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Q.1 What is the effective date of the enforcement of the Act?
Q.2 Who is authorized to administer the Service Tax in Province?
Q.3 What is Sales Tax on Service? Is it an indirect Tax?
Q.4 What is the rate of Sales Tax on Services?
Q.5 Who is liable to pay service tax to the Government?
Q.6 Is there a concept of resident and non-resident under the Act?
Q.7 How do you describe the expression, "person" appearing in the definitions of taxable service?
Q.8 What is the procedure for registration?
Q.9 Would nonprofit organizations and association of persons like clubs, provincial bodies, trade associations qualify as persons not engaged in carrying out any economic activity and therefore not be required to register for sales tax purposes?
Q.10 Whether a service provider can make payment of Service Tax and file returns before the grant Of registration by the proper officer?
Q.11 Is there any penal provision for non-registration? tax under the Act?
Q.13 How and where to pay Sales Tax on Services?
Q.14 Whether service tax deposited by the assessee in non-designated bank will amount to non-payment of Sales Tax on Services?
Q.15 What is the date of payment of Sales Tax on Services? Is it the date on which the cheque for the same is deposited /tendered in the designated Bank or the date on which the amount is credited?
Q.16 Is the amount for the Sales Tax on Services charged from the client compulsorily to be indicated separately in the Bills/Invoices raised on him?
Q.17 Can the Board or authorized Officer ask for more information than what assessee is submitting to it in the return for an or tax invoice?
Q.18 What are the precautions to be taken by the assessee while depositing the Sales Tax?
Q.19 Will the existing sales tax law on services under the Sindh Sales Tax Ordinance, 2000 and Federal Excise Duty under the Federal Excise Act, 2005 be repealed?
Q.20 Are the sales charged on services adjustable against sales tax suffered on the acquisition of goods and services?
Q.21 What is the point of taxation i.e. is the advance received for services taxable although no services have yet been rendered? If advance has been received prior to the services rendered the law requires taxability in evidence of three activities enforcement of the Act, but services are rendered subsequent to the enforcement of the Act, would such services be taxable?
Q. 22 Are there any zero rated services?
Q. 23 Is there an exemption threshold?
Q. 24 Are there any exempt services?
Q: 25 Services often include charges for reimbursement of expenses incurred on behalf of the recipient (like custom duties and other charges paid by customs agent, out of pocket expenses incurred on behalf of the clients by professionals , cost of materials paid by an advertizing agent, cost of airline ticket paid by a travel agent etc.), would these be subject to Sales tax?
Q.26 Is the Sales Tax based on self assessment?
Q.27 Will a separate return required to be filled for the Provincial Sales tax purposes?
Q.28 How often a Sales Tax audit be conducted ?
Q:29 What is appellate procedure?
Q:30 There are many Services which are included in the First Schedule; but there is no mention in the Second Schedule (taxable services). Are such services liable for Sales Tax?
Q:31 According to section 3 taxable service is a service listed in the Second Schedule. Further as per section 8 the tax shall be charged at the rate specified in the schedule in which Taxable service is listed,Does it mean that a service which is listed in the first schedule but the rate of tax on that service is not specified in the second schedule is at present taxable under the Sindh Sales Tax on Services Act 2011 Schedule (taxable services). Are such services liable for Sales Tax?
Q:32 Where we can find list of authorized bank branches?
Q:33 Will we continue to claim the input tax adjustment as per past practice? This question is based on the fact that section 15 of the Act leaves it on "Government's approval."?
Q:34 How can Federal Excise duty and sales tax be imposed simultaneously on a service?
Q:35 Have the rules under the above Act been promulgated? If yes, from where can we get a copy?
Q:36 Are Mudarabas, Musharikas and other financial institution exempt from tax?
Q.1 What is the effective date of the enforcement of the Act?
Ans. Provision of Sales Tax on Services Act will apply from July1, 2011.
Q.2 Who is authorized to administer the Service Tax in Province?
Ans. "Sindh Revenue Board" is authorized to administer the Sales tax on Service in Sindh.
Q.3 What is Sales Tax on Service? Is it an indirect Tax?
