Tax Act 1990 and says …
(1)Any person who has collected or collects any tax or

charge, whether under misapprehension of any provision
of this Act or otherwise, which was not payable as tax or
charge or which is in excess of the tax or charge actually
payable .and the incidence of which has been passed on
to the person to whom the service is provided, shall pay
the amount of tax or charge so collected to the
Government.
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Muhammad Junaid Ghaffar
Advocate High Court
Chapter III Continued
(2)Any amount payable to the Government under subsection (1) shall be deemed to be an arrear of tax or
charge payable under this Act and shall be
recoverable accordingly.
(3)The burden of proof. that the incidence of tax or
charge referred to in sub- section (1) has been or
has not been passed to the person to whom the
service is provided shall be on the person collecting
the tax or charge.
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Muhammad Junaid Ghaffar
Advocate High Court
Chapter III Continued
Section 17 “Time and Manner of Payment”
(1)The tax in respect of a taxable service provided
during a tax period shall be paid by a person at the
time of filing the return in respect of that period under
Chapter-IV.
 For the purposes of sub-section (1), a taxable
service shall be considered to have been provided in
the tax period during which:
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Muhammad Junaid Ghaffar
Advocate High Court
Chapter III Continued
(i) it was provided to the recipient;
(ii) an invoice for the value of the taxable service was sent to
the recipient; or.
(iii) consideration for the same was received; whichever is
earlier
(3)Notwithstanding anything contained in sub-section (1), the
Board may, by a notification in the official Gazette, direct that
the tax in respect of all or such classes of taxable services,
as may be specified in the aforesaid notification, shall be
charged, collected and paid in any other way, mode, manner
or time as may be specified therein.
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Muhammad Junaid Ghaffar
Advocate High Court
Chapter III Continued
(4)The tax due on taxable services shall be
paid by any of the following modes,
namely:(a)through deposit in a bank designated by
the Board; or
(b)through such other mode and manner as
may be specified by the Board
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Muhammad Junaid Ghaffar
Advocate High Court
Chapter III Continued

Section 18 “Joint & Several Liability of registered
persons where tax unpaid”

Where a registered person receiving a taxable service from another
registered person is in the knowledge of or has reasonable grounds to
suspect that some ·or all of the tax payable in respect of that taxable
service or any previous or subsequent taxable service provided would
go unpaid, such person as well as the person providing the taxable
service shall be jointly and severally liable for payment of such unpaid
amount of tax.
Provided that the Board may by notification in the official Gazette,
exempt any transaction or transactions from the provisions of this
section.
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Muhammad Junaid Ghaffar
Advocate High Court
Chapter III Continued
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Section 19. “Sales of taxable activity or
transfer of ownership”
Section 20. “Estate of Deceased Person”
Section 21. “Estate in bankruptcy”
Section 22. “Liability for payment of tax in
the case of private companies or
business enterprises”
Muhammad Junaid Ghaffar
Advocate High Court
Chapter III Continued

Section
23
“Assessment
of
Tax”
corresponds to section 11 of the Sales Tax
Act 1990.
(1)Where on the basis of any information acquired during an audit,
inquiry, inspection or otherwise, an officer of the SRB, not
below the rank of Assistant Commissioner SRB is of the opinion
that a registered person has not paid the tax due on taxable
services provided by him or has made short payment, the
officer shall make an assessment of sales tax actually payable
by that person and shall impose a penalty and charge default
surcharge in accordance with sections 43 and 44.
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Muhammad Junaid Ghaffar
Advocate High Court
Chapter III Continued
(2)No order under sub-section (1) shall be made by an officer of the SRB
unless a notice to show cause is given to the person in default within
five years from the end of the tax period to which the order relates
specifying the grounds on which it is intended to proceed against him
and the said officer shall take into consideration the representation
made by such person and provide him with an opportunity of being
heard if the person so desires.
(3)Any order under sub-section (1) shall be made within one hundred and
twenty days of issuance of the show cause notice or within such
extended period as the officer of the SRB may, for reasons to be
recorded in writing, fix provided that such extended period shall in no
case exceed sixty days.
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Muhammad Junaid Ghaffar
Advocate High Court
Chapter III Continued
(4)In computing the period specified in sub-section (3), any
period during which the proceedings are adjourned on
account of a stay order or proceedings under section 65
or the time taken through adjournment by the person not
exceeding thirty days shall be excluded.
(5)An order passed by an officer of the SRB under subsection (1) may be further amended as may be necessary
when on the basis of information acquired during an
audit, inquiry, inspection or otherwise, the officer of the
SRB is satisfied that:
46
Muhammad Junaid Ghaffar
Advocate High Court
Chapter IV Registration (Sections
24 & 25 & rules 3 to 10)
47

Section 24 “Registration”

Must be a resident as defined in Section
2(33) of the Act.

