PRA brought several small fish under tax net in FY2014-15

Punjab Revenue Authority Member Operations Raza Munawar on Monday said that with the start of Financial Year 2014-15, the Punjab government brought several new services under the Punjab sales tax net at the rate of 16 per cent.

Most of these services related to largely unregulated and undocumented sectors concerning small businesses. All these services were brought under the tax net for the first time, therefore, their compliance on field-entailed resistance from trade bodies and concerned business associations, at time leading to occasional street agitation.

The Punjab Revenue Authority (PRA) held detailed meetings with a number of these associations and respective trade bodies from time to time.  These included the representatives of dry cleaners, gyms, property dealers (real estate agents), tour operations and travel agents, automobile dealers, constructors association etc. The main demand of these representative associations and trade bodies had been for reduction of Punjab sales tax rate to alleviate hardships on small businesses.

PRA examined the demand of the representative associations and advised the government that a reduced rate scheme (without any input adjustment) may be viable for improving compliance in otherwise unregulated sectors.

He further stated that after the necessary approval by the Punjab chief minister, the Finance Department has today notified reduced rates ranging from two per cent to 10 per cent for services provided by standalone non-authorised segment of laundries and dry cleaners, car/automobile dealers, auto-workshops and by workshops for electric or electronic equipments or appliances, gyms and physical fitness, construction services (with aggregate value of less than 50 million).

Moreover, across-the-board reduced rate has been made available for franchise service, services provided by accountants, auditors, actuaries, tax consultants, company secretaries, receivers, liquidators, auctioneers and corporate law consultants, tour and travel agents, and services provided to the textile or leather sectors in respect of manufacturing or processing on toll or job basis (against processing on conversion charges).