Ans. Service Tax is an indirect levy. The tax is applicable to services specified in schedule II on "Taxable Service".
Q.4 What is the rate of Sales Tax on Services?
Ans. Rate of service Tax is 16% except telecommunication where it is 19.5% on the "value of taxable services".
Q.5 Who is liable to pay service tax to the Government?
Ans. The person who provides the taxable service is responsible for collection and paying the service tax to the Government.
Q.6 Is there a concept of resident and non-resident under the Act?
Ans. Concept of resident is given in section 2 (33). It is different from the definition given in Income Tax Ordinance, 2001.
Q.7 How do you describe the expression, "person" appearing in the definitions of taxable service?
Ans. The expression refers to any natural, legal or juristic person and includes individuals, firms, companies, trusts and societies among others.
Q.8 What is the procedure for registration?
Ans. A prospective taxable service provider seeking registration should file an application in a prescribed
form (online) within thirty days from the date of notification of the taxable service. Board is required
to issue the Provisional Registration Certificate promptly online. However, final Certificate would be
issued not later than 30 days of application.
Q.9 Would nonprofit organizations and association of persons like clubs, provincial bodies, trade
associations qualify as persons not engaged in carrying out any economic activity and therefore
not be required to register for sales tax purposes?
Ans. No. All such organizations or associations will qualify as persons engaged in
economic activities unless specifically exempted.
Q.10 Whether a service provider can make payment of Service Tax and file returns before the
grant of registration by the proper officer?
Ans. Yes. A service provider can pay tax and file returns immediately after applying for registration.
Q.11 Is there any penal provision for non-registration?
Ans. Yes. Any offence for non-registration will attract a mandatory penalty under sub section (1) of
section 43.
Q.12 Would a service provided in Sindh by a Foreign Service Provider in Sindh be liable for
payment of tax under the Act?
Ans. Yes, tax is payable on all taxable services rendered in Sindh, whether rendered/provided by a
person resident in Sindh or otherwise.
Q.13 How and where to pay Sales Tax on Services?
Ans. The Sales Tax on Services amount is required to be paid in Form challan in the specified branches
of designated banks. The list of such Banks and Branches list will be on the website of SRB.
Heads of account – B-02382 has been specified for service by the Government under which
payment has to be made. While making the payment of service tax to the credit of Provincial
Government, head of account should be correctly and properly indicated under major and minor
heads and sub-heads to avoid misclassification.
Q.14 Whether service tax deposited by the assessee in non-designated bank will amount to non-
payment of Sales Tax on Services?
Ans. Yes. For payment of service tax, specific Bank branches will receive the tax. If service tax amount is
deposited in a branch of Bank other than nominated Bank, it amounts to non-payment of Service
Tax.
Q.15 What is the date of payment of Sales Tax on Services? Is it the date on which the cheque for
the same is deposited /tendered in the designated Bank or the date on which the amount is
credited?
Ans. The date on which tax is credited shall be the date of payment. If the cheque bounces, it would
mean as if the tax has not been paid and the necessary penal consequences would follow.
Q.16 Is the amount for the Sales Tax on Services charged from the client compulsorily to be
indicated separately in the Bills / Invoices raised on him?
Ans. The service provider has to separately show the billing amount of Sales Tax on Services in the
Invoice / Bill on the basis of taxable value of services rendered, especially so, if he requires to avail
the input credit scheme.
Q.17 Can the Board or authorized Officer ask for more information than what assessee is
submitting to it in the return for an or tax invoice?
Ans. Yes, if required. The Board or authorized officer can always ask for additional information.
Q.18 What are the precautions to be taken by the assessee while depositing the Sales Tax?
Ans. The following measures should be taken by the assessee Service Provider at the time of paying
the Service Tax:
(i) Service Tax should be paid within the time limit laid down in this regard.
(ii) It should be deposited in the specified branches of the banks designated for this purpose
(iii) The major head and sub-head relating to the service provided by the assesee should be
correctly filled in the Challan.
(iv) In case of delay in making payment of service tax in time, the default surcharge is also
required to be paid.