Provides any of the services listed in 2nd
Schedule

Or fulfills any other criteria which the
Board may prescribe.
Muhammad Junaid Ghaffar
Advocate High Court
Chapter IV Registration (Sections
24 & 25 & rules 3 to 10)

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
48
Further, a person would be deemed to be a
registered person if he receives a taxable service
as defined in section 3(2) for the tax period in
which he receives that service, or consideration
of that service has been paid by that person,
whichever is earlier, and, further all the
provisions of the Act and Rules will apply
Procedure for Registration is provided in Chapter
II Rule 3 to 10, which includes;
Rule 3 Application;
Muhammad Junaid Ghaffar
Advocate High Court
Chapter IV Registration (Sections
24 & 25 & rules 3 to 10)

49
Rule (4) REQUIREMENT OF REGISTRATION.(1)
The providers of taxable services are required to be
registered in the manner specified in this Chapter.
(2).Where service provider provides one or more
taxable services from one or more premises or a
registered person having a centralized billing
systems or centralized Accounting systems in the
Province, such service from more than one premises
or offices, require one registration.
Muhammad Junaid Ghaffar
Advocate High Court
Chapter IV Registration (Sections 24 & 25
& rules 3 to 10)
50
(3).Where a registered person is providing more than
one taxable service, he may make a single
application mentioning therein all the taxable
services provided by him Certificate of Registration
in the prescribed form shall indicate details of all
taxable services provided by him.
5. APPLICATION FOR REGISTRATION: A person
required to be registered under the Act shall apply
electronically to the Board in the prescribed Form
Muhammad Junaid Ghaffar
SST-01,
Advocate High Court
Chapter IV Registration (Sections 24 & 25 & rules
3 to 10)
6. AUTOMATIC GRANT OF REGISTRATION: The
existing taxpayers shall not be required to file application
for registration. They will be automatically registered for
Sindh Sales Tax on Services and the registered person
shall be intimated through email or SMS and by courier or
post assigning them S as prefix to NTN(S+NTN).
7. Change in particulars of Registration:
8. Transfer of Registration:
51
Muhammad Junaid Ghaffar
Advocate High Court
Chapter IV Registration (Sections
24 & 25 & rules 3 to 10)
9. DE-REGISTRATION: Every registered person who
ceases to provide taxable service shall apply to the
Board through an application for the cancellation of the
registration on a prescribed Form SST-02.
10. SUSPENSION AND CANCELLATION OF THE
REGISTRATION:
52
Muhammad Junaid Ghaffar
Advocate High Court
Chapter IV Registration (Sections
24 & 25 & rules 3 to 10)


53
Section 24A “Voluntary Registration”
Section 24B “Compulsory Registration”
permissible but with an advance notice to a person
being compulsorily registered under the Act.
Muhammad Junaid Ghaffar
Advocate High Court
Chapter IV Registration (Sections
24 & 25 & rules 3 to 10)

Section 25 “Suspension of Registration”
The Board can suspend registration
(i) If a person is not entitled to be registered;
(ii)Has failed to comply with its obligations
(b)Suspension can be effected by removal of name from
the website of Board;
(2)The Board is required to give notice stating reasons
for suspension
(3)If no satisfactory reply is given the Board may
suspend the registration

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Muhammad Junaid Ghaffar
Advocate High Court
Chapter IV Registration (Sections
24 & 25 & rules 3 to 10)
(4) At any time within 60 days of suspension
Board may withdraw the suspension
(5) If such withdrawal is not made,
(a)Proceedings may be initiated in respect of
the alleged offence;
(b)Registration may be reinstated
© Or the same is cancelled
55
Muhammad Junaid Ghaffar
Advocate High Court
Chapter V Book Keeping and Audit
Proceedings Sections 26 to 29






56
Section 26 “Records”
Registered person required to keep record of all
services (including exempt) in English or Urdu in a
manner indicating
The description and type of service
Value of service
Name and address of recipient
Any other information required under law;
Muhammad Junaid Ghaffar
Advocate High Court
Chapter V Book Keeping and Audit
Proceedings Continued




57
The Board can also direct and regulate the
number of business bank accounts to make or
receive payments of such services.
May also direct use of electronic cash registers
for certain classes of registered persons
May also regulate use of electronic software;
Registered persons subject to audit under the
Companies Ordinance 1984, shall be required to
send a certificate from auditors certifying
payment of sales tax and any deficiency as well
Muhammad Junaid Ghaffar
Advocate High Court
Chapter V Book Keeping and Audit Proceedings
Continued





