Sindh Sales Tax - Notifications issued by the Sindh Revenue Board (SRB)
REDUCTION IN TAX RATES
SRB has prescribed reduced rates of Sindh Sales Tax (SST) for certain services, subject to conditions and restrictions prescribed, inter alia including restriction for input adjustment. SRB has notified further reduction in tax rates for some services, in addition to providing reduced rate of SST for some new services. The changes are summarised as under:
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Tariff Description of services Rate of Tax
Heading No. Old New
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9805.5000 Travel agents 8% 5%
9805.5100 Tour operators 8% 5%
9811.0000 Service provided or rendered by 13% 5%
stand-alone laundries and dry
cleaners.
9813.1500 Life insurance (other than group 8% 3%
life insurance)
9830.0000 Services provided in the matter 13% 3%
of manufacturing or processing
of textile and leather goods for
others on toll basis
9834.0000 Services provided or rendered by 10% 5%
fashion designers
9836.0000 Services provided or rendered by 8% 3% (with no withholding tax), excluding road
persons engaged in inter-city transportation or carriage of:-
transportation or carriage of (i) petroleum oils through oil tankers (for which
goods by road through truck option for taxability at 15% has been extended till
addas or through bus/wagon June 30, 2020);
stands (ii) automotive vehicles, classified under tariff
headings of Chapter 87 of the First Schedule to the
Customs Act, 1969, as are transported or carried
through specialized vehicle carriers; and
(iii) goods and cargo through vehicles operated by Fleet
Logistic Companies having not less than 25 vehicles
in its fleet
Note:
Services mentioned at (ii) and (iii) above are
taxable at reduced rate of 8% unless the service
provider opts for taxation at standard rate of 13%.
9815.3000 Services provided by accountants 8% 13% (accounting and auditing services remain chargeable
and auditors other than to SST at the rate of 8% with no input tax adjustment).
accounting and auditing services
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The above amendments have been made through Notification No. SRB 3-4/11/2019 dated June 27, 2019 by amending the Notification No. SRB 3-4/8/2013 dated July 1, 2013
NEW SERVICES MADE SUBJECT TO SST AT REDUCED RATE
Effective July 1, 2019, following new services have been made subject to SST. However, these have been subjected to SST at reduced rates with the condition that no input tax adjustment will be allowed:
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Tariff Description of services Rate of
Heading No. SST
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9806.6000 Renting of machinery, equipment, appliances and other tangible goods 5%
9821.2000 Indoor sports and games center 10%
9846.0000 Services provided or rendered by cab aggregator and the services provided or
rendered by the owners or drivers of the motor vehicles using the cab aggregator services 5%
9848.0000 Training services 5%
9853.0000 Vehicle parking and valet services 5%
9855.0000 Insurance Agents* 5%
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The above amendments have been made through Notification No. SRB 3-4/21/2019 dated July 1, 2019 by amending the Notification No. SRB 3-4/8/2013 dated July 1, 2013.
-- SRB has issued Special Procedure Rules vide Notification No. SRB 3-4/22/2019 dated July 1, 2019 for collecting SST on services provided by insurance agents or insurance brokers. SRB vide Notification No. SRB 3-4/24/2019 has also made SRB registered persons or insurers ''withholding agents'' to collect SST on the services of insurance agents or insurance brokers.
WITHDRAWAL OF EXEMPTION
Exemptions provided to following services have been withdrawn as under:
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Tariff
Heading No. Description of services
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98.12 Internet services, whether dialup up or broadband, including email services and
data communication network services of upto 2 mbps speed valued at not more than
1,500 rupees per month service recipient and of more than 2 mbps speed but not more
than 4 mbps speed valued at more than 2,500 rupees per month per service recipient.
These services are now chargeable to SST@ 19.5%.
98.13 Services provided by banking companies and non-banking financial companies in respect
of Hajj and Umrah, Cheque Book issuance and Musharika and Modaraba financing.