Q.19 Will the existing sales tax law on services under the Sindh Sales Tax Ordinance, 2000 and
Federal Excise Duty under the Federal Excise Act, 2005 be repealed?
Ans. For Sindh, Sales Tax on Services Ordinance 2000 will be repealed. The services being taxed
under FED mode should now be taxed under Sindh Sales Tax Act 2011,to the extent of Sindh's
jurisdiction, except where Sindh has assigned certain services to the Federal Government for
collection of tax.
Q.20 Are the sales charged on services adjustable against sales tax suffered on the acquisition
of goods and services?
Ans. Provision in terms of section 15 and rules made thereunder provide for input adjustment,
where such services are used in providing taxable services, subject to restrictions or adjustment
mechanism provided.
Q.21 What is the point of taxation i.e. is the advance received for services taxable although no
services have yet been rendered? If advance has been received prior to the services rendered
the law requires taxability in evidence of three activities enforcement of the Act, but services
are rendered subsequent to the enforcement of the Act, would such services be taxable?
Ans. Section 17(2) discusses three events, and the one which occurs first determines payablity.
Q.22 Are there any zero rated services?
Ans. No zero rating is provided in services.
Q.23 Is there an exemption threshold?
Ans. Threshold may apply for Registration of persons. Exclusions of certain items of expense from tax
invoices have also been provided in the rules.
Q:24 Are there any exempt services?
Ans. All services in schedule II are taxable.
Q:25 Services often include charges for reimbursement of expenses incurred on behalf of
the recipient (like custom duties and other charges paid by customs agent, out of pocket
expenses incurred on behalf of the clients by professionals , cost of materials paid by an
advertising agent, cost of airline ticket paid by a travel agent etc.), would these be subject
to Sales tax ?
Ans. The expense payable to others acting as an agent of the principal would not generally form
matter of tax. The details would be provided in the rules.
Q:26 Is the Sales Tax based on self assessment?
Ans. Yes.
Q:27 Will a separate return required to be filled for the Provincial Sales tax purposes?
Ans.Yes.
Q:28 How often a Sales Tax audit be conducted ?
Ans. Ordinarily, once in a year.
Q:29 What is appellate procedure?
Ans. Same as in the Federal Fiscal Laws or in Sales Tax Act, 1990 relating to Sales Tax on goods i.e.,
Commissioner of appeals, Tribunal and on question of Law, the High Court.
Q:30 There are many Services which are included in the First Schedule; but there is no mention
in the Second Schedule (taxable services). Are such services liable for Sales Tax?
Ans. The first schedule lists the services in general parlance. Where jurisdiction is applicable.
However, taxable services where tax is to be imposed are shown in the Second Schedule.
Q:31 According to section 3 taxable service is a service listed in the Second Schedule. Further
as per section 8 the tax shall be charged at the rate specified in the schedule in which
Taxable service is listed. Does it mean that a service which is listed in the first schedule but
the rate of tax on that service is s not specified in the second schedule is at present taxable
under the Sindh Sales Tax on Services Act 2011?
Ans. The taxable service, on which tax is chargeable are specifically listed in the second schedule.
Q32: Where we can find list of authorized bank branches?
Ans. The list is displayed on website of SRB.
Q:33 Will we continue to claim the input tax adjustment as per past practice? This question is
based on the fact that section 15 of the Act leaves it on "Government's approval."?
Ans. The registered persons will continue to claim the input tax adjustments. Please see the Rules 21
to 23 Chapter V.
Q:34 How can Federal Excise duty and sales tax be imposed simultaneously on a service?
Ans. Sindh Sales Tax on services stand effective from 1st July, 2011.There shall be no duplication of
taxes.
Q:35 Have the rules under the above Act been promulgated? If yes, from where can we get a
copy?
Ans. Rules have been promulgated and are available on website of Sindh Revenue Board.
Q:36 Are Mudarabas, Musharikas and other financial institution exempt from tax?
Ans. As per Schedule II of the Act, mudarbas, musharika and other financial institutions are liable to
to pay sales tax under the law, however financing provided to such companies by the banking
and non-financial institutions is exempt from sales tax.