58
Section 27 “Retention of Records”
Records to be retained for a period of 5 years
after the end of tax period to which such record
or documents relate or till final decision in any
proceedings, which ever is later;
Section 28 “Audit Proceedings”
May be conducted once in a year ordinarily
Prior notice to be issued
Muhammad Junaid Ghaffar
Advocate High Court
Chapter V Book Keeping and
Audit Proceedings Continued




59
After conduct of preliminary audit,
audit observation to be issued
which is to be replied in 21 days time and
thereafter audit report to be issued;
Thereafter an order will be passed in terms of
section 23 or 47 as the case may be, imposing the
amount of tax, default surcharge and penalty;
Muhammad Junaid Ghaffar
Advocate High Court
Chapter V Book Keeping and Audit
Proceedings Continued



60
A person can pay the short paid amount of tax
and default surcharge voluntarily before any
notice, and in that case no penalty shall be
imposed;
If the same is done during audit before issuance
of show cause, then additionally 20% of the
prescribed penalty is also payable;
And finally if the same is deposited after
issuance of show cause notice, then 50% of the
penalty is payable;
Muhammad Junaid Ghaffar
Advocate High Court
Chapter V Book Keeping and Audit
Proceedings Continued



61
Section 29 “Special Audit by
Accountants or Cost Accountants;
Chartered
The same can be done even in case where
normal audit by an officer of the SRB has
been done
The person so appointed shall have powers
of sections 19, 39 & 42 of the Act;
Muhammad Junaid Ghaffar
Advocate High Court
Chapter VI Returns Sections 30
to 33




62
Section 30 “Returns”
Every registered person to file return not later
than due date in a designated Bank with the
amount of tax;
Quarterly returns can also be prescribed by
Board;
In addition annual returns can also be required;
Electronic returns shall be deemed to fulfill the
above requirement;
Muhammad Junaid Ghaffar
Advocate High Court
Chapter VI Returns Continued




63
Section 31 “Special Return”
Any unregistered person can also be asked
to furnish a return;
Section 32 “Final Return”
Section 33 “Return deemed to have been
made”
Muhammad Junaid Ghaffar
Advocate High Court
Chapter VII Appointments
Sections 34 to 42





Section 34 is Appointment of Authorities;
Section 35 Powers
Section 36 Delegation of Powers;
Section 37 “Special Judges”
The Government may, by notification in the official Gazette,
appoint as many Special Judges a person who is serving or has
retired as District and Session Judge for a period of at least 5
years and, where it appoints more than one Special Judge, it
shall specify in the notification the headquarters of each Special
Judge and the territorial limits within which he shall exercise
jurisdiction under this Act and the rules made there under.
64
Muhammad Junaid Ghaffar
Advocate High Court
Chapter VII Appointments Continued


65
A person shall be appointed as a Special Judge, if
he has served as Judge in BS 21 or above for at
least a period of 7 Years and qualifies to be a Judge
of High Court.
If a Special Judge is, for any reasons, temporarily
unable to perform his duties under this Act or the
rules made there under, he may generally or
specially authorize the Sessions Judge of the district
to perform such duties of an urgent nature as he may
deem proper and such Sessions Judge shall perform
such duties.
Muhammad Junaid Ghaffar
Advocate High Court
Chapter VII Appointments Continued

Section 38 “Cognizance of offences by
Special Judges”

upon a report in writing made by an officer of the SRB, not
below the rank of Deputy Commissioner SRB with the
approval of the Commissioner SRB, or by an officer
especially authorized in this behalf by the Government;
upon receiving a complaint or information of facts
constituting such offence made or communicated by any
person; or
upon his knowledge acquired during any proceeding before
him.


66
Muhammad Junaid Ghaffar
Advocate High Court
Chapter VII Appointments Continued
67

Section 39 “Application of Code of
Criminal Procedure”

Section 40 “Exclusive Jurisdiction”

Section 41 Place of Sitting;

Section 42 Appointment of Prosecutors”
Muhammad Junaid Ghaffar
Advocate High Court
CHAPTER VIII (OFFENCE AND
PENALITIES) sections 43 to 56)
68

43. Offences and Penalties

Whoever commits any offence described in column
(1) of the Table below shall, in addition to and not in
derogation of any punishment to which he may be
liable under any other law, be liable to the penalty
mentioned against that offence in column (2) thereof.
The Sections referred to in column (3) are meant for
illustrative purposes only and the corresponding
offence described in column (1) may fall and be
prosecuted under other sections of this Act as well.
Muhammad Junaid Ghaffar
Advocate High Court
CHAPTER VIII (OFFENCE AND
PENALITIES)


