SUNDAY JULY 22: Punjab Revenue Authority: ST registration of banks, NBFIs made mandatory

ISLAMABAD: Punjab Revenue Authority (PRA) has made it mandatory for the provincial head offices of the banking companies and non-banking financial institutions (NBFIs) located in Punjab to get themselves' registered with the sales tax department. In this connection, the PRA here on Saturday issued Punjab Sales Tax on Services (Specific Provisions) Rules, 2012 for collection of sales tax on financial services.
According to the rules, sales tax shall be payable by every banking company and non-banking financial institution on all its non-interest based services provided to any person against a consideration in the form of fee, commission or charge. The provincial head offices of the banking companies and non-banking financial institutions located in the province of Punjab shall obtain sales tax registration from the authority.
The tax shall be paid on the gross amount charged for a service provided to the customers excluding mark-up or interest, if any. The banking companies and non-banking financial institutions shall not be required to issue tax invoices for their services, provided that if a recipient of any taxable service is registered person, a tax invoice may be issued to him on demand.
Each outlet of the company or institution located in Punjab shall maintain records of the services provided and tax collected thereon in such manner as will enable distinct and correct ascertainment of payment of sales tax on each category of service provided.
The Provincial head office of the company or institution as the case may be, shall furnish copy of annual audit report to the Authority within 15 days of its publication and any short collection of tax observed as a result of such audit report shall be paid within 30 days of the publication of the audit report and proof of such payment shall be submitted to the Authority.
In case of insurance companies, the rules said that all insurance companies shall pay sales tax on services provided by them in respect of all kinds of insurance except those exempt from such tax. The tax shall be calculable on the gross amount of premium charged on risk covered in the insurance policy.
The tax in respect of an insurance policy shall be accounted for in the month when premium is received and deposited by the insurance company at the time of filing of return by the 15th day of the following month. An insurance company shall not be liable to pay tax in respect of a contract or any part thereof if cancelled provided that the tax already paid in respect of services provided in consequence of such contract shall not be refunded under any circumstances. The insurance companies shall maintain such records as will enable the Authority or its authorised officers to verify the accuracy of tax collections, declarations and payments etc.
A copy of annual audit report shall be submitted to the Authority within 15 days of its publication and any short payment of sales tax observed as a result of such audit shall be paid by the insurance company within 30 days of the publication of the audit report and proof of such payment shall be furnished to the Authority.