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Sales tax amnesty scheme jurisdiction extended

ISLAMABAD (August 28 2003) : Extending the jurisdiction of sales tax amnesty scheme SRO 500(I)/2003 to services providers in all four provinces, the Central Board of Revenue (CBR) has announced that the exemption of sales tax and 'additional tax' under SRO 500 would also be available to persons providing or rendering taxable services.

The CBR issued an order here on Wednesday to clarify that the provisions of SRO 500(I)/2003 of June 7, 2003, encompasses service providers.

The exemption of sales tax/additional tax (SRO 500(I)/2003) could be availed by service providers and services brought under the ST net through provincial legislation.

These include hotels, marriage halls, lawns, clubs and caterers, advertisement on television and radio, services provided or rendered by persons authorised to transact business on behalf of others (customs agents, ship chandlers, stevedores, courier services, services provided or rendered for personal care by beauty parlours, beauty clinics, slimming clinic and services provided or rendered by laundries and dry cleaners).

Details show that four categories of persons have been given exemption from the payment of additional tax subject to fulfilment of conditions stipulated in the SRO 500(I)/2003.

However, exemption of additional tax is restricted to taxable supplies only.

Various queries have been received about whether the amnesty scheme is applicable to taxable services also.

The CBR examined the issue in the light of recommendations made by concerned quarters.

The CBR observed that sales tax on services was levied through the promulgation of the Punjab Sales Tax Ordinance, 2000 (II of 2000), the North-West Frontier Province Sales Tax Ordinance, 2000 (III of 2000), the Sindh Sales Tax Ordinance, 2000 (VIII of 2000), the Balochistan Sales Tax Ordinance, 2000 (I of 2000) and the Islamabad Capital Territory (Tax on Services) Ordinance, 2001 (XLII of 2001).

By virtue of section 3(3) of the said Ordinances, all provisions of Sales Tax Act, 1990 rules, notifications, orders and instructions issued thereunder shall, mutatis mutandis, apply to the collection and payment of tax including penalties and prosecution and all other allied and ancillary matters.

Therefore, it is clarified that the provisions of SRO 500(I)/2003, dated 07.06.2003, will also be applicable to the persons providing and rendering taxable services.

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