69
Section 44. “Default Surcharge”
Notwithstanding the provisions of section 23, if a
registered person does not pay the tax due or any
part thereof, whether willfully or otherwise, in
time or in the manner specified under this Act,
rules or notifications issued there under, he shall,
in addition to the tax due and any penalty under
section 43, pay default surcharge at the rate
mentioned below:Muhammad Junaid Ghaffar
Advocate High Court
CHAPTER VIII (OFFENCE AND
PENALITIES)


70
the person liable to pay any amount of tax or
charge, shall pay default surcharge at the rate of
Inter-Bank Rate plus three per cent per annum of
the amount of tax due; and
in case, the default is on account of tax fraud,
the person who has committed tax fraud shall pay
default surcharge at the rate of two per cent per
month, of the amount of tax evaded, till such time
the entire liability including the amount of default
surcharge is paid
Muhammad Junaid Ghaffar
Advocate High Court
CHAPTER VIII (OFFENCE AND
PENALITIES)


71
For the purpose of calculation of default
surcharge, the period of default shall be
reckoned from the sixteenth day of a month
(following the due date of the tax period to which
the default relates) to the day preceding the
date on which the tax due is actually paid.
Explanation-- For the purpose of this section tax
due does not include the amount of penalty.
Muhammad Junaid Ghaffar
Advocate High Court
CHAPTER VIII (OFFENCE AND
PENALITIES)




72
Section 45 “Exemptions form penalty and
Default Surcharge”
Section 46 “Compounding of Offences”
Section 47 “Recovery of Tax not levied or short
levied”;
By reason of some inadvertence, error or
miscalculation on the part of an officer of the
SRB any short levied tax or charge can be
recovered within 5 years after issuance of notice;
Muhammad Junaid Ghaffar
Advocate High Court
CHAPTER VIII (OFFENCE AND
PENALITIES)



73
Amount of tax short levied to be
determined after reply of tax payer
Order to be made within 120 days
extendable to a maximum of 60 days,
excluding the adjournments sought by the
tax payer;
Section 48 “Power to summon persons to
give evidence and documents”
Muhammad Junaid Ghaffar
Advocate High Court
CHAPTER VIII (OFFENCE AND
PENALITIES)



74
Section 49 “power to arrest and
prosecute”
Person involved in tax fraud can be
arrested by the an officer not below the
rank of Commissioner;
If a company has committed tax fraud,
every director or officer of that company
shall be liable to be arrested;
Muhammad Junaid Ghaffar
Advocate High Court
CHAPTER VIII (OFFENCE AND
PENALITIES)



75
Section 50 “Procedure to be followed on
arrest of a person”
Section 51 “ Authorized officers to have
access to premises, stocks, accounts and
records”
Section 52 “Obligation to produce
documents and provide information”
Muhammad Junaid Ghaffar
Advocate High Court
CHAPTER VIII (OFFENCE AND
PENALITIES)




76
Section 53 “Searches under warrant”
Section 54 “Posting of an officer of SRB
to business premises”
Section 55 “Revision by the
Commissioner”
Section 56 “Revision by the Board”
Muhammad Junaid Ghaffar
Advocate High Court
CHAPTER IX (Appeals) Sections 57
to 65A)



77
Section 57 “Appeals”
Any person, other than the Board or any of its
officers, aggrieved by any decision or order
passed under sections 13, 18, 19 or 38 by an
officer of the SRB may, within thirty days of the
date of receipt of such decision or order, prefer
an appeal to the Commissioner (Appeals) SRB.
sections should be 23 & 47 and needs
amendment in this regard;
Muhammad Junaid Ghaffar
Advocate High Court
CHAPTER IX (Appeals) Continued


78
Section 58 “Procedure in Appeal”
Stay can be granted to a tax payer
without notice to department for 15 days
and thereafter hearing both the parties
can be confirmed, varied or vacated but
cannot remain valid for more than 60 days
under any situation;
Muhammad Junaid Ghaffar
Advocate High Court
CHAPTER IX (Appeals) Continued



79
Section 59 “Decision in Appeal”
Order to be passed in maximum of 120 days which
is further extendable to 60 days;
Where the Commissioner (Appeals) SRB has not
made an order under sub-section (1) before the
expiration of four months from the end of the
month in which the appeal was lodged, the relief
sought by the appellant in the appeal shall be
treated as having been given and all the provisions
of this Act shall have effect accordingly.
Muhammad Junaid Ghaffar
Advocate High Court
CHAPTER IX (Appeals) Continued


A person may be appointed as a Judicial Member
of the Appellate Tribunal if the person-is qualified to be a Judge of High Court and has
remained a Judge of the District court for at
least 5 years,

is below the age of sixty-five years.

