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Frequently Asked Questions (FAQs)
 
Caution:
The answers are only for general guidance purpose and not for the purpose of any legal reference or citation. A person interested to understand the answers of the relevant questions more comprehensively is advised to consult the relevant text of the Punjab Sales Tax on Services Act, 2012 and rules made thereunder for proper legal understanding of the explanations and clarifications given in the answers.


Q: 1 What is rate of tax?
Q: 2 Is there any change in tax rate?
Q: 3 What is procedure for filing of return?
Q: 4 How to obtain STRN for PRA?
Q: 5 How many services are included in the Act?
Q: 6 Whether every service provider is liable to be registered?
Q: 7 What is effective date of enforcement of the Punjab Sales Tax Act 2012?
Q: 8 How and where to make tax payment?
Q: 9 What is the exemption threshold, if any?
Q: 10 Are there any exempt services?
Q: 11 Is sales tax based on self- assessment?
Q: 12 Is separate return required to be filed for Provincial sales tax on services?
Q: 13 Whether input tax adjustments in cases of cross border services is allowed?
Q: 14 What is the mechanism of input tax adjustment in cases of cross border services?
Q: 15 Whether input tax adjustment in respect of goods used in provision of services is allowed?
Q: 16 What would be the treatment of previous carried forward amount/ refunds available with the FBR?
Q: 17 Who would collect the arrears in respect of tax periods prior to July 2012?
Q: 18 Who would decide the cases If any adjudication is pending in respect of any tax period prior to July 2012.
Q: 19 Can PRA conduct audit and investigation in respect of tax periods prior to July 2012?
Q: 20 What are the contact details of PRA?
Q: 21 If the status of the taxpayer is “not active”, “blocked”, “suspended” etc with FBR; what would be its status with PRA?
Q: 22 If a taxpayer does not get itself registered with PRA in the first or second month of its operation and keeps on filing returns with FBR; what would be the status of those returns and tax paid with them?
Q: 23 How a taxpayer located in Karachi or elsewhere outside Punjab will deposit tax with the Punjab Government?
Q: 24 How PRA will enforce the provisions of section 4?
Q: 25 How zero-rating will be allowed by PRA?
Q: 26 What is the supplementary invoice and when it is issued?
Q: 27 There is no definition of input tax - why?
Q: 28 How much period is allowed for claiming input tax adjustment?
Q: 29 What are the primary duties of the banking companies and NBFIs under the Punjab Sales Tax on Services Law?
Q: 30 Whether the Banks and NBFIs are mandatorily required to keep Provincial head offices?
Q: 31 What is the concept of “territoriality” under VAT on services at sub-national levels?
Q: 32 Whether withholding tax regime under the Punjab Sales Tax on Services system is applicable on telephone bills or on invoices issued by banks, NBFIs, courier or insurance companies?
Q: 33 Whether outside telephone calls terminating in Punjab are liable to sales tax?
Q: 34 What is the place of supply (rendition) of service in case of telephone calls originating and terminating in Punjab?
Q: 35 Whether sales tax is payable on charges on rooming services of telecommunication terminating in Punjab?
Q: 36 What is PRA’s vision about provincial taxation?
Q: 37 What is PRA’s tax coverage? Does PRA foresee inclusion of more services in future?
Q: 38 What is the revenue collection target during the current year? Is it realistic?
Q: 39 Whether a restaurant or marriage/banquet hall is to pay Punjab sales tax on catering services?
Q: 40 Whether Punjab sales tax withheld by registered persons on advertisement services is adjustable?
Q: 41 Whether or not the rentals received by telecom companies from internet service providers for providing space on their cell sites (towers) for installation of boosters or similar equipments for providing broadband internet services, will attract Punjab sales tax?
Q: 42 Is there any change in tax rate after inclusion of restaurants, franchise and advertisements in Punjab sales tax on services regime?
Q: 43 Is there any change in valuation of franchise services for the purposes of Punjab sales tax?
Q: 44 Are the receipts from bakery sales located within a restaurant subject to Punjab sales tax?
Q: 45 What will be the consequence if any taxpayer wrongly or otherwise deposits Punjab sales tax with FBR or any other tax organization in the country?
Q: 46 Are newly registered taxpayers with PRA, liable to file forthcoming returns or for tax period(s) prior to registration as well?
Q: 47 How an advertising agency can comply with Punjab sales tax on services?
Q: 48 Whether an advertising agency will be required to charge sales tax on agency commission, whereupon the media channel has already charged the sales tax?
Q: 49 If advertisement service provider is registered out of Punjab and the service recipient is registered under the Punjab Sales Tax on Services Act, 2012, whether still the recipient will be withholding agent, if yes, to whom he will pay withheld sales tax.
Q: 50 If advertising agency is neither headquartered in Sindh nor in Punjab, rather it is registered in KPK or Baluchistan or ICT, then to which authority, it will pay sales tax on the advertisement services.
Q: 51 Whether or not shop boards prepared and supplied or installed by advertising companies are liable to Punjab sales tax on services?
Q: 52 Who will be responsible to pay Punjab sales tax on franchise services where franchiser is based in Punjab?
Q: 53 Whether the location of oil/gas exploration/production equipments and personnel at a site in Punjab for rendering of services shall constitute a place of business and carrying on of an economic activity as defined in section 6 of the Punjab Sales Tax on Services Act, 2012?
Q: 54 Whether the services such as drilling of oil wells, cementation, wire line services and fracturing etc provided by oil service companies would fall within the scope of services mentioned against item No.28 in the Second Schedule to the Punjab Sales Tax on Services Act, 2012?
Q: 55 Whether any service without PCT heading and without amending the First Schedule to Punjab Sales Tax on Services Act, 2012 and allotment of PCT heading by amending the First Schedule of the Customs Act, 1969 by the Federal government could be brought in the ambit of Punjab sales tax?
Q: 56 Whether the taxable services provided by corporate sector businesses will attract withholding tax under Punjab sales tax on services system?
Q: 52 Who will be responsible to pay Punjab sales tax on franchise services where franchiser is based in Punjab?
Q: 53 Whether the location of oil/gas exploration/production equipments and personnel at a site in Punjab for rendering of services shall constitute a place of business and carrying on of an economic activity as defined in section 6 of the Punjab Sales Tax on Services Act, 2012?
Q: 54 Whether the services such as drilling of oil wells, cementation, wire line services and fracturing etc provided by oil service companies would fall within the scope of services mentioned against item No.28 in the Second Schedule to the Punjab Sales Tax on Services Act, 2012?
Q: 55 Whether any service without PCT heading and without amending the First Schedule to Punjab Sales Tax on Services Act, 2012 and allotment of PCT heading by amending the First Schedule of the Customs Act, 1969 by the Federal government could be brought in the ambit of Punjab sales tax?
Q: 56 Whether the taxable services provided by corporate sector businesses will attract withholding tax under Punjab sales tax on services system?
Q: 57 What is the scope and nature of taxable services with reference to E&P companies provided in respect of mining of mineral, oil and gas including related surveys and allied activities mentioned at entry no 28 of the 2nd Schedule to Punjab Sales Tax on Services Act, 2012?

If you have any further queries, please feel free to call (042) 37-111-632