Transportation services or carriage of goods thru roads: Provinces notify formula for sales tax

ISLAMABAD: All four provinces have notified that the amount of sales tax would be equally shared by those provinces in which the transportation services or carriage of goods through roads would originate and terminate.

According to the uniform rules issued by the provinces on “Place of provision of services relating to transportation of goods”, in case of services of transportation or carriage of goods by road or services in relation to transport of goods other than water, through pipeline, conduit or any other medium, the place of provision of service shall be the place of the origin and the destination of such service. This would be done in a manner that the amount of tax involved is shared equally by the provinces in which the transportation originated and in which such transportation terminated.

Int’l carriage of goods by roads: FBR standardizes conditions for senders, carriers

All four provinces have issued separate notifications on the rules pertaining to the “Place of provision of services relating to transportation of goods”.

The rules revealed that where transportation or carriage of goods by road or services in relation to transport of goods other than water, through pipeline, conduit or any other medium originates and terminates in one and the same province the place of provision of service shall be the province itself.

The rules further revealed that where the transportation or carriage of goods by road or services in relation to transport of goods other than water, through pipeline, conduit or any other medium originates in a Province where the tax is levied but terminates in a Province or area where such tax is not levied, the place of provision of service shall be the Province where the transportation originates.

Provided further that where the transportation or carriage of goods by road or services in relation to transport of goods other than water, through pipeline, conduit or any other medium originates in a Province where the tax is not levied but terminates in a Province or area where such tax is levied, the place of provision of service shall be the Province where the transportation terminates.

In case of the services, provided or rendered by persons, whether a company or otherwise, in relation to road transportation of petroleum oils, the provisions of the relevant provincial (Transportation or Carriage of Petroleum Oils through Oil Tankers) Rules shall apply notwithstanding the provisions of these rules, provincial rules said.

Provided further that where the rate of tax leviable in the Province in which the transportation originated is different than the rate of tax leviable in the Province in which such transportation terminated, the invoice shall clearly indicate the amount of tax payable to the respective Provinces as determined on the basis of the respective rates of tax on 50 per cent of the value of that inter-province transportation service.

Copyright Business Recorder, 2023