80
Section 60 “Appellate Tribunal”
Muhammad Junaid Ghaffar
Advocate High Court
CHAPTER IX (Appeals) Continued




81
A person may be appointed as an Accountant
Member of the Appellate Tribunal if the person is
an officer of the SRB/ FBR equivalent in rank to
that of:
a Commissioner (Appeals) SRB/ FBR having at
least three years experience as Commissioner
SRB; or
a Commissioner SR8/FBR having at least five
years experience- as Commissioner SRB; and
is below the age of sixty-five years;
Muhammad Junaid Ghaffar
Advocate High Court
CHAPTER IX (Appeals) Continued




82
Notwithstanding above, Government may, for three years
from the day this Act comes into effect, appoint any person
who has worked for a minimum of three years:
in the Federal Board of Revenue or Provincial Excise and
Taxation Department in the rank not below the Bs.20 for 5
years in aggregate, or
as Collector of Sales Tax (Appeals) under sub-section (b) of
section 30 of the Sales Tax Act 1990,for 3years with
service of at least 5 years in Bs. 20,
as an Accountant Member of the Appellate Tribunal
Muhammad Junaid Ghaffar
Advocate High Court
CHAPTER IX (Appeals) Continued





83
Section 61 “Appeal to Appellate Tribunal”
Section 62 “Disposal of Appeal by
Tribunal”
Dismissal of appeal on Non prosecution;
Stay can be granted without notice to be
confirmed or varied within 30 days;
Shall in no case be operative for more than
90 days;
Muhammad Junaid Ghaffar
Advocate High Court
CHAPTER IX (Appeals) Continued




84
The Tribunal can modify, annul and remand
the order appealed against;
Section 63 “Reference to High Court”
Section 65 “Alternate Dispute Resolution”
Section 65A“Appointment of Ombudsman”
Muhammad Junaid Ghaffar
Advocate High Court
CHAPTER X & XI





85
Section 66 “Recovery of Arrears”
Provisions of Land Revenue Act 1967 would apply mutatis
mutandis
Section 67 “Agent” means;
where the person is an individual under a legal disability the
guardian or manager who receives or is entitled to receive
income on behalf, or for the benefit of the individual;
where the person is a company (other than a trust, a
Provincial Government. or local authority in Pakistan), a
director or a manager or secretary or accountant or any
similar officer of the company;
Muhammad Junaid Ghaffar
Advocate High Court
CHAPTER X & XI Continued

where the person is a trust declared by a duly executed
instrument in writing whether testamentary or otherwise,
any trustee of the trust;


86
where the person is a Provincial Government, or local
authority in Pakistan, any individual responsible for
accounting for the receipt and payment of money or funds
on behalf of the Provincial Government or local authority;
where the person is an association of persons, a director or
a manager or secretary or accountant or any similar officer
of the association or in the case of a firm any partner in the
firm;
Muhammad Junaid Ghaffar
Advocate High Court
CHAPTER X & XI Continued



87
where the person is the Federal Government, any individual
responsible for accounting for the receipt and payment of
moneys or funds on behalf of the Federal Government; or.
where the person is a public international organization, or a
foreign government or political sub-division of a foreign
government, any individual responsible for accounting for
the receipt and payment of moneys or funds in Pakistan on
behalf of the organization, government, or political
subdivision of the government.
When any person is expressly or impliedly authorized by a
registered person to be his agent for all or any of the
purposes of this Act.
Muhammad Junaid Ghaffar
Advocate High Court
CHAPTER X & XI Continued




88
Section 68 “Liability and obligations of
agents”
Section 69 “Liability of the registered
person for the acts of his agent”
Section 70 “Appearance by Authorized
Representative”
Section 71 “E-Intermediaries” Read with
Rules 18 to 20 of Chapter IV of Rules.
Muhammad Junaid Ghaffar
Advocate High Court
Important Rules under section 72
Read with 13 of the Act



89
Chapter IV Procedure for collection of
sales tax on services, Rule 24 to 29;
Rule 28 deals with Determination of Tax
Liability;
Rule 29 deals with Record Keeping and
Invoicing;
Muhammad Junaid Ghaffar
Advocate High Court
Part I



