KARACHI: The Punjab Revenue Authority (PRA) has directed importers based in the province to deduct sales tax from the service providers on the goods cleared in Sindh, a senior office-bearer of the Karachi Customs Agents Association (KCAA), said on Friday.
Faisal Mushtaq, general secretary of the KCAA, said that the PRA has directed the Punjab importers to deposit sales tax at 16 percent on services provided by the customs agents in Karachi. The PRA has also directed the importers to claim the deducted amount as withholding tax from the Sindh Revenue Board (SRB) for which the PRA will provide a certificate.
Facing such difficult situation, the KCAA has requested the Sindh Revenue Board to clarify the situation because it will amount to double taxation, Mushtaq said. Meanwhile, the Sindh Revenue Board has refused to such withholding tax and said that the Sindh government has the right to collect tax on services provided within the provincial territory. In an official note to the KCAA, the Sindh Revenue Board has said that the services provided or rendered by the customs agents and at any customs station, including customs port, airport, dry port, terminal, warehouse, etc, in Sindh is liable to sales tax at 16 percent and the tax involved has to be deposited in the Sindh government’s kitty.
It also said that irrespective of the location of the services recipient client (importer) of the customs agent, the service provider is required to e-registered with the Sindh Revenue Board and is also required to e-deposit the full amount of Sindh sales tax in the provincial government’s head of account.
Regarding withholding of sales tax, the official note said that the amounts of Sindh sales tax cannot be withheld by any person except in a manner prescribed under the Sindh Sales Tax Special Procedure (Withholding) Rules, 2011. “Otherwise, the liability to pay the amounts of Sindh sales tax in Sindh government’s head of account shall remain that of service provider, ie, the customs agent, in this case,” it said.
After 18th Amendment, the provinces were given autonomy for revenue collection on services rendered within their territories. Mushtaq said that after setting up the provincial revenue authorities and in the presence of federal revenue collecting agency, the taxpayers are facing difficulties due to claims of each authority. He suggested that all the authorities should settle their matters to facilitate taxpayers.
Mushtaq said that the customs agents are also receiving notices from the FBR, directing them to file sales tax returns, which was already been submitted to the Sindh Revenue Board. He said that it was duplication of work and wastage of time and if the FBR required such information, then it should directly contact the Sindh Revenue Board because both of them have online access to data.
Source: The NEWS