THE PUNJAB SALES TAX ON SERVICES ACT 2012

(Act XLII of 2012)

C O N T E N T S

 

Section                                Heading

 

Chapter I

Preliminary

        1.           Short title, extent and commencement.

        2.           Definitions.

        3.           Taxable service.

        4.           Application of principles of origin and reverse charge in certain situations.

        5.           Amendment in Second Schedule.

        6.           Economic activity.

        7.           Value of a taxable service.

        8.           Open market price.

        9.           Provision of services over a period of time.

 

Chapter II

Scope of Tax

       10.          Scope of tax and allied matters.

       11.          Person liable to pay tax.

       12.          Exemptions.

       13.          Effect of change in the rate of tax.

       14.          Special procedure and tax withholding provisions.

       15.          Delegation of power to collect, administer and enforce tax on certain services.

       16.          Adjustments.

 

Chapter III

Payment and Collection of Tax

on Taxable Services

       17.          Collection of excess tax.

       18.          Time, manner and mode of payment.

       19.          Joint and several liability of registered persons where tax unpaid.

       20.          Sales of taxable activity or transfer of ownership.

       21.          Estate of deceased person.

       22.          Estate in bankruptcy.

       23.          Liability for payment of tax in case of private companies or business enterprises.

       24.          Assessment of tax.

 

Chapter IV

Registration

       25.          Registration.

       26.          Voluntary registration.

       27.          Compulsory registration.

       28.          Suspension of registration.

       29.          De-registration.

     29A.        Restoration of registrations.

 

 

Chapter V

Book Keeping and Audit Proceedings

       30.          Issuance of tax invoices.

       31.          Records.

       32.          Retention and production of records and documents.

       33.          Audit proceedings.

       34.          Special audit by chartered accountants or cost accountants.

 

Chapter VI

Returns

       35.          Return.

       36.          Special returns.

       37.          Final return.

       38.          Return deemed to have been made.

 

Chapter VII

Appointment of Authorities

and their Powers

       39.          Appointment of authorities.

       40.          Powers.

       41.          Distribution of powers.

       42.          Special Judges.

       43.          Cognizance of offence.

       44.          Application of the Code of Criminal Procedure, 1898.

       45.          Exclusive jurisdiction of Special Judge.

       46.          Place of sitting.

       47.          Persons who may conduct prosecution.

 

Chapter VIII

Offences and Penalties

       48.          Offences and penalties.

       49.          Default surcharge.

       50.          Exemption from penalty and default surcharge.

       51.          Compounding of offences.

       52.          Recovery of tax not levied or short-levied.

       53.          Power to summon persons to give evidence and produce documents.

       54.          Power to arrest and prosecute.

       55.          Procedure to be followed on arrest of a person.

       56.          Authorized officers to have access to premises, stocks, accounts and records.

       57.          Obligation to produce documents and provide information.

       58.          Searches under warrants.

       59.          Posting of an officer to business premises.

       60.          Powers of adjudication.

       61.          Revision by the Commissioner.

       62.          Revision by the Authority.

 

 

 

 

Chapter IX

Appeals

       63.          Appeals.

       64.          Procedure in appeal.

       65.          Decision in appeal.

       66.          Appeal to the Appellate Tribunal.

       67.          Disposal of appeals by the Appellate Tribunal.

       68.          Deposit of the tax demand while appeal is pending.

       69.          Alternate dispute resolution.

 

Chapter X

Recovery of Arrears

       70.          Recovery of arrears of tax.

 

Chapter XI

Agents, Representatives

and E-intermediaries

       71.          Agent.

       72.          Liability and obligations of agents.

       73.          Liability of the registered person for the acts of his agent.

       74.          Appearance by authorized representative.

       75.          E-intermediaries to be appointed.

 

Chapter XII

General Administration

       76.          Power to make rules.

       77.          Computerized system.

       78.          Service of orders and decisions.

       79.          Correction of clerical errors.

       80.          Issuance of duplicate of the tax documents.

       81.          Power to issue orders, instructions and directions.

       82.          Officers of the Authority to follow orders.

 

Chapter XIII

Miscellaneous

       83.          Computation of limitation period.

       84.          Condonation of time-limit.

       85.          Bar of suits, prosecution and other legal proceedings.

       86.          Removal of difficulties.

       87.          Repeal and savings.

 

First Schedule

Second Schedule

 

 


[1]THE PUNJAB SALES TAX ON SERVICES ACT 2012

(Act XLII of 2012)

[27 June 2012]

An Act to provide for the levy of a tax on services provided, rendered, initiated, received, originated, executed or consumed in the Punjab.

 

Preamble.– Whereas it is expedient to provide for the levy of a tax on services provided, rendered, initiated, originated, executed, received or consumed in the Punjab and to deal with ancillary matters;

      It is enacted as follows:-

 

Chapter I

Preliminary

1.   Short title, extent and commencement.– (1) This Act may be cited as the Punjab Sales Tax on Services Act 2012.

      (2)  It shall extend to the whole of the Punjab.

      (3)  This Act shall come into force on and from such date as the Government may, by a notification in the official Gazette, specify.

      (4)  Notwithstanding sub-section (3), the Government may, by notification in the official Gazette, specify services or class or classes of services in respect of which tax shall be collected and paid with effect from the date subsequent to and different from the date of the commencement of this Act.

 

2.   Definitions.– In this Act–

      (1)  “Appellate Tribunal” means the Appellate Tribunal established under any law and notified by the Government as the Appellate Tribunal for purposes of the Act;

      (2)  “arrears”, in relation to a person, shall mean, on any day, the tax due and payable by the person under the Act or the rules before that day but which has not yet been paid;

      (3)  “Assistant Commissioner” means a person appointed as an Assistant Commissioner of the Authority;

      (4)  associates or “associated persons” refer to–

            (a)  two persons, where the relationship between them is such that one may reasonably be expected to act in accordance with the intentions of the other, or both persons may reasonably be expected to act in accordance with the intentions of a third person but two persons shall not be associates solely by reason of the fact that one person is an employee of the other or both persons are employees of a third person;

            (b)  without prejudice to the generality of paragraph (a) and subject to paragraph (c), the following persons shall always be treated as associates:-

                    (i)  an individual and a relative of that individual;

                    (ii)  members of an association of persons;

                   (iii) a member of an association of persons and the association, where the member, either alone or together with an associate or associates under another application of this section controls fifty percent or more of the rights to income or capital of the association;

                   (iv) a shareholder in a company and the company, where the shareholder, either alone or together with an associate or associates under another application of this section, controls either directly or through one or more interposed persons–

                          a. fifty percent or more of the voting power in the company;

                          b. fifty percent or more of the rights to dividends; or

                          c. fifty percent or more of the rights to capital; and

                    (v)  two companies, where a person, either alone or together with an associate or associates under another application of this section, controls either directly or through one or more interposed persons–

                          a. fifty percent or more of the voting power in both companies;

                          b. fifty percent or more of the rights to dividends in both companies;

                          c. fifty percent or more of the rights to capital in both companies; and

            (c)  two persons shall not be associates under sub-paragraph (i) or (ii) of paragraph (b) where the Commissioner is satisfied that neither person may reasonably be expected to act in accordance with the intentions of the other.