90
Rule 30 Procedure for collection of Sales tax on services
provided by banking companies, financial
institutions and non-banking finance companies (1) The
provisions of these rules shall apply for collection of Sales
tax on services by persons providing or rendering financial
services as notified under the Second schedule to the Act.
(2) Every banking company and non-banking financial
company shall pay the sales tax leviable on all services
rendered or provided to any person except the services of
utility collection, Umra and Hajj service, cheque book
issuance cheque return, Musharika and Modarba Financing.
Muhammad Junaid Ghaffar
Advocate High Court
Part I




91
The central offices located in the Province of Sindh shall
apply to the Sindh Revenue Board for registration;
The tax under these rules shall be paid on the gross amount
charged for service provided to the customers excluding
mark-up or interest.
The tax shall be paid along with the return
If not deposited by the due date, it shall, in addition to the
payment of Sales tax and default surcharge, be also liable
to penalty under the Act or these rules.
Not be required to issue invoices. A reconciliation
statement shall be filed by 5th of the month following the
end of every quarter.
Muhammad Junaid Ghaffar
Advocate High Court
Part I


92
Each outlet of the company located in Sindh shall
maintain records of the services provided or rendered
The Central Office in the Province of Sindh shall
submit a copy of annual audit report to the
commissioner of sales tax with in 15 days of its
publication and any short collection of tax found out
as a result of such audit report shall be paid by the
registered person within 15 days of the notice
received for such collection.
Muhammad Junaid Ghaffar
Advocate High Court
Part II





93
Rule 31 Procedure for Insurance Companies;
Sales tax on gross amount of premium;
Shall be accounted for in the same month in which the
premium is received;
In case Sales tax is not paid by the due date, in
addition to the payment of Sales tax and default
surcharge, also liable to penalty under the Act or
these rules.
shall not be liable to pay the Sales tax in respect of
contract or any part thereof if cancelled.
Muhammad Junaid Ghaffar
Advocate High Court
Part II


94
Maintain records and submit returns as the Board
may prescribe from time to time.
annual audit report, duly audited by a chartered
accountant, shall be submitted to the
Commissioner within 15 days of its receipt and any
short payment of Sales Tax found out as a result
of such audit shall be paid within 15 days of the
receipt of the audit report and proof of such
payment shall be furnished to the Board
Muhammad Junaid Ghaffar
Advocate High Court
Rule 32 Shipping agents;



95
Shall charge, collect and pay the Sales Tax in respect of
each ship handled by him which calls at any port of Pakistan
after calling on a foreign port.
shall pay Sales Tax on commission charged on the net ocean
freight amount of cost and freight import or export cargo
for such services provided or rendered by him.
value of taxable services shall not include reimbursable
expenses (except any fee or share in charges
realized)incurred by an agent, such as freight, pilot age and
berth-hiring charges, port dues, cargo expenses, brokerage
paid on export cargo and ship handling expenses paid to the
stevedores including all ancillary charges.
Muhammad Junaid Ghaffar
Advocate High Court
Rule 32 Shipping agents;



96
tax due for each month shall be paid at the time of
filing of return by the 15th
The Assistant Collector of the concerned Customs
shall not grant final port clearance to a ship unless the
agent furnishes proof of filing of return and proof of
payment of tax (if shown payable in the return).
shall furnish to the Board a monthly statement in
respect of ships handled by him by the 15th day of
the following month, in the prescribed manner.
Muhammad Junaid Ghaffar
Advocate High Court
Part IV Advertising Companies


97
shall maintain account of all services & shall issue a bill of
charges for each transaction from a duly bound book of
serially numbered bills of charges or electronically
generated invoices which shall include the particulars of the
person providing or rendering service, description of the
service provided or rendered and the amount charged.
bill referred to in sub-rule(2) shall be given to the person
to whom such services have been provided or rendered and
one copy thereof shall be retained by the person providing
or rendering services in the said bound book of bills of
charges.
Muhammad Junaid Ghaffar
Advocate High Court




Not more than one book of bill shall be used at one time
provided that where such person has one or more branches
of the establishment; separate book of bill of charges may
be used for each such branch.
The advertising agent shall also maintain their accounts in
register on a weekly basis ending every Thursday
The person providing or rendering service shall pay duty on
quarterly basis by the
15th day of November, February, May and August on the
basis of the amount of commission charged or billed during
the last quarter.
98
Muhammad Junaid Ghaffar
Advocate High Court
Part V Advertisement on TV/Radio




99
“taxable services” means the services in respect
of advertisementsBroadcast or telecast by TV or radio stations
based in Pakistan;
Booked in Pakistan for broadcasting or telecasting
on TV or radio stations based abroad, whether or
not possessing landing rights in Pakistan; and
Transmitted on closed circuit T.V. or cable T.V.
networks.
Muhammad Junaid Ghaffar
Advocate High Court
Part V Advertisement on TV/Radio