These services are now chargeable to SST@ 13%.
9802.4000 Following advertisement in newspaper and periodicals are now taxable at 3% which were
previously exempt from SST:
(i) in colour (i.e. other than the advertisement wholly in black & white), irrespective of
the size;
(ii) in colour or black & white occupying one-quarter (or equivalent of one-quarter of a
page, generally known as 27 centimeters in height x 4 columns or 15 centimeters in
height x 8 columns) or more of a page of a newspaper; and
(iii)in colour or black & white occupying half a page or more of a page of a periodical
In line with withdrawal of exemption for the above advertisement services, withholding
rules have also been made applicable thereon.
9824.0000 Construction services relating to construction and repair of roads, ports, airports,
railways, transport terminals and bridges and also of Government (including Local
Government and Cantonment Board) buildings as are not meant for commercial purposes
or for commercial letting out on rent.
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The above amendments have been made through Notification No. SRB 3-4/12/2019 dated June 27, 2019 by amending the Notification No. SRB 3-4/7/2013 dated June 18, 2013.
REDUCTION IN THRESHOLD FOR EXEMPT SERVICES
Exemption from SST is available to following services provided annual turnover does not exceed Rs. 4 million and total utility bills does not exceed Rs. 40,000. These thresholds have now been reduced to Rs. 2.5 million and Rs. 25,000 respectively:
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Tariff Heading No. Description of services
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9810.0000 Services provided or rendered for personal care by parlours,
beauty clinics, slimming clinics or centers and others
9811.0000 Services provided or rendered by laundries and dry cleaners
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EXEMPTION FOR SERVICES UTILISED IN THE PROJECTS FINANCED BY FEDERAL OR PROVINCIAL GOVERNMENT
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S.No. Category Notification
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1 Sindh Annual (i) Presently, exemption to the extent of sales tax rate in excess of 2%
Development Program was available in respect of specified services utilised in new
(ADP) development schemes and projects which were included in the
Sindh ADP of the year 2017-2018. Through Notification SRB 3-
4/13/2019 dated June 27, 2019, the exemption has now been
extended to new schemes of 2018-19 and also covering
those which are ''on-going'' development schemes and projects of
2019-20 and thereafter.
(ii) Certain specified services utilised in new development schemes
and projects of the financial year 2019-20 or thereafter shall be
eligible for exemption from SST which is in excess of 5%.
(iii) Recipients of services stated in (i) and (ii) above have also been
made withholding agents to withhold SST at the rates stated
above.
[Notification No. SRB 3-4/13/2019 dated June 27, 2019 amending the
Notification No. SRB 3-4/9/2017 dated June 2, 2017; read with
Notification No. SRB 3-4/24/2019 dated July 1, 2019]
2 Federal PSDP Certain services utilized in new development schemes and projects
including on-going projects located in Province of Sindh and funded
partially or fully through Federal PSDP of the Government of Pakistan
of the financial year 2019-20 or thereafter shall be eligible for
exemption from SST in excess of 5%.
Recipients of above-referred services have also been made withholding
agents to withhold SST at the rate stated above.
[Notification No. SRB 3-4/14/2019 dated June 27, 2019 amending the
Notification No. SRB 3-4/3/2018 dated February 6, 2018 and
Notification No. SRB 3-4/24/2019 dated July 1, 2019]
3 Construction services - Construction services in relation to Government Civil Works (for which
Federal, Provincial or the expenditure is paid out of the expenditure budget of the Federal
Local Government Government or the Provincial Government or the Local Government or
budgets the Cantonment Board) are now taxable at 5%.
Recipients of above-referred services have also been made withholding
agents to withhold SST at the rate stated above.
[Notification No. SRB 3-4/11/2019 dated June 27, 2019 amending
the Notification No. SRB 3-4/8/2013 dated July 1, 2013 and
Notification No. SRB 3-4/24/2019 dated July 1, 2019]]
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