                  Explanation.– The expression `relative in relation to an individual’ means–

                   (i)    an ancestor, a descendant of any of the grandparents, or an adopted child of the individual or of a spouse of the individual; or

                   (ii)   a spouse of the individual or of any person specified at (i);

      (5)    association of persons” includes a firm, any artificial or juridical person and body of persons formed under a foreign law, but does not include a company;

      (6)    “Authority” means Punjab Revenue Authority established under [2][the Punjab Revenue Authority Act 2012 (XLII of 2012)];

      (7)    banking company” means a banking company as defined in the Banking Companies Ordinance, 1962 (LVII of 1962) and includes any body corporate which transacts the business of banking in the Punjab;

      (8)    “Commissioner” means a person appointed as Commissioner of the Authority;

      (9)    “Commissioner (Appeals)” means a person appointed as Commissioner (Appeals) of the Authority;

     (10)   common taxpayer identification number” means the registration number or any other number or identification code allocated to a registered person;

     (11)   companymeans–

              (a)  a company as defined in the Companies Ordinance, 1984 (XLVII of 1984);

              (b)  a body corporate formed by or under any law;

              (c)  a modarba and any other Islamic financial institution;

              (d) a body incorporated outside Pakistan;

              (e)  a trust, a co-operative society or a finance society or any other society established or constituted by or under any law; or

              (f)  a foreign association, whether incorporated or not, which the Authority has, by general or special order, declared to be a company for purposes of the Act;

     (12)   “computerized system” means any comprehensive information technology system, including its development, upgradation or updation, to be used by the Authority or any other office as may be notified by the Authority, for carrying out the purposes of the Act;

     (13)   default surcharge” means the default surcharge levied under the Act;

     (14)   defaulter” means a person and, in the case of company or firm, every director of the company or partner of the firm and includes guarantors or successors, who fail to pay the arrears of tax under the Act and the rules;

     (15)   “Deputy Commissioner” means a person appointed as a Deputy Commissioner of the Authority;

     (16)   documentincludes any electronic data, computer programmes, computer tapes, computer disks, micro-films or any other medium or mode for the storage or conveyance of such data;

     (17)   “due date” in relation to the furnishing of a return under Chapter VI means the 15th day of the month following the end of the tax period, or such other date as the Authority may, by notification in the official Gazette, specify;

     (18)   economic activity” shall have the meaning given to it in section 6;

     (19)   “e-intermediary” means a person appointed as e-intermediary under the Act;

     (20)   exempt service” means a service which is exempt from the tax under section 12;

     (21)   “FBR” means the Federal Board of Revenue established under the Federal Board of Revenue Act, 2007;

     (22)   financial year” means the period from 1st July of a year to 30th June of the following year;

     (23)   firmmeans the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all;

     (24)   goodsinclude every kind of movable property other than actionable claims, money, stocks, shares and securities but does not include a service defined under the Act;

     (25)   “Government” means Government of the Punjab;

     (26)   inter-bank rate” means the Karachi inter-bank offered rate prevalent on the first day of each quarter of a financial year;

     (27)   officer of the Authority” means any officer of the Authority;

     (28)   open market price” shall have the meaning as given to it in section 8;

     (29)   personmeans–

              (a)  an individual;

          [3][(aa) an association of persons;]

              (b)  a company;

              (c)  Federal Government;

              (d) a Provincial Government;

              (e)  a local authority or local government; or

              (f)  a foreign government, a political subdivision of a foreign government, or public international organization;

                    Explanation.– The use of the word “he” in the Act shall be taken to refer to any or all mentioned from (a) to (f) as required in the context of the relevant provision;

     (30)   place of business” means that a person–

              (a)  owns, rents, shares or in any other manner occupies a space in the Punjab from where he carries on an economic activity whether wholly or partially; or

              (b)  carries on an economic activity whether wholly or partially through any other person such as an agent, associate, franchise, branch, office, or otherwise in the Punjab but does not include a liaison office;

     (31)   prescribedmeans prescribed by the rules;

     (32)   registration number” means the number allocated to a registered person for purposes of the Act;

     (33)   “registered person” means a person who is registered or is liable to be registered under the Act but the person liable to be registered and has not registered shall not be entitled to any benefit available to a registered person under any of the provisions of the Act or the rules;

     (34)   returnmeans any return required to be furnished under Chapter VI of the Act;

     (35)   resident” means–

              (a)  an individual who, in a financial year, has–

                      (i)    a place of business, whole or part thereof, in the Punjab in any mode, style or manner; or

                      (ii)    his permanent address, as listed in the individual’s national identity card, in the Punjab; or

                     (iii)   a permanent representative to act on his behalf or to provide service on his behalf in the Punjab.

              (b)  an association of persons or a company which, in a financial year, has–

                      (i)    its registered office in the Punjab; or

                      (ii)    its place of business, whole or part thereof, in the Punjab in any mode, style or manner; or

                     (iii)   a permanent representative to act on its behalf or to provide service on its behalf in the Punjab; or

                     (iv)   the control or management of the affairs of the association of persons is situated in the Punjab at any time during the financial year;

     (36)   rules” means the rules made under the Act;

     (37)   “Schedule” means a Schedule appended to the Act;

     (38)   serviceor “services” means anything which is not goods or providing of which is not a supply of goods and shall include but not limited to the services listed in First Schedule;

              Explanation.– A service shall remain and continue to be treated as service regardless whether or not rendering thereof involves any use, supply [4][, disposition] or consumption of any goods either as an essential or as an incidental aspect of such rendering;

     (39)   “short-paid” means where a registered person pays an amount of tax less than the tax due owing to miscalculation or incorrect assessment of the tax amount due for a tax period;

     (40)   similar service” means any other service which is the same as, or closely resembles with, the other service in character, quality, quantity, functionality, materials, or reputation;

     (41)   “Special Judge” means a Special Judge appointed under section 42;

     (42)   taxmeans and includes–

              (a)  the tax, additional tax, or default surcharge levied under the Act;

              (b)  a fine, penalty or fee imposed or charged under the Act; and

              (c)  any other sum payable or recoverable under the Act or rules;

     (43)   tax fraud” means knowingly, dishonestly or fraudulently and without any lawful excuse–

              (a)  doing of any act or causing to do any act; or

              (b)  omitting to take any action or causing the omission of any action, including providing of taxable services without being registered under the Act; or

              (c)  falsifying or causing falsification of tax invoices or other tax documents or records; or

              (d)  acting in contravention of the duties or obligations imposed under the Act or rules or instructions issued thereunder –

                with the intention of understating or suppressing the tax liability or underpaying [5][or not paying] the tax liability;

     (44)   tax period” means a period of one month or such other period as the Authority may, by notification in the official Gazette, specify;

     (45)   taxable service” shall have the meaning as given to it in section 3; and

     (46)   value of a taxable service” shall have the meaning as given to it in section 7.

