The Federal Board of Revenue has proposed to expand the scope of services within the income tax regime by amending the Income Tax Ordinance 2001, incorporating the list of hundreds of service providers mentioned in the Customs Act, 1969 to bring services sector into the tax net. Sources told Business Recorder on Friday that the at present Income Tax Ordinance 2001 doe not carry comprehensive definition of the services as compared to the definition mentioned in the Customs Act, 1969.
Under the Customs Act, a full-fledged Chapter (98) is related to the comprehensive list of services for the purpose of taxation. This detailed definition of the services would be incorporated in the income tax law to ensure documentation of services in the Customs Act 1969.
The issue of definition of services in the Income Tax Ordinance came to the light during a presentation of Ali Hasnain Commissioner Regional Tax Office (RTO) Islamabad on the tax policy during the Chief Commissioners Conference held at the FBR House. During the presentation, Commissioner RTO Islamabad pointed out that the scope of the services is very limited under the Income Tax Ordinance 2001 that needs to be enhanced according to the income tax law.
Tax authorities have agreed to the proposal of the Commissioner RTO Islamabad to expand the scope of services under the Income Tax Ordinance 2001. One of the senior tax officials referred to the Chapter 98 of the Customs Act 1969 encompassing list of all major services. It was agreed to incorporate the list of the services mentioned in Chapter 98 of the Customs Act 1969 into the Income Tax Ordinance 2001, sources said.
Sources added that the FBR Income Tax Policy Wing would work on the proposal and it would be implemented in the next budget. At the same time if there is any ambiguity in the income tax law it would also be removed. According to the decision of the Chief Commissioners' Conference, the FBR has directed the Chief Income Tax Policy that the definition of the services would be borrowed from Customs/Sales Tax Act, 1990.
Following services have been mentioned in the Chapter 98 (Services) of the Customs Act, 1969: Services provided or rendered by hotels, restaurants, marriage halls, lawns, clubs and caterers. It included services provided or rendered by hotels, services provided or rendered by restaurants, services provided or rendered by marriage halls and lawns, services provided or rendered by clubs, services provided or rendered by caterers, suppliers of food and drinks, ancillary services provided or rendered by hotels, restaurants, marriage halls, lawns, caterers, services provided or rendered by messes and hostels and other.
Within the category of advertisements, the services included advertisement on TV, advertisement on radio, advertisement on closed circuit TV, advertisement in newspapers and periodicals, advertisement on cable TV network and others. Facilities for inland travel: The services included travel by air, travel by train and other. Services provided or rendered for inland carriage of goods: The carriage of goods by air, carriage of goods by train and others. Services provided or rendered by persons authorised to transact business on behalf of others: It included shipping agents and stevedores, freight forwarding agents, customs agents, travel agents, tour operators, recruiting agents, advertising agents, ship chandlers and others.
Services provided or rendered in matters of hire, purchase or sale of moveable or immovable goods or property: It included property dealers, car/automobile dealers, dealers of second hand goods other than automobiles and others. Other services of the Chapter 98 of the Customs Act, 1969: included services provided or rendered by property developers and promoters, courier services, services provided or rendered by persons engaged in contractual execution of work or furnishing supplies, services provided or rendered for personal care by beauty parlours/clinics, slimming clinics and others and services provided or rendered by laundries, dry cleaners.
Services provided or rendered by persons engaged in telecommunication work in respect of telephone, telegraph, telex, telefax and alike. It included telephone, telegraph, telex, telefax and other. Services provided or rendered by banking companies, insurance companies, co-operative financing societies, modarabas, musharikas, leasing companies, other non-banking financial institutions and other persons dealing in any such services. It included services provided or rendered in respect of insurance, services provided or rendered in respect of advances and loans and services provided or rendered in respect of leasing.
Other services included financial leasing and commodity or equipment leasing, hire-purchase leasing and other services. Services provided or rendered in respect of musharika financing. Services provided or rendered in relation to Letters of credit, Guarantees, Brokerage, Foreign exchange dealings and others.
Services provided or rendered by architects, town planners, contractors, property developers or promoters, interior decorators. It included architects or town planners, contractors of building (including water supply, gas supply and sanitary works), roads and bridges, electrical and mechanical works (including air conditioning), horticultural works, multidiscipline works (including turn-key projects) and similar other works, property developers or promoters, landscape designers and other.
Services provided or rendered by professionals and consultants etc. It included medical practitioners and consultants, legal practitioners and consultants, accountants and auditors, management consultants, technical, scientific, engineering consultants, software or IT based system development consultants and other consultants.
Services provided or rendered by pathological laboratories. Services provided or rendered by medical diagnostic laboratories including X-rays, CT Scan, M.R. Imaging etc. It covered scientific laboratories, mechanical laboratories, chemical laboratories, electrical or electronic laboratories and other such laboratories.
Services provided or rendered by specialised agencies. It covered security agency, credit rating agency, market research agency and other such agencies. Services provided or rendered by specified persons or businesses. It included stockbrokers, underwriters, indenters, commission agents, packers, money exchangers, rent-a-car, prize bond dealers, surveyors, designers, outdoor photographers, art painters and others.
Services provided or rendered by specialised workshops or undertakings. It included auto-workshops, workshops for industrial machinery construction and earth-moving machinery or other special purpose machinery etc, workshops for electric or electronic equipment or appliances etc. including computer hardware, car washing or similar service stations and other workshops.
Services provided or rendered in specified fields. It covered healthcare centres, gyms or physical fitness centres etc, indoor sports and games centres, babycare centres, body massage centres, pedicure centres and similar other centres. Services provided or rendered for specified purposes. It included fumigation services, maintenance or cleaning services, janitorial services, dredging or desilting services and other similar services, Chapter 98 (Services) of the Customs Act, 1969 added.
Comments
Comments are closed.