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Tuesday March 19, 2024

Sindh urges FBR to save taxpayers from double taxation

ISLAMABAD: Sindh Revenue Board (SRB) has made official communication with Federal Board of Revenue (FBR) for demanding to resolve all major lingering issues to avoid double taxation on taxpayers.The SRB has asked the FBR to abolish services from Federal Excise Duty (FED), federal GST on the food services provided or

By our correspondents
November 25, 2015
ISLAMABAD: Sindh Revenue Board (SRB) has made official communication with Federal Board of Revenue (FBR) for demanding to resolve all major lingering issues to avoid double taxation on taxpayers.
The SRB has asked the FBR to abolish services from Federal Excise Duty (FED), federal GST on the food services provided or rendered by restaurants and provincial sales tax on the services of toll manufacturing.
Advisor to PM on Revenues Haroon Akhtar Khan admitted on Tuesday that there were certain issues that needed to be resolved amicably among federal and provincial authorities to avoid double or multiple taxes.
The official communication of SRB states that the issue of FED on services was raised several times ever since 18th Constitutional Amendment (specifically in relation to item No. 49 of Part-I of the Fourth Schedule to the Constitution) and the 7th NFC Award were made in 2010. In consequence to which the Finance Division (NFC Secretariat), Islamabad, had issued letter No. F-5.(5)- NFC/2010-56 dated 26th March, 2010, requiring FBR to propose amendments in the Federal Excise Act enabling provinces to impose sales tax on all services, except terminal taxes on goods or passengers carried by railway, sea or air, taxes on their fares and freights through the Finance Bill, 2010.
After promulgation of the Sindh Sales Tax on Services Act, 2011 (the Sindh Act No.XII of 2011), FBR issued a press release on 1st July, 2011 on its website informing the general body of taxpayers that FED on such of the services as are levied to provincial sales tax has been withdrawn. Sindh Government/ SRB vehemently and continuously pursued this matter of exemption notification with FBR but nothing has been heard from FBR after letters after letters.
Although FED on telecommunication services (levied on provincial sales tax) was removed vide the amendment made in 2014 (through the Federal Finance Act, 2014) in S. No.6 of the First Schedule to the Federal Excise Act, 2005, similar necessary action in relation to other services is still pending with FBR, causing unrest and anxiety for the taxpayers.
Even after recognising this outstanding issue, no action was taken by FBR to issue the requisite exemption notification. SRB reiterates its request that FBR may issue the requisite exemption notification, already vetted by the Law & Justice Division, Islamabad urgently, SRB said.
As regards Sindh sales tax on the services of toll manufacturing, attention of FBR is invited to paragraph 3(v) of FBR’s letter (C.No.1/23-STB/2010(pt)/72589-R dated 21.5.2014) and also to paragraph “3-Toll Manufacturing” of the minutes of the meeting circulated under FBR’s letter (C.No.1(1)Chief(Automation&ST/2014.164838-R dated 4.12.2014. SRB reiterates its contention that the issues of (i) levy of FED on services (levied to provincial sales tax); (ii) federal sales tax on the food services provided or rendered by restaurants, and (iii) provincial sales tax on the services of toll manufacturing should be resolved immediately in a manner that the taxpayers are not subjected to any threat of double or multiple taxation. For this, SRB is willing to meet FBR at FBR’s earliest convenience.
As regards the minutes stating that Sindh has imposed tax on overseas Pakistanis (reference minutes of the meeting held on 14.9.2015) and that Sindh may reconsider and abolish terminal tax on airport for international travel (reference para 11.1 of the minutes of the said meeting), no such tax has been imposed by the Sindh Government. It is requested that Finance Division/ FBR Islamabad may intimate the provisions of the Sindh Sales tax on Services Act, 2011, which have been interrupted to levy the taxes on overseas Pakistanis and/or on international air travel.