 

3.   Taxable service.– (1) Subject to such exclusion as mentioned in Second Schedule, a taxable service is a service listed in Second Schedule, which is provided by a person from his office or place of business in the Punjab in the course of an economic activity, including the commencement or termination of the activity.

      Explanation.– This sub-section deals with services provided by a person regardless whether such services are provided to a resident person or a non-resident person.

      (2)  If a service listed in Second Schedule is provided to a resident person by a non-resident person in the course of an economic activity, including the commencement or termination of the activity, it shall be treated as a taxable service.

      Explanation.– This sub-section deals with services provided by a non-resident person to a resident person whether or not the end consumers, if any, of such services are identifiable for purposes of this Act or the rules.

      (3)  For purposes of sub-section (2), where a person has a registered office or place of business in the Punjab and another outside the Punjab, the registered office or place of business in the Punjab and that outside the Punjab shall be treated as separate legal persons.

      (4)  The Authority may, with prior approval of the Government, by notification in the official Gazette, prescribe rules for determining the conditions under which a particular service or class of service shall be considered to have been provided by a person from his registered office or place of business in the Punjab.

      (5)  For purposes of this Act and the rules, providing of service shall, where the context so requires, include rendering, supply, initiation, origination, execution, reception, consumption or termination of a service whether in whole or in part.

 

4.   Application of principles of origin and reverse charge in certain situations.– (1) Where a person is providing taxable services in a Province other than the Punjab but the recipient of such services is resident of the Punjab or is otherwise availing such services in the Punjab and has charged tax accordingly, the person providing such services shall pay the amount of tax so charged to the Government.

      (2)  Where the recipient of a taxable service is a person registered under the Act, he shall deduct the whole amount of tax in respect of the service received and pay the same with the Government.

      (3)  Where a person is providing taxable services in more than one Province or territory in Pakistan including the Punjab, such person shall be liable to pay tax to the Government to the extent the tax is charged from a person resident in the Punjab or from a person who is otherwise availing such services in the Punjab.

      (4)  Where rendering of a taxable service originates from the Punjab but terminates outside Pakistan, such person shall be required to pay tax on such service to the Government.

      (5)  Where a taxable service originates from outside Pakistan but is received or terminates in the Punjab, the recipient of such service shall be liable to pay the tax to the Government.

      (6)  The persons who are required to pay the tax to the Government in terms of sub-sections (1), (2), (3), (4) and (5) shall be liable to registration for purposes of this Act and the rules.

      (7)  All questions or disputes relating to the application of the principle of origin given in this section shall be resolved in terms of the already recorded understanding between the Federal Government and the Provincial Governments on the implementation of reformed General Sales Tax provided that pendency of any such question or dispute shall not absolve the concerned person from his obligation to deposit the tax.

      (8)  The provisions of this section shall apply notwithstanding any other provision of this Act or the rules and the Government may specify special procedure to regulate the provisions of this section.

 

5.   Amendment in Second Schedule.– (1) The Government may, by notification in the official Gazette, make an amendment in Second Schedule by modifying, adding or deleting any entry or entries with reference to the classification, if any, description of any service or class of services and the rate or rates of tax chargeable on any service or class of services not exceeding the maximum rate prescribed in Second Schedule.

      (2)  A notification issued under sub-section (1) shall be effective from such date as may be specified in the notification but such date shall not be prior to the date on which the notification is published in the official Gazette.

      (3)  The Government shall at the time of presenting the Annual Budget Statement for the next financial year, lay before the Provincial Assembly of the Punjab all the notifications relating to the amendments in the Second Schedule during the current financial year.

 

6.   Economic activity.– (1) An economic activity means any activity carried on whether continuously, regularly or otherwise by a person that involves or is intended to involve the provision of services to another person and includes–

      (a)  an activity carried on in the form of a business, including a profession, calling, trade, or undertaking of any kind, whether or not the activity is undertaken for any consideration or profit;

      (b)  the supply of movable property by way of lease, license or such similar arrangement; and

      (c)  a one-time transaction or concern in the nature of a business or trade.

      (2)  Anything done or undertaken during the commencement or termination of an economic activity shall be construed as part of the economic activity.

      (3)  An economic activity does not include–

            (a)  the activities of an employee providing services in that capacity to an employer; or

            (b)  a private recreational pursuit or hobby of an individual.

 

7.   Value of a taxable service.– (1) The value of a taxable service is the [6][gross amount of] consideration (by whatever name called such as charges or price) in money including all the Federal and the Provincial duties, taxes or charges, if any, which the person providing a service receives from the recipient of the service but does not include the amount of the tax.

      (2)  In case the consideration for a service is in kind or is partly in kind and partly in money, the value of the service shall mean the open market price of the service as determined under section 8 excluding the amount of the tax.

      (3)  In case the person who provides the service and the recipient of the service are associated persons and the service is supplied for no consideration or for a consideration which is lower than the price at which the person provides the service to other persons who are not associated persons, the value of the service shall mean the price at which the service is provided to such other persons but does not include the tax.

      (4)  In case a person provides a service for no consideration or for a consideration which is lower than the price at which such a service is provided by such person, the value of the service shall mean the open market price for such a service.

      (5)  In case of trade discounts, the value of the service shall mean the discounted price, excluding the amount of the tax, provided the invoice shows that the discounted price and the related tax and the discount allowed is in conformity with customary business practice.

      (6)  In case there is reason to believe that the value of a service has not been correctly declared in the invoice or for any special nature of transaction it is difficult to ascertain the value of a service, the value of the service shall be the open market price.

      (7)  Notwithstanding anything in sub-sections (1) to (6), where the Authority deems it necessary, it may, by notification in the official Gazette, fix the value of any service or class of services and for that purpose fix different values for different classes or descriptions of the same or similar types of services but if the value at which the service is provided is higher than the value fixed by the Authority, the value of the service shall, unless otherwise directed by the Authority, be the value at which the service is provided.

      Explanation. For the purpose of this section, the value of the utilities or facilities, if any, ancillary to providing of taxable services shall be included in the value of such services.

