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FBR extends scope of sales tax on IT Services and IT Enabled Services

The Federal Board of Revenue (FBR) has extended scope “IT Services” and “IT Enabled Services” to collect 16% sales tax from service providers under the jurisdiction of the Islamabad Capital Territory (ICT).

The FBR issued SRO 77 (1) 2021 to amend SRO 495 (1) / 2016 on July 4, 2016 regarding the imposition of sales tax on services provided in Islamabad Capital Territory (ICT).

Under the Islamabad Capital Territory (Tax on Services) Ordinance, 2001, 16% sales tax is levied on services provided by software or IT based system development consultants.

SRO 77 (1) 2021

Under SRO 77 (1) 2021, the FBR will now also levy sales tax on “IT services” including software development, software maintenance, system integration, web design, web development, web hosting and networking. Work design included. And “IT-enabled services” include inbound or outbound call centers, medical transcripts, remote monitoring, graphics design, accounting services, HR services, telemedicine centers, data entry operations, locally produced television programs and insurance claims. Processing included.

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A d v e r t i s e m e n t

S.R.O. 77 (1)12021 – In exercise of the powers conferred by clause (a) of sub-section (2A) of section 3 of the Islamabad Capital Territory (Tax on Services) Ordinance, 2001 (XL II of 2001), read with clause (b) of sub-section (2) of section 3 of the Sales Tax Act, 1990, the Federal Government is pleased to direct that the following further amendments shall be made in its
Notification No. S.R.O. 495(1)/2016, dated the 4th July, 2016, namely:
In the aforesaid Notification, in the Table, in column (1), against S.No. 11, after the existing entry in column (2), the following explanation shall be added, namely:-


“Explanation.- For the purpose of this entry —
“IT services” include software development, software maintenance,
system integration, web design, web development, web hosting and network
design; and


“IT enabled services” include inbound or outbound call centres,
medical transcription, remote monitoring, graphics design, accounting
services, HR services, telemedicine centers, data entry operations, locally
produced television programs] and insurance claims processing.”.

S.R.O. 77 (1)12021 | Sales Tax SRO |

S.R.O. 77 (1)12021 Dated: 21″ January, 2021

Source | Federal Board of Revenue | FBR | SRO | Sales Tax on Services | Islamabad Capital Territory | IT Services | IT Enabled Services |

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