LAHORE: Punjab Revenue Authority (PRA) has once again served notices to Google and Facebook to register with the authority under Punjab Sales Tax Services Act 2012, reveals a report by a private media outlet.
The notices were served issued to both the companies’ head offices located in US and Singapore through registered mails. Earlier, during the last fiscal year, the same notices were also served. However, both the companies refused to register with PRA stating that they did not fall under the jurisdiction of the Authority.
One of the companies through its local counsel challenged PRA’s authority to collect tax from it.
Even though both Facebook and Google neither have any office nor employee in Pakistan, but according to Punjab Sales Tax Act 2012, the companies revenue is considered taxable as they have been carrying out economic activity in Pakistan via virtual presence, website and web portal.
According to the report, the government has decided to amend the Punjab Sales Tax Act in budget 2017 and under the new amendment, the government has explained the definition of jurisdiction in order to bring the all services providers in tax net.
Under the new definition, ‘the scope of the expression ‘place of business’ is proposed to be broadened to include persons carrying on economic activity in Punjab through virtual presence, website, web portal, any other form of Ecommerce or through liaison offices.
The PRA will be suspending both the companies services in the jurisdiction of the province in case of non-compliance with the orders.