Sales Tax Relief by Punjab Revenue Authority

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Through the Finance Act, 2020, the Government of the Punjab reduced the rate of Punjab Sales Tax on Services from 16% to 5% on more than twenty services. Punjab Revenue Authority also reduced the rate on payments made through credit / debit cards to restaurants and beauty parlours to 5%. Government also provided a big relief to Medical profession by reducing the sales tax rate to Zero Percent.

HOTELS, MOTELS, GUEST HOUSES, MARRIAGE HALLS, CLUBS CATERING SERVICES

Hotels, motels and guest houses. 9801.1000

Tax Rate: Five percent without input tax adjustment for noncorporate, nonfranchise, nonchain businesses with less than 20 rooms; and Sixteen percent for others.

Marriage halls and lawns (by whatever name called) 9801.3000 including pandal and shamiana services. Tax Rate: Five percent without input tax adjustment.

Clubs including race clubs and their membership services 9801.4000 including services, facilities or advantages, for a subscription or any other amount, to their members. Tax Rate: Sixteen percent.

Catering services (including all ancillary/allied 9801.5000 services such as floral or other decoration, furnishing of space whether or not involving rental of equipment. Tax Rate: Five percent without input tax adjustment.

RESTAURANTS

Services provided by restaurants [including cafes, food (including ice-cream) parlors, coffee houses, coffee shops, deras, food huts, eateries, resorts and similar cooked, prepared or ready-to-eat food service outlets etc 9801.2000  & 9801.9000.

Tax Rate: Five percent without input tax adjustment where payment against services is received through debit or credit cards; and Sixteen percent for others.

Franchise service relating to education services

Franchise service including intellectual property rights services and licensing services. [9823.0000, 9839.0000.

Tax Rate: Five percent without input tax adjustment for services relating to educational institutions; and Sixteen percent for others.

Construction services

Construction services and services provided by contractors of building.

Tax Rate: Five percent without input tax credit/adjustment in respect of Government civil works and sixteen percent with input tax credit/adjustment for others.

Explanation- Notwithstanding the rate of 5% fixed in column 4 of second schedule, the following further reduced rates shall be applicable:

a)- one per cent for all services specified at S.No.14 without input tax credit or adjustment to the extent of Government civil works including those of cantonment boards involved in the ongoing development schemes and projects launched during Financial Year 2016-17 and funded under the Annual Development Plan of the Punjab Government or funded through foreign loans where the negotiations were finalized after 1st of July 2016 or funded under Public Sector Development Program of the Federal Government or funded by the Cantonment Boards; and

b)- zero per cent for all services specified at S.No.14 without input tax credit/adjustment to the extent of Government civil works including those of cantonment boards involved in the ongoing development schemes and projects launched prior to Financial Year 2016-17 and funded under the Annual Development Plan of the Punjab Government or funded through foreign loans where the negotiations were finalized as on 1st of July 2016 or funded under Public Sector Development Program of the Federal Government or funded by Cantonment Boards.

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Beauty parlors, salons, clinics, sliming clinics, spas

Services provided for personal care by beauty parlors, salons, clinics, sliming clinics, spas (including saunas, Turkish baths and Jacuzzi) and similar other establishments.

EXCLUDING: Services provided in a parlour, salon or clinic where the facility of air-conditioning is not installed or is not available in the premises on any day of the financial year.

Tax Rate: Five percent Without input tax adjustment where payment against Services is received through debit or credit cards; and Sixteen percent for others.

Information Technology enabled services and insurance claim Processing

Information technology-enabled or information technology based services including software development,     software  customization, software maintenance, system support, system assembly, system integration, system designing and architecture, system analysis, system development, system operation, system maintenance, system up-gradation and modification, data warehousing or management, data entry operations, data migration or transfer, system security or protection, web designing, web development, web hosting, network  designing, services relating to enterprise resource or management planning (including marketing of products), development and sale of smart phone applications or games, graphics designing, medical transcription, remote monitoring, telemedicine, insurance claim Processing, online retrieval and database access or retrieval service.