10
0

Value of taxable service shall be the total consideration in
money received or the gross amount charged by a service
provider from his clients for broadcasting or telecasting of any
advertisement on radio or television, including all Federal and
Provincial levies but excluding the amount of sales tax.
Client (Registered) whose advertisement is released on radio or
television, and to whom the sales tax invoice is issued can
claim input adjustment of tax paid on account of advertisement
on radio or television subject to
Payments through banking channels as is easily verified;
invoices issued are in accordance with the specimen
Muhammad Junaid Ghaffar
Advocate High Court
Part VI Telecommunication




10
1
Every person engaged in telecommunication
services as mentioned in the Second Schedule
must register and pay Sales Tax
In case of post paid telephone services, by the
21st day of the following second month;
In case of pre-paid telephone services, by the
21st day of the following month; and
In case of other services, by the 21st day off the
following month
Muhammad Junaid Ghaffar
Advocate High Court
Part VI Telecommunication



10
2
the person shall be entitled to deduct
input tax paid on procurement of any
equipment or the Sales tax paid on
acquiring services in connection with the
provision of telecommunication services.
Shall submit revenue wise statement with
proof of payment of Sales Tax in the
prescribed manner
Muhammad Junaid Ghaffar
Advocate High Court
Part VII Franchise Fee services


10
3
Where payment of franchise/technical fee or royalty is
made under a proper agreement the assessable value for
the purpose of levy of 10% sales tax shall be the gross
amount remitted or paid to the franchiser or the amount
laid down in the franchise agreement;
For beverage companies, without formal agreement the
value for sales tax shall be 10% of concentrate vlaue
supplied by the franchisor. However, in such cases where
proper remittance fee is being made by the beverage
company to the local or foreign franchiser under a proper
agreement, the assessable value shall be the gross amount
of fee or royalty remitted or paid to the franchiser or the
amount laid down in the agreement;
Muhammad Junaid Ghaffar
Advocate High Court
Part VII Franchise Fee services



10
4
Similar provision exists for food sector, in case of an
agreement. However In case there is no formal agreement
the assessable value for levy of sales tax shall be 10% of
the net sales of the franchisee;
In case where the franchiser and franchisee are local the
liability to deposit the franchise fee or royalty shall be
upon the franchiser ;
the sales tax shall be payable on the 15th day of the month,
following the payment month laid down in the franchise
agreement. Where there is no date prescribed in the
agreement or in case of no agreement the tax shall be
payable on the 15th day on quarterly basis.
Muhammad Junaid Ghaffar
Advocate High Court
Part VIII Custom Agents & Ship
Chandlers Rule 37


Value of service shall be the total consideration received by
a Customs agent for providing the service.
It shall not include considerations received on account of
transportation charges, demurrage, wharfage, customsduties, excise duty, sales tax, provincial duties or taxes, toll
taxes, municipal charges, port charges; handling charges,
packing charges, labor payment and such other reimbursable
expenses paid on behalf of clients against a proper receipt.

10
5

fee or commission is realized from such service providers
then the same shall be included in the base for application
of the tax rate.
Muhammad Junaid Ghaffar
Advocate High Court
Ship Chandlers


10
6
Value for sales tax shall be total consideration
received for providing services,
shall not include consideration received on other
accounts such as transportation charges, toll taxes,
municipal charges, port charges, handling charges,
packing charges and labor charges, which a shipchandler pays on behalf of his clients against a proper
receipt or bill. However if any fee or commission is
realized from such service providers then the same
shall be included in the base for application of the tax
rate.
Muhammad Junaid Ghaffar
Advocate High Court
Rule 38 & 39 Stevedores & Freight
Forwarders



10
7
Every person registered as stevedore shall file monthly
sales tax return in the manner as prescribed in these rules.
The cases or disputes relating to the stevedores operating
under these rules shall be dealt with by the Board.
Freight forwarder is person who provides or renders or is
engaged for his principals or client(s) for providing or
rendering of services, for fee or charges or commission or
remuneration for some or all the services being provided by
the Shipping agents, Clearing agent, Stevedore, Ship
Chandler, Terminal Operator or such services of
warehousing and/or provides cover or guarantee for
insurance or banking services,
Muhammad Junaid Ghaffar
Advocate High Court
Rule 38 & 39 Stevedores & Freight
Forwarders

