WHAT IS SALES TAX ?
The sales tax (GST) is applied to the sale and supply of services and goods and on the goods imported within Pakistan. The sales tax is fixed by the Federal Government of Pakistan under The Sales Tax Act, 1990. The Pakistan government has imposed a tax on the sales of selective services and goods. The business owner gets the fixed amount of tax by the purchaser of services/goods and it is therefore forwarded to the government. It is the responsibility of every business owner to pay the tax otherwise the government reserves the right to charge a penalty on the tax evader. In Accordance with the budget 2018 -2019, the tax on supplies imposed on unregistered people is currently applied at the rate of 2%, with addition to the standard tax rate of 17%. By the Finance Bill, the rate of further tax has been proposed to be jumped to 3%.
Sales Tax on the Goods
In Accordance with section 13 of the Sales Tax Act, 1990, the tax is applied on all the goods except those which are excluded from the tax by the government.
Sales Tax on the Services
The tax is apply to people who offer or provide the following services. They must register for sales tax and pay the due taxes.
- The Services which hotels, marriage halls, lawns, clubs, and caterers offer.
- TV commercials and Radio ads. The advertisements sponsored by the Government Agency (i.e. education, health etc.), and messages of public service by UNICEF etc. are exempted from the tax.
- Services offered by customs agencies and shipping companies.
- Logistic and Courier Services.
In addition to the services above, the Federal Excise duty collected by government, as a form of tax on the following excisable services:
- Services provided by telecommunication companies
- Travel by railway or airline (A/C and 1st class)
- Goods to be imported by air except the exempted one’s under section 13 of the Sales Tax Act 1990
THE SALES TAX EXEMPTION
The exclusion of tax is facilitated by the government which is given in Sixth Schedule under The Sales Tax Act 1990. Few of the tax excluded goods are unprocessed agricultural products of Pakistan, medicines, computer software and poultry feeds.
The details of complete tax excluded goods can be collected from the local Tax Office or website
THE SALES TAX REGISTRATION
The registration of tax is compulsory for all of the following:
- All importers must get registered with the tax department
- Distributors, Goods dealers, and wholesalers
- Manufacturers of Product excluding the cottage industry (cottage industry is a sector whose annual turnover remains under Rs.5 million and whose annually utility bills are under rupees six hundred thousand.)
- Those retailers which have value in goods of exceeding 5 million rupees in the tax period over the last 1 year.
- Providers of Service (including hotels/restaurants, shipping, logistics, customs agencies etc.) Manufacturers of zero-rated supplies
FILING OF SALES TAX RETURNS
The taxpayer submits details of financial transaction during a tax period including its Tax liability in a document of declaration, known as Sales Tax return. The Tax return form comprises of the taxpayer declaration for a specific tax period. Furthermore, the details of input and output tax at the prescribed Tax rate must be mentioned in the tax return. The refund claimed or additional input tax is also mentioned in the income tax return if the input tax exceeds the output tax. contact form
Taxpayers can file Tax return in different time slots in form of monthly, annual or quarterly returns as prescribed below.
Sales Tax Return Filing – Monthly
The monthly tax return is filed on the 15th day of the month subsequent to the period when supplies were produced as per the standard procedure. The tax return can be paid to the branches of National Bank of Pakistan.
Sales Tax Return Filing – Yearly:
The tax of yearly sales return can be filed by any public (unlisted or listed) or private company. A company can document the tax return for a financial year by the 30th September in the subsequent fiscal year.
Sales Tax Return Filing – Quarterly:
A commercial importer (who imports taxable goods purpose of trading and don’t use such goods for manufacturing of its own) can document tax return in quarterly basis
Are You Looking for Filing Tax Return or Tax Registration ?
In its endeavor to reach your taxation needs, Taxocrate facilitates a set of complete tax services which include:
- Registration of Tax (obtaining Sales Tax Registration Number – STRN)
- Periodic sales tax returns preparation and filing
- Monthly Tax Statement Preparation
- Managing Tax records and bookkeeping
- Assistance and Advisory in the claim for adjustment of output and input taxes
- Tax exemptions
- Conducting tax audits
- Representing on client’s behalf before sales tax authorities
- Managing tax issues and dispute resolution
- Auditing existing corporate clients systems and facilitate advisory services for preventing penalties and tax assessments
- Assisting in Tax Refunds
- Strategy building for client’s tax cost reduction
At Taxocrate, our professional tax consultants in Karachi keep them up-to-date with the active developments and new regulations in the taxation scheme of the country. Nowadays, it is extremely difficult to be competent about tax laws and reforms to avoid any seriously penalty or business loss. Our professional tax consultants in Karachi will guide you about the taxation system, get yourself registered with the sales tax department and will take the responsibility to document your periodic tax returns.
In addition to tax registration and return filing, we specialize in National Tax Number Registration and Income tax return filing as well. So, Call Us now and speak to our professional tax consultant in Karachi for further guidance and best tax consultancy services.