      (8)  The Authority may, by notification in the official Gazette, issue valuation rules for any service or class of services for purposes of assessment or determination and payment of tax under this Act and prescribe threshold, parameters, standards, methods, formula, criteria or bases for the determination of value of any taxable service or class of taxable services and the assessment of the tax on any service or class of services.

 

8.   Open market price.– (1) The open market price of a service is–

      (a)  the price, the service would fetch in an open market transaction freely entered into between persons who are not associated persons; or

      (b)  if it is not possible to determine an amount under paragraph (a), the price a similar service would fetch in an open market transaction freely made between persons who are not associated persons, adjusted to take account of the differences between the similar service and the actual service,

      (c)  determined on the basis of the market conditions prevailing at the time and place at which the service is provided.

      (2)  If the open market price of a service cannot be determined under sub-section (1), it may be determined by using any method or formula specified by the Authority for calculating an objective approximation of the price, the service would fetch in an open market transaction freely made between persons who are not associates.

 

9.   Provision of services over a period of time.– (1) Where a service is provided over a period of time and payment for the same is made on a periodic basis, the service shall be treated as comprising two or more separate and distinct services each corresponding to the part of the service to which each separate part of the consideration relates.

 

Illustrations

      (a)  Where services are provided for a two year period and payment is made on a semi-annual basis, the provision of services for each six month period constitutes a separate service.

      (b)  Where an insurance company provides an insurance policy over a five year period and receives a premium on an annual basis, each premium relates to a separate service.

      Note: The above illustrations are merely explanatory and shall not be construed as conclusive in any manner whatsoever.

      (2)  This section does not apply to services for which payment is made on installments basis.

 

Chapter II

Scope of Tax

10. Scope of tax and allied matters.– (1) Subject to the provisions of this Act and the rules, there shall be charged, levied, collected and paid the tax on the value of a taxable service at the rate or rates specified in the Second Schedule.

      (2)  The Government may, on the recommendation of the Authority and subject to such conditions and restrictions as the Government may impose, by notification in the official Gazette, declare that in respect of any taxable service provided by a registered person or a class of registered persons, the tax shall be charged, levied and collected at such higher, lower, fixed or specific rate or rates as may be specified in the said notification.

      (3)  Notwithstanding other provisions of this Act, the Authority may, with the prior approval of the Government and by notification in the official Gazette and subject to the conditions, restrictions, limitations or otherwise, fix the limit or threshold of annual turnover of any service or class of services provided by any person or class of persons below which such person or class of persons shall be exempt from payment of tax under the Act.

      (4)  A person required to pay tax under this Act shall be entitled to deduct from the payable amount, the amount of tax already paid by him on the receipt of taxable services used exclusively in connection with taxable services provided by such person subject to the condition that he holds a true and valid tax invoice not older than six tax periods, showing the amount of tax earlier charged and paid under the Act on the services so received but the Authority may, by notification in the official Gazette, disallow or restrict such deduction in case of any service or services as it may deem appropriate.

 

11. Person liable to pay tax.– (1) Where a service is taxable by virtue of sub-section (1) of section 3, the liability to pay the tax shall be on the registered person providing the service.

      (2)  Where a service is taxable by virtue of sub-section (2) of section 3, the liability to pay the tax shall be on the person receiving the service.

      (3)  The Authority may, by notification in the official Gazette, specify the service or services in respect of which the liability to pay tax shall be on any person, other than the person providing the taxable service, or the person receiving the taxable service.

      (4)  Nothing contained in this section shall prevent the collection of tax from a different person if that person is made separately or jointly or severally liable for the tax under section 19.

 

12. Exemptions.– (1) Notwithstanding the provisions of sections 3 and 10, the Authority may, with the approval of the Government and subject to such conditions, limitations or restrictions as it may impose, by notification in the official Gazette, exempt–

      (a)  taxable service or services from the whole or any part of the tax;

      (b)  taxable service or services provided by a person or class of persons from the whole or any part of the tax;

      (c)  recipient or recipients of service or services, including international organizations and institutions, from the payment of the whole or any part of the tax; and

      (d) a class of persons, any area or areas of the Punjab from the whole or any part of the tax.

      (2)  The exemption under sub-section (1) may be allowed from any previous date specified in the notification issued under sub-section (1).

 

13. Effect of change in the rate of tax.– If there is a change in the rate of tax, the taxable services shall be charged to tax at such rate as is in force at the time the service is provided.

 

14. Special procedure and tax withholding provisions.– (1) Notwithstanding anything contained in this Act, the Authority may, by notification in the official Gazette, prescribe a special procedure for the payment of tax, registration, book keeping, invoicing or billing requirements, returns and other related matters in respect of any service or class of services, as may be specified.

      (2)  Notwithstanding other provisions of this Act, the Authority may require any person or class of persons whether registered or not for the purpose of this Act to withhold full or part of the tax charged from such person or class of persons on the provision of any taxable service or class of taxable services and to deposit the tax so withheld, with the Government within such time and in such manner as it may, by notification in the official Gazette, specify.

 

15. Delegation of power to collect, administer and enforce tax on certain services.– (1) The Government may, in accordance with Article 147 of the Constitution of the Islamic Republic of Pakistan, authorize the Federal Board of Revenue or any other Federal agency or person to administer, collect and enforce the levy of tax on such taxable services as it may notify and in such mode and manner and for such period as may be prescribed and subject to such limitations, restrictions and conditions as it may deem appropriate.

      (2)  The Government may, by notification in the official Gazette, authorize any Provincial agency, department, organization or person to administer, collect and enforce the levy of tax on such taxable services as it may notify in such mode and manner and for such period as it may prescribe and subject to such restrictions and conditions as it may impose.

      (3)  At the end of the period prescribed under sub-section (1), the tax on taxable services notified under sub-section (1) shall be administered, collected and enforced by the Authority in the same mode and manner as all other taxable services.

 

16. Adjustments.– (1) The Authority may, subject to such conditions and restrictions as it may specify, allow registered persons to claim adjustments or deductions, including refunds arising as a result thereof, in respect of the tax paid under any other law on any account in respect of any taxable service or goods or class of taxable services or goods provided by them.

      (2)  For purposes of sub-section (1), the Authority may adopt the principles or concepts laid down in such other law in respect of adjustments, deductions or refunds including zero-rating principle.

      (3)  For the purpose of removal of any doubt it is clarified that no adjustment or deduction of any tax payable under any other law shall be claimed by any person except in the manner and to the extent specified in the notification issued under sub-section (1).

 

Chapter III

Payment and Collection of Tax on Taxable Services

17. Collection of excess tax.– (1) Any person who has collected or collects the tax or charge, whether under misapprehension of any provision of this Act or otherwise, which was not payable as tax or charge or which was in excess of the tax or charge actually payable and the incidence of which had been passed on to the person to whom the service was provided, shall pay the amount of tax or charge so collected to the Government.

