The Sindh Revenue Board (SRB) on Wednesday clarified that a news item appearing in a section of press, stating that banks have been advised to postpone their payment for Sales Tax on Services for the month of July, is not true and such advice is ‘contrary to laws and rules’.
He stated that the last date for payment of ‘Sindh Sales Tax on Services’ for July is August 25 and all service providers including banking and insurance companies, telecommunication companies among others are legally required to pay their tax, failing which they would be violating the provisions of Sindh Sales Tax on Services Act, 2011.
“Penal actions as per law would be taken against the service providers violating the provincial rules,” he added.
On the allocation of powers regarding five services to the centre, the SRB spokesman made it clear that the matter is under consideration with the Sindh government and no decision has been reached so far.
The spokesman said that any decision if taken for delegation of powers, shall be applicable from the month of August 2011 and due tax payments for July shall not be affected by the decision and it will have to be paid directly to the provincial government by all service providers.
The official reminded that as per decisions of the 7th National Finance Commission Award and laws enacted by the Sindh Government after unanimous passage of bill approved by the provincial legislature, the tax on services has become a provincial domain as per Article 142 (c) and Entry 49 of federal legislative list of the constitution.
“The Federal Excise Duty cannot be applicable on sale and purchase of services in a provincial jurisdiction and the service providers are advised to follow the spirit of the constitution and adhere to provincial laws in letter and spirit by paying the sales tax on services to the Sindh government,” the spokesman concluded.
