Federal Board of Revenue (FBR) is moving ahead to resolve the ongoing dispute between Sindh and Punjab over collection of general sales tax (GST) on services under the Section 4 of the Punjab Sales Tax on Services Act 2012, it is learnt. In this regard, the FBR has also finalized the Terms of References (TORs) to resolve the matter amicably so that both the provinces i.e. Sindh and Punjab could collect the sales tax on services in a smooth manner, sources privy to the development told Pakistan Today. Besides, the Punjab government has also assured it would look into the section-IV of the Act i.e. “Application of principles of origin and reverse charge in certain situations”.
The Sindh Revenue Board (SRB) officials have approached the FBR with a request to intervene and resolve the matter as earlier as possible.
Section-4 “Application of principles of origin and reverse charge in certain situations” of Punjab Sales tax on services act 2012, is illegal and unconstitutional. With implementation of this act, the service providers, rendering services in Sindh would feel uncertainty, the sources added. If you (PRA) would look in to the matter and would see our (Sindh’s) reservations the issue would be resolved soon other vice hi-ups of Sindh government would knock the doors of Federal government resulting this would become a national controversial issue, they added.
On that, the official of PRA has assured the official of SRB that PRA itself would look in to the matter and would see the reservations of Sindh government and the matter would be resolved according to constitution, they said.
It may be noted here that Punjab Assembly had approved Punjab sales tax on services act 2012, in which it was stated in Section 4-Application of principles of origin and reverse charge in certain situations: that (1) Where a person is providing taxable services in a province other than the Punjab but the recipient of such services is resident of the Punjab or is otherwise availing such services in the Punjab and has charged tax accordingly, the person providing such services shall pay the amount of tax so charged to the government.
The same section further stated that (2) where the recipient of a taxable service is a person registered under the Act, he shall deduct the whole amount of tax in respect of the service received and pay the same with the government.
(3) Where a person is providing taxable services in more than one province or territory in Pakistan including the Punjab, such person shall be liable to pay tax to the government to the extent the tax is charged from a person resident in the Punjab or from a person who is otherwise availing such services in the Punjab.
Super FBR!
