ISLAMABAD (June 12 2005): The Central Board of Revenue (CBR) has issued a list of over 100 services, including professionals, in the new Pakistan Customs Tariff (PCT) 2005-06 for identification and classification of all possible service providers operating in the country.
In case the CBR intends to impose federal excise duty (FED) on these services, the CBR has two options.
First, the federal government has to promulgate an ordinance for levying FED on any of these services during a financial year. The Ordinance could be promulgated without going through the time consuming procedure of acquiring province's viewpoint.
Secondly, if the CBR wants to bring these services into the tax net in any of the coming budgets, it has to amend the Federal Excise Act. It is not necessary that CBR will bring professionals into the tax net, but the powers of the Federal Excise Act are available to the tax authorities for enforcement, if necessary.
Official sources told Business Recorder on Saturday that the list of all service providers has been compiled for two reasons. First, the CBR has issued Pakistan Customs Tariff (PCT) headings to all the services including professionals to bring them inline with the best international practices where both the goods and services have been given specific PCT headings.
Chapter 98 of the PCT 2005-06 contains a list of services having separate headings classifying them in the separate heads for future reference.
Secondly, the CBR is also empowered to levy federal excise duty (FED) on these service providers under the Federal Excise Act, 2005, without consulting provinces, if required.
Officials said that Chapter 98 of PCT 2005-06 contains names of all services operating in the country. These services, including stockbrokers, have been allocated separate PCT headings to bring them in line with the international harmonised system (HS) codes. This 'negative schedule' (Chapter 98 of the PCT) encompasses services on which presently federal excise duty is not applicable.
Officials pointed out that services specified only in the Table-II of the First Schedule of Federal Excise Act, 2005 are liable to FED. On the other hand, the list specified in the Chapter 98 is more elaborate, which may be used for levying FED as the concerned SRO.333 dealing with services will be rescinded from fiscal 2005-06.
Officials added that it is necessary that Chapter 98 has to be read in line with the Table-II of the First Schedule of Federal Excise Act, 2005.
Following are the names of services included in Chapter 98 of the PCT 2005-06: Hotels, restaurants, marriage halls, lawns, clubs and caterers, hotels, restaurants, marriage halls and lawns, clubs, caterers, suppliers of food and drinks.
Ancillary services provided or rendered by hotels, restaurants, marriage halls, lawns, caterers, messes and hostels.
Advertisements services sector included advertisement on T.V. advertisement on radio, advertisement on closed circuit T.V. advertisement in newspapers and periodicals, advertisement on cable T.V network, travel by air, travel by train and other.
Services provided or rendered for inland carriage of goods including carriage of goods by air, carriage of goods by train
Services provided or rendered by persons authorised to transact business on behalf of others ie shipping agents, stevedores, freight forwarding agents, customs agents, travel agents, tour operators, recruiting agents, advertising agents and ship chandlers.
Services provided or rendered in matters of hire, purchase or sale of moveable or immovable goods or property. Property dealers, car/automobile dealers, dealers of second hand goods other than automobiles.
Services provided or rendered by property developers and promoters and courier services.
Services provided or rendered by persons engaged in contractual execution of work or furnishing supplies. Services provided or rendered for personal care by beauty parlours/clinics, slimming clinics and others. Services provided or rendered by laundries, dry cleaners.
Services provided or rendered by persons engaged in telecommunication work pertaining to telephone, telegraph, telex, telefax and alike, telephone, telegraph, telex, telefax and others.
Services provided or rendered by banking companies, insurance companies, co-operative financing societies, modarabas, musharikas, leasing companies, other non-banking financial institutions and other persons dealing in any such services.
Services provided or rendered in respect of insurance. Services provided or rendered in respect of advances and loans. Services provided or rendered in respect of leasing and financial leasing.
Commodity or equipment leasing, hire-purchase leasing. Services provided or rendered in respect of musharika financing and services provided or rendered in relation to Letters of credit. Guarantees. Brokerage and fign exchange dealings.
Services provided or rendered by architects, town planners, contractors, property developers or promoters, interior decorators, architects or town planners, contractors of building (including water supply, gas supply and sanitary works), roads and bridges, electrical and mechanical works (including air conditioning), horticultural works, multi-discipline works (including turn-key projects) and similar other works. Property developers or promoters. Landscape designers.
Services provided or rendered by professionals and consultants etc medical practitioners and consultants. Legal practitioners and consultants, accountants and auditors, management consultants, technical, scientific, engineering consultants. Software or IT based system development consultants and other consultants.
Services provided or rendered by pathological laboratories. Services provided or rendered by medical diagnostic laboratories including X-Rays, CT Scan, M.R. Imaging etc. Scientific laboratories. Mechanical laboratories, chemical laboratories, electrical or electronic laboratories.
Services provided or rendered by specialised agencies, security agencies, credit rating agencies, market research agencies and other such agencies
Services provided or rendered by specified persons or businesses, stockbrokers, underwriters, indenters, commission agents, packers, money exchangers and rent-a-car services.
Prize bond dealers, surveyors, designers, outdoor photographers, and painters.
Services provided or rendered by specialised workshops or undertakings. Auto-workshops. Workshops for industrial machinery construction and earth-moving machinery or other special purpose machinery etc. Workshops for electric or electronic equipment's or appliances etc including computer hardware. Car washing or similar service stations.
Services provided or rendered in specified fields. Healthcare centres, gyms or physical fitness centres etc. Indoor sports and games centres. Babycare centres. Body massage centres. Pedicare centres. Similar other centres.
Services provided or rendered for specified purposes. Fumigation services. Maintenance or cleaning services, janitorial services, dredging or desilting services and other similar services.