      (2)  Any amount payable to the Government under sub-section (1) shall be deemed to be an arrear payable under the Act and shall be recovered accordingly.

      (3)  The burden of proof that the incidence of tax or charge referred to in sub-section (1) has been or has not been passed to the person to whom the service is provided shall be on the person collecting the tax or charge.

 

18. Time, manner and mode of payment.– (1) The tax in respect of a taxable service provided during a tax period shall be paid by a person at the time of filing the return in respect of that period under Chapter VI.

      (2)  For purposes of sub-section (1), a taxable service shall be considered to have been provided in the tax period during which–

            (a)  it was provided to the recipient;

            (b)  an invoice for the value of the taxable service was issued or was due to be issued or sent or due to be sent to the recipient; or

            (c)  consideration for the same was received–,

            whichever is earlier.

      (3)  Notwithstanding anything contained in sub-section (1), the Authority may, by a notification in the official Gazette, direct that the tax in respect of any taxable service or such class of taxable services shall be charged, collected and paid in any other way, mode, manner or time as may be specified in the notification.

      (4)  The tax due on taxable services shall be paid by any of the following modes:-

            (a)  through deposit in a bank designated by the Authority; or

            (b)  through such other mode and manner as may be specified by the Authority.

 

19. Joint and several liability of registered persons where tax unpaid.– (1) Where a registered person receiving a taxable service from another registered person is in the knowledge of or has reasonable grounds to suspect that some or all of the tax payable in respect of that taxable service provided would go unpaid as against the requirements of this Act, such person as well as the person providing the taxable service shall be jointly and severally liable for payment of such unpaid amount of the tax.

      (2)  The Authority may, by notification in the official Gazette, exempt any person, service or transaction or class of persons, services or transactions from the provision of sub-section (1).

 

20. Sales of taxable activity or transfer of ownership.– (1) Where the ownership of any business providing taxable services is sold, transferred or otherwise disposed of as an ongoing concern or activity, the fact of such sale, transfer or other disposition shall be intimated to the Commissioner within one month of the occurrence of such fact by the former owner.

      (2)  The tax chargeable on the taxable services provided in the business referred to in sub-section (1) shall be accounted for and paid by the person to whom sale or other disposition of such business is made or ownership thereof is transferred and every such person shall be liable to registration under this Act.

 

21. Estate of deceased person.– The tax liability of a deceased registered person under this Act shall be the first charge on his estate in the hands of his successors.

 

22. Estate in bankruptcy.– (1) Where a registered person is declared bankrupt, the tax liability under this Act shall pass on to the estate in bankruptcy if it continues to operate the business.

      (2)  Where the tax liability is incurred by an estate in bankruptcy, the tax shall be deemed to be a current expenditure in the operations of the estate in bankruptcy and shall be paid before the claims of all other creditors are settled.

 

23. Liability for payment of tax in case of private companies or business enterprises.– Where any private company or business enterprise is wound up and any tax chargeable on or payable by the company or business enterprise, whether before, or in the course, or after its liquidation, in respect of any tax period cannot be recovered from the company or business enterprise, every person who was an owner of, or partner in, or director of the company or business enterprise during the relevant period shall, jointly and severally with such persons be liable for payment of such tax.

 

24. Assessment of tax.– (1) Where on the basis of any information acquired during an audit, inquiry, inspection or otherwise, an officer of the Authority is of the opinion that a registered person has not paid the tax due on taxable services provided by him or has made short payment, the officer shall make an assessment of the tax actually payable by that person and shall impose a penalty and charge default surcharge in accordance with sections 48 and 49.

      (2)  No order under sub-section (1) shall be made unless a notice to show cause is given to the person in default within five years from the conclusion of the tax period to which the assessment relates specifying the grounds on which it is intended to proceed against him and the said officer shall take into consideration the representation made by such person and provide him with an opportunity of being heard if the person so desires.

      (3)  An order under sub-section (1) shall be made within one hundred and twenty days of issuance of the show cause notice or within such extended period as the officer may, for reasons to be recorded in writing, fix provided that such extended period shall ordinarily not exceed sixty days.

      (4)  In computing the period specified in sub-section (3), any period during which the proceedings are adjourned on account of a stay order or proceedings under section 69 or the time taken through adjournments by the person shall be excluded.

      (5)  An order passed by an officer under sub-section (1) may be further amended as may be necessary when on the basis of any additional information acquired during an audit, inquiry, inspection or otherwise, the officer is satisfied that–

            (a)  any tax has been under-assessed or assessed at a low rate; or

            (b)  any taxable service provided by the person has escaped assessment.

      (6)  The provisions of sub-sections (2), (3) and (4) shall be applicable to an order passed under sub-section (5).

 

Chapter IV

Registration

25. Registration.– (1) A person shall register under this Act, who–

      (a)  provides any taxable service from his office or place of business in the Punjab; or

      (b)  is otherwise required to be registered under any of the provisions of the Act or the rules; or

      (c)  fulfills any other criteria or requirements which the Authority may prescribe under sub-section (2).

      (2)  The registration under this section will be regulated in such manner and subject to such conditions and restrictions as the Authority may, by notification in the official Gazette, prescribe.

      (3)  A person who receives a service, which is a taxable service by virtue of sub-section (2) of section 3, and is not a registered person shall be deemed to be a registered person for the purposes of the tax period in which–

            (a)  such person receives the service;

            (b)  an invoice for the value of the service is issued or sent to or received by the person; or

            (c)  consideration for the service is paid by the person –

            whichever is earlier and all the provisions of this Act and the rules shall be applicable to such person for that particular tax period and any matters relating to, arising out of, or concerning that tax period as if that person had provided the service.

      (4)  The Authority may publish on its website a list of persons registered under this Act.

      (5)  It shall be reasonable for a person to believe that another person is registered under this Act if that other person is on the list placed on the website of the Authority.

[7][Explanation.– Unless otherwise specified, no person shall be absolved of any tax liability for want of registration under this Act or the rules.]

 

26. Voluntary registration.– (1) A person who carries on an economic activity but is not required to be registered may apply for voluntary registration at any time.

      (2)  If a person who is not required to be registered applies for voluntary registration, the Authority may register the person if the Authority is satisfied that–

            (a)  the person is providing, or shall provide a service that is taxable service if the person was registered;

            (b)  the person has a place of business at which he carries on an economic activity;

            (c)  there are reasonable grounds to believe that the person shall keep proper records and file regular returns as prescribed under this Act and the rules; and

            (d) if the person has commenced carrying on an economic activity, the person has–

                    (i)   kept proper records in relation to his economic activity; and

                    (ii)  complied with his obligations under other applicable taxation laws.