Tax Rate: Five percent without input tax adjustment

Tour Operators & Travel agents

Services provided by tour operators and travel agents including all their allied services or facilities (other than Hajj and Umrah). Tax Rate: Five percent without input tax Adjustment

Manpower recruitment agent

Manpower recruitment agent including labour and manpower supplies. Tax Rate: (a) Five percent without input tax adjustment for services where the value of service is fixed by the Bureau of Emigration and Overseas Employment; and (b) Sixteen percent for others.

Property dealers and realtors

Services provided by property dealers and realtors. Tax Rate: Five percent without input tax adjustment.

Rent-a-car

Services provided in respect of rent-a-car  (including renting of all categories of vehicles meant for transportation of persons). Tax Rate: (a) Five percent without input tax adjustment for services provided to end consumers; and (b) Sixteen percent for others.

Car / automobile dealers

Services provided by car/automobile dealers. Tax Rate: (a) Sixteen percent for services provided by companies or authorized dealers; and (b) Five percent without input tax adjustment, for others.

Processing on toll

Services provided in respect of manufacturing or processing on toll or job basis (against processing on conversion charges) including industrial and commercial packaging services and similar outsourcing of industrial or commercial processes. Tax Rate: Five percent without input tax adjustment

Commission agents

Brokerage (other than stock) and indenting services including commission agents, under-writers and auctioneers. Tax Rate: (a) Five percent without input tax adjustment for services provided in respect of agricultural produce; and (b) Sixteen percent for others.

Health care, gym, physical fitness

Services provided in specified fields such as health care, gym, physical fitness, indoor sports, games, amusement parks, arcades and other recreation facilities, and body or sauna massage etc. Tax Rate: Five percent without input tax adjustment

Cable TV operators

Services provided by cable TV operators. Tax Rate: Five percent without input tax adjustment

Accountants, auditors, actuaries, tax consultants

Services provided by accountants (including practicing chartered or cost accountants), auditors, actuaries, tax consultants (by whatever name called), practicing company secretaries, receivers, liquidators, auctioneers and corporate law consultants, whether individual or otherwise. Tax Rate: (a) Five percent without input tax adjustment for services relating to accountancy, audit, tax or corporate law consultancy; and (b) Sixteen percent for others.

Sales-Tax-Rates-PRA
Sales Tax Reduced Rates by PRA

By Air domestic and international travel

Facilities for travel originating from Punjab by Air for domestic and international travel. EXCLUDING: Air travel services provided to Hajj or Umrah passengers, diplomats and supernumerary crew. Tax Rate: Five percent without input tax adjustment.

Photographers / film-makers

Services provided by photography studios and event or occasion photographers/film-makers. EXCLUDING: Non-corporate (individual) photographers operating from small road-side shops declared as such by the Authority. Tax Rate: Five percent without input tax adjustment.

Skin and laser clinics

Services provided by skin and laser clinics, cosmetic and plastic surgeons and hair transplant services including consultation services. Excluding: Services provided to acid or burn victims. Tax Rate: Five percent without input tax adjustment.

Parking services

Parking services Tax Rate: Five percent without input tax adjustment.

Treatment of textile, leather

Services in respect of treatment of textile, leather but not limited to Dyeing services, Edging and cutting, cloth treating, water proofing, Embroidery, Engraving, Fabric bleaching, Knitting, Leather staining, Leather working, Pre-shrinking, Colour separation services, pattern printing and shoe making services. Tax Rate: Five percent without input tax adjustment.

Others Services

Apartment house management, real estate management and services of rent collection. Tax Rate: Five percent without input tax adjustment.

Medical consultation/ visit fee exceeding Rs.1,500 per consultation/ visit of doctors, medical practitioners and medical specialists. (ii) Bed/ room charges of hospitals exceeding Rs.6,000/- per day per bed / room. Tax Rate: Zero percent without input tax adjustment.

Ride-Hailing Services. Tax Rate: Four percent without input tax adjustment.

Source | Punjab Revenue Authority | PRA | Sales Tax Rates | Reduced Rate of Sales Tax |

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