The Federal Board of Revenue (FBR) has decided to impose sales tax on 12 services including property dealers within the jurisdiction of Islamabad Capital Territory from July 1, 2018. Sources told Business Recorder here on Saturday that under Finance Bill 2018, the scope of services under Islamabad Capital Territory (Tax on Services) Ordinance, 2001 has been increased owing to the fact that services which are chargeable to sales tax in provinces are not chargeable to sales tax under Islamabad Capital Territory (Tax on Services) Ordinance, 2001.
However, the FBR has not mentioned rate of sales tax to be charged on these services at Islamabad Capital Territory for 2018-19. Last year, 5 percent sales tax was charged on certain services under Islamabad Capital Territory (Tax on Services) Ordinance, 2001.
According to sources, sales tax has been proposed on 12 services within Islamabad Capital Territory for 2018-19 including visa processing services, airport service, floral, other decoration, furnishing of space, ancillary or allied services whether or not involving rental of equipment and accessories, photography/ filmmaking services, services provided by accountants (including practicing chartered or cost accountants), auditors, actuaries, corporate tax consultants, liquidators, auctioneers and corporate law consultants, public relation services, auction services, services provided by stock brokers and commodity brokers, services rendered by producers for anything related to TV, film, radio production, advertisement on close circuit TV, advertisement in newspapers and periodicals, advertisement on cable TV network, advertisement on poles, advertisement on billboards, other advertisements including those on web or internet, services provided for purchase of sale or hire of immovable property and services provided by legal practitioners and consultants.
Sources added that certain services are chargeable to sales tax under Sindh Sales Tax on Services Act, 2011 and Punjab Sales Tax Services Act, 2012 and are not chargeable to sales tax under Islamabad Capital Territory (Tax on Services) Ordinance, 2001. In order to synchronize all such services, which are proposed to be included in the Schedule to Islamabad Capital Territory (Tax on Services) Ordinance, 2001.
In last budget (2017-18), sales tax was imposed on certain services under Islamabad Capital Territory (Tax on Services) Ordinance, 2001. Certain services under Islamabad Capital Territory (Tax on Services) Ordinance, 2001 were chargeable to sales tax @ 5 percent without any input tax adjustment. Scope of such services was extended to include "services provided or rendered by marriage halls and lawns," by whatever name called, including ''pandal'' and ''shamiana'' services and ''caterers'' without any input tax adjustment or refund.