 

27. Compulsory registration.– (1) If the Authority is satisfied that a person who is required to be registered and has not applied for registration, the Authority shall register the person and shall, not later than fifteen days before the day on which the registration takes effect, notify the person of the registration, the day on which it takes effect, and the registration number issued to the person.

      (2)  No person shall be registered compulsorily without being given an advance notice and an opportunity of being heard in such manner as the Authority may specify.

      (3)  The Authority may, by notification in the official Gazette, authorize any officer to perform any of the functions under this section relating to compulsory registration of a person for any of the taxable services.

 

28. Suspension of registration.– (1) Subject to sub-section (3), the Authority may temporarily inactivate the registration of a person if it is satisfied that the person–

      (a)  is not entitled to be registered; or

      (b)  has failed to comply with obligations under this Act or the rules.

      (2)  The Authority shall give notice to a registered person stating the reasons for temporary inactivation of the person’s registration and the remedial actions required to be taken by the person in such time as may be specified in the notice.

      (3)  In case the Authority is not satisfied with the response of the person or the remedial action taken by him or does not receive any response in the specified time, the Authority may suspend that person’s registration.

      (4)  The suspension of registration shall be effected by removing the name of the person from the list of registered persons published on the Authority’s website.

      (5)  At any time within a period of sixty days of suspension, the Authority may withdraw the suspension if it is satisfied with the remedial actions taken by the person.

      (6)  Where, after sixty days, the suspension has not been withdrawn, the Authority may–

            (a)  institute proceedings against the person in respect of the alleged non-compliance under this Act;

            (b)  reinstate the person’s registration; or

            (c)  if neither of the actions in clauses (a) and (b) is done, cancel the person’s registration.

      (7)  No registration shall be cancelled unless the Authority either through enquiry, investigation or audit is satisfied that circumstances exist necessitating such cancellation and under no circumstances, the cancellation of registration shall absolve the person of his other obligations and liabilities under the Act or the rules.

 

29. De-registration.– (1) The Authority may de-register a registered person or such class of registered persons not required to be registered under this Act.

      (2)  Where any person registered under this Act believes that he does not satisfy the requirements for registration specified in section 25, he may make an application to the Authority to be de-registered.

      (3)  If upon receiving such an application, the Authority is satisfied that the person is not required to be registered under this Act and has fulfilled the obligations under the Act, it shall de-register such person.

      (4)  Where the Authority receives an application under sub-section (2), it shall dispose of the application within a period of three months from the date of the receipt of the application, or within such extended period, not exceeding sixty days, as the Authority may, for reasons to be recorded in writing, fix.

[8][29A. Restoration of registrations. The Authority may, subject to conditions as may be prescribed, reactivate, revive, reinstate or restore any registration which has been de-activated, suspended or cancelled for any reason or under any circumstances.]

 

Chapter V

Book Keeping and Audit Proceedings

30. Issuance of tax invoices.– (1) A registered person providing a taxable service shall issue a numbered and dated tax invoice containing the following particulars:-

      (a)  name, address and registration number of the service provider;

      (b)  name, address and registration number, if any, of the service recipient;

      (c)  description of service or services;

      (d) value exclusive of the tax;

      (e)  amount of the tax; and

      (f)  value inclusive of the tax.

      (2)  The Authority may, by notification in the official Gazette, specify such modified invoices for different services or persons and prescribe the manner and procedure for regulating the issuance and authentication of tax invoices.

      (3)  A registered person providing a taxable service may, subject to such conditions and restrictions as the Authority may, by notification in the official Gazette, specify, issue invoices to another registered person or other recipient of taxable service electronically and transmit images or statements of such invoices to the Authority as well as to the Commissioner, as may be specified.

 

31. Records.– (1) A registered person providing taxable service [9][or a person required to pay tax under this Act or rules] shall maintain and keep at his business premises or registered office in English or Urdu the following records of taxable service (including exempt service) provided by him or by his agent acting on his behalf in such form and manner as would permit ready ascertainment of his tax liability during a tax period–

      (a)  records of taxable service provided indicating–

            (i)   the description and type of service;

            (ii)  the value of the service;

            (iii) the particulars of the person to whom the service was provided; and

            (iv) any other information as may be specified by the Authority;

      (b)  records of exempt service; and

      (c)  such other records as may be specified by the Authority.

      (2)  The Authority may, by notification in the official Gazette, require a registered person or class of registered persons to declare and use as many number of business bank accounts as may be specified by the Authority in such notification to make or receive payments on account of providing [10][or receiving] services for the purpose of this Act and the rules and to make payment of due tax from such accounts.

      (3)  The Authority may, by notification in the official Gazette, specify that any person or class of persons registered under this Act shall use such electronic fiscal cash registers in such manner as are approved by the Authority.

      (4)  The Authority may, by notification in the official Gazette, prescribe the procedure or software for electronic invoicing or billing, maintenance of records, filing of tax returns and for any other matter or approve any software for electronic invoicing or billing, maintenance of records and filing of returns by a registered person or class of such persons under this Act.

      (5)  The registered persons, whose accounts are subject to audit under the Companies Ordinance, 1984 (XLVII of 1984), shall be required to submit a copy of the annual audited accounts, along with a certificate by the auditors certifying the payment of the tax due and any deficiency in the tax paid by the registered person.

 

32. Retention and production of records and documents.– (1) A person, who is required to maintain any record or documents under this Act, shall retain the record and documents for a period of five years after the end of the tax period to which such record or documents relate or till the final decision in any proceedings including proceedings for assessment, appeal, revision, reference or petition, whichever is later.

      (2)  A person who is required to maintain any record or documents under this Act or any other law shall, as and when required by an officer not below the rank of the Assistant Commissioner, produce records or documents which are in his possession or control or in the possession or control of his agent, and where such records or documents have been stored as electronic data, he shall allow to such officer full and free access to, and use of, such data of any machine.

 

33. Audit proceedings.– (1) An officer authorized by the Authority or the Commissioner may, on the basis of the return or returns submitted by a registered person or the records maintained under this Act and the rules, conduct an audit of such person.

      (2)  In case the Authority or the Commissioner has any information showing that any registered person is involved in tax fraud or evasion of tax, it or as the case may be, he may authorize an officer not below the rank of the Assistant Commissioner, to conduct an inquiry or investigation, which may or may not be in addition to any audit carried out for the same period.

      (3)  Where the officer is to conduct an audit under sub-section (1), he shall issue a notice of audit to the person informing him of the audit proceedings and direct him to produce any records or documents which such officer may require for conducting the audit.

      (4)  The officer shall conduct audit and issue an audit observation or observations pointing out the contraventions of this Act or the rules and the amount of the tax evaded or short paid, and the registered person may, within a period of twenty one days of the receipt of the audit observation, submit his reply in writing.

