PAA clarifies GST evasion by ‘Advertising’ agencies

KARACHI: This refers to news items circulating in a section of media that certain advertising agencies are involved in evasion of General Sales Tax payable to the provincial or federal tax authorities.

The Pakistan Advertising Association (PAA), in its capacity of being the representative body of the advertising agencies, takes this opportunity to clarify that the onus of General Sales Tax collection and its payment where government business is involved, falls on the relevant department.

Advertising Agencies, being merely a service provider, are not responsible for depositing General Sales Tax in the government exchequer, since, as a general practice, the government departments, make payments to the agencies after GST deduction. The agencies, after getting paid by the government department(s) as per government rates, keep their own commission and forward the rest of the amount to media outlets or the vendors, as the case may be. In such cases, therefore, the question of tax evasion by agencies does not arise.

As a representative of all advertising agencies, the PAA firmly stands for honest business practices, while at the same time calling upon the tax authorities concerned to stop forthwith the harassment of its member agencies on the pretext of GST collection and recoveries.**