Is Sales Tax Applicable on Services?

[Hasaan]

for services, sales tax is levied through provincial sales tax ordinances,

for example, in case of punjab http//punjablaws.gov.pk/laws/421.html ( link to Pubjab sales tax ordinance 2000)

Here are the first two subsections of this ordianance
Subject to the provisions of this Ordinance, there shall be charged, levied and paid a tax on services known as sales tax on services at the rate of [sixteen percent] of the value of the taxable services rendered or provided in the Province of the Punjab.

(2) The tax shall be charged and levied on the services specified in the Schedule to this Ordinance, in the same manner and at the same time, as if it were a sales tax leviable under sections 3, 3A or 3AA, as the case may be, of the Sales Tax Act, 1990.

Under the schedule u have the following services on which u have to pay sales tax @ 16%
1. Services provided or rendered by hotels, [3] clubs, and caterers.–

(a) Services provided or rendered by hotels;

[5][(b)] Services provided or rendered by clubs; and

[6][(c)] Services provided or rendered by caterers.

2. Advertisements on T.V. and radio excluding advertisements.–

(i) if sponsored by a Government Agency for health education;

(ii) if sponsored by Population Welfare Division relating to Sathi educational promotion campaign [7][financed out of funds provided under a grant-in-aid agreement]; and

(iii) public service messages if telecast on television by World Wildlife Funds for Nature and UNICEF.

3. Services provided or rendered by persons authorized to transact business on behalf of others.–

(a) customs agents;

(b) ship chandlers; and

(c) stevedores.

4. Courier services.


Any service rendered other than this in the province of punjab is not chargeable to sales tax. only these services are chargeable to tax.

Services may change from province to province on which sales tax is levied by the respective province