      (5)  If no reply is received within the specified time or the reply furnished by the registered person is found unsatisfactory, the officer shall issue an audit report specifying the amount of the tax or charge that has not been levied or has been short levied or any other violation of any provision of the Act or the rules.

      (6)  After completion of the audit under this section or any other provision of this Act or the rules, an officer having pecuniary jurisdiction in terms of section 60 shall, if required, pass an order determining the correct amount of payable tax, charging default surcharge and imposing a penalty.

      (7)  Notwithstanding the penalties prescribed in section 48–

            (a)  if a registered person wishes to deposit the amount of the tax short paid or evaded along with default surcharge voluntarily, whenever it comes to his notice, he may, before receipt of notice of audit, file a revised return and may deposit the amount of tax short paid or evaded along with default surcharge, in which case no penalty shall be recovered from him;

            (b)  if a registered person wishes to deposit the amount of the tax short paid or evaded along with default surcharge during the audit, or at any time before issuance of show cause notice in lieu of the audit report, he may file a revised return and may deposit the short paid or evaded amount of the tax, default surcharge under section 49 and twenty percent of the penalty payable under section 48, in which case the show cause notice in lieu of the audit report shall not be issued in the matter;

            (c)  if a registered person wishes to deposit the amount of tax short paid or evaded along with default surcharge after issuance of show cause notice, he may file a revised return and may deposit the short paid or evaded amount of the tax, default surcharge under section 49, and fifty percent of the penalty payable under section 48 and, thereafter, the show cause notice shall abate.

 

34. Special audit by chartered accountants or cost accountants.– (1) The Authority may, by notification in the official Gazette, appoint a Chartered Accountant as defined under Chartered Accountants Ordinance, 1961 (X of 1961) or a firm of Chartered Accountants or a Cost and Management Accountant within the meaning of the Cost and Management Accountants Act, 1966 (XIV of 1966) or a firm of Cost and Management Accountants, for conducting a special audit of the records of any registered person.

      (2)  Notwithstanding that the records of a registered person have been audited by an officer appointed under section 39, the Authority or a Commissioner may direct an auditor appointed under sub-section (1) to audit the records of any registered person for the same period.

      (3)  An auditor appointed under sub-section (1), shall have such powers of an officer as may be conferred by the Authority to such auditor under any of the provisions of this Act or the rules.

      (4)  For purposes of this section or section 33, the audit of records includes audit of the tax affairs of the registered person under this Act and the rules.

 


Chapter VI

Returns

35. Return.– (1) Every registered person shall furnish, not later than the due date, a true, correct and properly filled-up return in the prescribed form to a designated bank or any other office specified by the Authority, indicating the tax due and paid during a tax period and such other information or particulars as may be prescribed by the Authority.

      (2)  Notwithstanding anything in sub-section (1), the Authority may, by notification in the official Gazette, require any registered person or class of registered persons to submit returns on a quarterly, six monthly or annual basis in lieu of monthly return.

      (3)  Notwithstanding anything in sub-section (1), the Authority may, by notification in the official Gazette, require any registered person to submit such returns, as may be prescribed, on any period basis in addition to other returns required to be filed by such person.

      (4)  A return filed electronically on the web or any magnetic media or any other computer readable media as may be specified by the Authority shall be deemed to be a return for the purpose of sub-sections (1), (2) or (3) and the Authority may, by notification in the official Gazette, prescribe the criteria for eligibility of the data of such returns and e-intermediaries who shall digitize the data of such returns and transmit the same electronically under their digital signatures.

      (5)  If there is a change in the rate of the tax during a tax period, a separate return in respect of each portion of tax period showing the application of different rates of tax shall be furnished.

      (6)  A registered person may, after prior permission from the Commissioner, file a revised return within one hundred and twenty days of filing a return under sub-sections (1), (2) or (3), to correct any omission or wrong declaration made therein and to deposit any amount of the tax not paid or short paid.

 

36. Special returns.– In addition to the return or returns specified under section 35, the Commissioner may require any person, whether registered or not, to furnish a return (whether on his own behalf or as an agent or trustee) in a prescribed form and such person shall furnish the return not later than the date specified in this regard.

 

37. Final return.– If a person applies for de-registration in terms of section 29, he shall before such de-registration, furnish a final return to the Authority or the Commissioner in the specified form in such manner and at such time as may be directed by the Authority or the Commissioner.

 

38. Return deemed to have been made.– A return purporting to be made on behalf of a person by his duly appointed representative or agent shall, for all purposes of this Act or the rules, be deemed to have been made by such person or under his authority unless proved to the contrary.

 

Chapter VII

Appointment of Authorities and their Powers

39. Appointment of authorities.– (1) For purposes of this Act and the rules, the Authority may, in the prescribed manner and by notification in the official Gazette, appoint in relation to any area or cases specified in the notification, any person to be a–

      (a)  Commissioner;

      (b)  Commissioner (Appeals);

      (c)  Additional Commissioner of the Authority;

      (d) Deputy Commissioner;

      (e)  Assistant Commissioner;

      (f)  Audit Officer of the Authority;

      (g)  Inspector of the Authority; or

      (h)  An officer of the Authority with any other designation.

      (2)  The Commissioner (Appeals) and the Commissioner shall be subordinate to the Authority.

      (3)  The Additional Commissioners, Deputy Commissioners and the Assistant Commissioners shall be subordinate to the Commissioner and unless otherwise directed by the Authority or the Commissioner, both the Deputy Commissioner and the Assistant Commissioner shall also be subordinate to the Additional Commissioner.

      (4)  The Audit Officers and Inspectors and the officers of other such equal or lower designations, if any, shall be subordinate to the Deputy Commissioner or to the Assistant Commissioner.

      (5)  The Authority may designate any Deputy Commissioner supervisory incharge of any Assistant Commissioner either by name or by designation in any of its subordinate offices or formations.

      (6)  The Authority may distribute the work and related functions amongst the above designations in a manner it deems appropriate and make changes in such work distribution as and when deemed proper.

      (7)  The Authority may, by notification in the official Gazette, prescribe uniform including shoulder strips and badges for different classes of the officers or officials of the Authority.

      (8)  All jurisdictional and competency issues arising under this Act or the rules shall be decided by the Authority in such manner as it thinks fit.

 

40. Powers.– (1) An officer appointed under section 39 shall exercise such powers and discharge such duties as are conferred on him under this Act and the rules and he shall also be empowered and competent to exercise all powers and discharge all duties or functions conferred upon any officer subordinate to him.

      (2)  The Authority may, by general or special order, impose such limitations, restrictions or conditions on the exercise of such powers and discharge of such duties or functions as it deems fit.

