ICT jurisdiction: Scope of ‘IT & IT-enabled services’ expanded for 16pc tax collection

ISLAMABAD: The Federal Board of Revenue (FBR) has expanded the scope of “IT services” and “IT-enabled services” for collection of 16 percent sales tax from the service providers falling within the jurisdiction of the Islamabad Capital Territory (ICT).

The FBR has issued SRO 77 (1)2021 to amend SRO 495(1)/2016, dated the 4th July, 2016 relating to the levy of sales tax on services rendered or provided in the ICT.

Under the Islamabad Capital Territory (Tax on Services) Ordinance, 2001, 16 percent sales tax is applicable on services provided by software or IT-based system development consultants.

Under the SRO 77 (1)2021, the FBR will now also charge sales tax on “IT services” include software development, software maintenance, system integration, web design, web development, web hosting and network design; and “IT enabled services” include inbound or outbound call centers, medical transcription, remote monitoring, graphics design, accounting services, HR services, telemedicine centers, data entry operations, locally-produced television programs and insurance claims processing.

Copyright Business Recorder, 2021