10
8
in respect of imports or exports of goods,
whether independently or in partnership or in
arrangement with any such service provider or
renderer.
will pay Sales Tax on providing, rendering of
services or arranging thereof, of any or all
such services; at the rate of 16% of fee,
commission, remuneration or charges invoiced
for such services.
Muhammad Junaid Ghaffar
Advocate High Court
Rule 40 Port & Terminal Operators




10
9
Sales tax on import related services by Port and
Terminal Operator namely:Piloting and mooring; Delivery charges; Storage in
port area including demurrage; Wharfage; and
Other import related services provided in port
area.
Value for levy of sales tax shall be the gross
amount charged for the services.
shall maintain records under section 26 of the
Act.
Muhammad Junaid Ghaffar
Advocate High Court
Rule 41 (Stock Brokers)


11
0
Value of sales tax shall be gross
commission charged from clients in
respect of purchase or sale of shares in a
Stock Exchange.
shall maintain records as stipulated in
section 26 of the Act in such manner as
will enable distinct ascertainment of
payment of tax due
Muhammad Junaid Ghaffar
Advocate High Court
Rule 42 Hotels, restaurants, Clubs, Caterers
(Services related to food items, drinks &
eatables)


11
1

Such Persons having Rs3.6 M per annum turnover
of all the outlets required to be registered which
shall be determined keeping in view area, location,
city, menu served, capacity and by delivery and
sale/supply, if not otherwise determinable.
Hotels, restaurants, marriage halls, lawns, clubs
and caterers shall charge/pay sales tax at the
rate specified in Second Schedule of the Act for
supplying foods
No free of charge/lower than menu price.
Muhammad Junaid Ghaffar
Advocate High Court
Rule 42 Hotels, restaurants, Clubs, Caterers
(Services related to food items, drinks & eatables)
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2
The food served by flight- kitchens on-board the
conveyance leaving for a destination outside Pakistan shall
be exempt.
Other services provided or rendered by clubs and hotels:
In relation to clubs, the value of taxable services shall be
the gross amount charged including fee relating to award of
new membership, monthly membership fee and all Federal or
Provincial levies, if any, which club receives from its
members or clients for providing or rendering taxable
services. It shall not include consideration received on
account of refundable deposit or security unless the same is
deducted or adjusted in full or in part as settlement or
recovery of dues for services.
Muhammad Junaid Ghaffar
Advocate High Court
Rule 42 Hotels, restaurants, Clubs, Caterers
(Services related to food items, drinks & eatables)
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11
3

In relation to hotels, the provisions of this part shall apply
for collection and payment of Sales Tax on all the services
like gym, sports, swimming, golf, events organized,
exhibitions, shows, parties etc, used by the clients in
addition to the food, drinks and other eatables.
Every registered person shall submit the monthly return
Every person shall print, the price of each item;
The consumer shall be billed accordingly;
The registered persons shall issue a serially numbered Sales
Tax invoice or bill.
shall maintain all records as prescribed under the Act
Muhammad Junaid Ghaffar
Advocate High Court
Rules 43 to 59
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4
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Tax Payers authorized representatives;
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Special Audit Rules;
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Alternate Dispute Resolution;
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Appeals and Allied Matters;
Muhammad Junaid Ghaffar
Advocate High Court
Issues to be considered by SRB
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11
5
Definition of Value of Taxable Service in terms of
section 5 is vague and is dependent on open
market price in terms of section 6 which is alien
to the concept of competitive services;
Input Tax admissibility should be crystal clear
and unambiguous; Section 15 read with Rule 22 do
not assist the tax payer;
Services not taxed by other Provinces shall also
be exempted; otherwise, would amount to
discrimination;
Muhammad Junaid Ghaffar
Advocate High Court
Issues to be considered by SRB
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11
6
Since the Act and the rules are in its infancy, the
filing of returns for July should be clubbed with
returns of August 2011 to facilitate the genuine
tax payer;
Sales Tax entrusted to FBR on the basis of
Record Note as agreed upon between FBR and
Provinces and categorization of Standalone Group,
Telecommunication Group & Services requiring
Input/output adjustments be clarified;
Muhammad Junaid Ghaffar
Advocate High Court
Issues to be considered by SRB
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11
7
The Qualifications of becoming a Judicial Member of
Tribunal must be amended to include persons who are
Advocates of High Courts and are eligible to be a
Judge of a High Court, similar to the Customs Act;
Finished Products liable to Sales Tax under the 1990
Act as goods, also involve services as part of their
value of supply. If Such products are required to pay
sales tax on services separately by the same person,
then beside double taxation, lot of issues of
registration, documentation etc would crop up
Muhammad Junaid Ghaffar
Advocate High Court