ISLAMABAD (March 06 2004): The government is examining a proposal to introduce 'concessional rate' of general sales tax (GST) for new service providers, including professionals, in the Budget 2004-05.
When asked about the viability of concessional GST rate, sources said here on Friday that one of the arguments is to introduce below 15 percent tax rate for new service providers.
This would not only help in avoiding reaction from the professionals, but would effect gradual increase in revenue, whereas sudden slapping of 15 percent GST may have negative impact.
In this regard, nothing is final as the 'working group' on extension of GST net is presently focusing on two main issues.
First, identification of new services, and second increase in revenue from the existing services liable to sales tax.
<br> To discuss GST related issues, the third meeting of the working group will be convened on March 9 in the Ministry of Finance to be attended by all four provinces.
The Central Board of Revenue (CBR), in consultation with the provinces, is working on a list of services to be brought under the sales tax net. In this regard, the CBR has also asked the collectorates of sales tax to identify new services to be brought under the sales tax net.
For this purpose, the tax authorities are actively engaged in the finalisation of list containing new services for broadening the tax base.
The services under consideration for brining them under the GST net are: Advertisement in print media; stock brokers; air travel agents; services provided or rendered by advocates; services provided by security companies; shipping lines; shipping agents; cable services; broadcasting companies; cargo handling services; service stations; interior decoration service providers (interior decorators); fashion designers; services providers engaged in hire, purchase or sale of moveable or immovable property including property dealers, car dealers, rent estate agents and commission agents; banking and financial services; financial leasing services; leasing of equipment; credit card services merchant banking services; securities and foreign exchange brokerages; asset management; services provided or rendered by construction contractors, architects, town planners, property developers and promoters, real estate, machinery erectors and service and maintenance producers; services provided by chartered accountants, cost accountants, scientific and technical consultant, actuary and tax consultant; port services; freight forwarding agents; indenting agents; commission agents/brokers; manpower recruitment agency; rail travel agents; gyms/health clubs; storage and warehousing; market research agency and securities; storage and warehousing; clearing and forwarding; advisory and auxiliary financial services including investment and portfolio research and advice, advice on corporate restructuring and strategy and provision and transfer of information and data processing.