Sindh Revenue Board (SRB) has lodged a strong protest with the FBR Chairman over the issue of a instruction regarding certain services posted on FBR website, sources told Business Recorder on Wednesday. The issue of authorising the collection of sales tax on the said services has not been finalised as yet, but the FBR authorities posted instruction for registered taxpayers in this regard on its website, the SRB said in a letter written to the FBR chairman.
According to the instruction, sales tax registered persons providing certain services in Sindh as well as in other provinces/capital territory, need to file ST and FE return at eFBR portal as usual, provide province-wise break-up of services provided in Annex-P, pay tax by preparing the Payment Slip ID (PSID) at eFBR portal. The system will generate a computerised payment receipt at the bank counter showing the account head-wise payment to be credited as follows: Sindh sales tax on services A/C B02382, sales tax on services (FBR) A/C B02366, FED in ST mode (FBR) A/C B02367.
SRB Chairman Nazar Hussain Mehar in his letter to the FBR Chairman written a few days ago, termed the step as clear violation of the Constitution, sources said. It has been mentioned in the letter that according to entry 49 of fourth schedule the federal legislative list of the constitution of the Islamic Republic of Pakistan, tax on sale and purchase of services is a provincial domain and Article 8 of the NFC Award had also recognised the sales tax on services as a provincial jurisdiction.
The letter added that the government of Sindh, exercising its constitutional option under article 142(c) of the Constitution, has levied sales tax on services with effect from 1st July 2011, after unanimous approval of law by Sindh Assembly. The Government of Sindh has established Sindh Revenue Board (SRB) for collection of Sindh Sales Tax on Services and with support and co-operation extended by service providers, the SRB has successfully collected unprecedented tax of more than Rs 3.5 billion in less than two months, the letter said.
It said that no agency or board has the powers to amend, restrict, change or divert the procedure prescribed by the law and rules for payment of Sindh Sales Tax on Services and filing of monthly return. Besides, Mehar demanded immediate removal of the said instruction from the FBR website, sources said. Many meetings had been held between the officials of FBR and SRB but the matter of authorising the FBR to collect sales tax on services has not been finalised as yet.
The FBR had also to withdraw from FED as discussed in meetings, but it has not issued notification of withdrawal in this regard despite passage of more than two and a half months. In this connection, SRB spokesman has advised all service providers that deposit the tax due under the Sindh Government's head of account "B- 02382- Sindh Sales Tax on Services" on the PSID (SST-04) and e-deposit the amount of tax by obtaining a CPR from only designated branches of National Bank of Pakistan. He said all service providers should e-file their Sindh sales tax returns, on the prescribed form SST-03, by the due date.
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