 

41. Distribution of powers.– (1) The Authority may, by notification in the official Gazette, and subject to such limitations or conditions, empower by name or by designation–

      (a)  an Additional Commissioner to exercise or perform any of the powers or functions of a Commissioner;

      (b)  a Deputy Commissioner to exercise or perform any of the powers or functions of an Additional Commissioner;

      (c)  an Assistant Commissioner to exercise or perform any of the powers or functions of a Deputy Commissioner; and

      (d) any other officer to exercise or perform any of the powers or functions of an Assistant Commissioner.

      (2)  The Authority may confer powers and functions of any officer as additional duties to any officer of the same rank or a step senior or junior in rank.

      (3)  An officer to whom any powers or functions are conferred under this section shall not assign such powers or functions to any other officer except with the prior permission of the Authority.

 

42. Special Judges.– (1) The Government may, by notification in the official Gazette, appoint any person who is serving or has served as District and Sessions Judge for a period of at least five years as Special Judge and, where it appoints more than one Special Judge, it shall specify in the notification the headquarters of each Special Judge and the territorial limits within which he shall exercise jurisdiction under this Act and the rules.

      (2)  If a Special Judge is, for any reasons, unable to perform his duties under this Act or the rules, the District and Sessions Judge of the District shall perform the duties of the Special Judge for the District.

 

43. Cognizance of offence.– (1) The Special Judge may, within the limits of his jurisdiction, take cognizance of any offence punishable by him upon–

      (a)  a report in writing made by an officer, not below the rank of Assistant Commissioner with the approval of the Commissioner or by an officer especially authorized in this behalf by the Authority;

      (b)  receiving a complaint or information of facts constituting such offence made or communicated by any person; or

      (c)  his knowledge acquired during any proceedings before him.

      (2)  If the Special Judge receives a report under clause (a) of sub-section (1), the Special Judge shall proceed with the trial of the accused.

      (3)  If the Special Judge receives a complaint or information under clause (b) of sub-section (1), on the basis of his own knowledge, the Special Judge shall, before issuing a summon or warrant for appearance of the person hold a preliminary inquiry for purposes of ascertaining the truth or falsehood of the complaint, information or knowledge or direct any Magistrate or any officer to hold such inquiry and submit a report, and such Magistrate or officer, shall conduct such inquiry and make a report accordingly.

      (4)  If, after conducting such an inquiry or after considering the report of such Magistrate or officer, the Special Judge may dismiss the complaint if there are no grounds to proceed further, or may decide to proceed against the person in accordance with law.

      (5)  A Special Judge or a Magistrate or an officer holding an inquiry under sub-section (3) may hold such inquiry, as nearly as possible, in accordance with the provisions of section 202 of the Code of Criminal Procedure, 1898 (V of 1898).

 

44. Application of the Code of Criminal Procedure, 1898.– (1) The provisions of the Code of Criminal Procedure, 1898 (V of 1898), so far as they are not inconsistent with the provisions of this Act, shall apply to all proceedings of the court of a Special Judge and such court shall be deemed to be a Court of Session for the purposes of the said Code and the provisions of Chapter XXII-A of the Code, so far as applicable and with necessary modifications, shall apply to the trial of cases by the Special Judge under the Act.

      (2)  For purposes of sub-section (1), the Code of Criminal Procedure, 1898 (V of 1898) shall have effect as if an offence punishable under this Act was one of the offences referred to in sub-section (1) of section 337 of the Code.

 

45. Exclusive jurisdiction of Special Judge.– No court other than the Special Judge having jurisdiction, shall try an offence punishable by the Special Judge under this Act.

 

46. Place of sitting.– A Special Judge shall ordinarily hold sittings at his headquarters provided that keeping in view the general convenience of the parties or the witnesses, he may hold sittings at any other place.

 

47. Persons who may conduct prosecution.– (1) An officer not below the rank of an Assistant Commissioner shall be competent to conduct prosecution before a Special Judge for and on behalf of the Government.

      (2)  A prosecution conducted under this Act before the Special Judge may only be withdrawn by the Authority on the direction or after concurrence of the Government.

 

Chapter VIII

Offences and Penalties

48. Offences and penalties.– (1) If a person commits any offence described in column 2 of the Table below shall, in addition to and not in derogation of any punishment to which he may be liable under any other law, be liable to the penalty mentioned against that offence in column 3.

      (2)  The sections referred to in column 4 of the said Table shall be deemed to be meant for illustrative purposes only and the corresponding offence described in column 2 may fall and be prosecuted under other sections of this Act as well.

 

Table

S. No.

Offences

Penalties

Section

1

2

3

4

1.

Any person who is required to apply for registration under this Act fails to make an application for registration before providing any taxable services

Such person shall be liable to pay a penalty of [11][fifty thousand] rupees or five percent of the amount of the tax he would have been liable to pay had he been registered, whichever is higher.

In the case of non-compliance of compulsory registration, the minimum penalty shall be [12][fifty thousand] rupees:

If such person who is required to get himself registered under this Act, fails to get registered within ninety days of providing taxable services, he shall be further liable, upon conviction by a Special Judge, to imprisonment for a term which may extend to one year, or with fine which may extend to the amount of the tax he would have been liable to pay had he been registered, or with both.

 

25

2.

Where any person fails to furnish a return within the due date.

Such person shall be liable to pay a penalty of five thousand rupees provided if a return is not filed within fifteen days of the due date, a penalty of hundred rupees for each day of default shall be levied.

 

35

3.

Where any person fails to deposit the amount of the tax due or any part thereof in the time or manner laid down under this Act or the rules.

(a)   Such person shall be liable to pay a penalty of ten thousand rupees or five percent of the tax payable for that period, whichever is higher.

(b)   If the amount of the tax due is not paid even after the expiry of a period of sixty days of issuance of the notice for such payment by an officer, not below the rank of Assistant Commissioner, the person shall be further liable, upon conviction by a Special Judge, to imprisonment for a term which may extend to three years, or with fine which may extend to the amount of the unpaid tax, or with both.

(c)   No penalty shall be levied if any miscalculation is made for the first time during a year.

 

3, 4, 10, 11, 17, 18 and 68

4.

Any person who fails to maintain records required under the Act or the rules.

Such person shall pay a penalty of ten thousand rupees or five percent of the total tax payable for the tax period for which he has failed to maintain the required record, whichever is higher.

 

30, 31 and 32

5.

Where a registered person who, without any reasonable cause, in non-compliance with the provisions of this Act fails to produce records on receipt of a notice from the Authority or any officer of the Authority directing him to produce such records.

Where such a person is a company, it shall be liable to pay a penalty of ten thousand rupees.

Where such person is not a company, he shall be liable to pay a penalty of five thousand rupees.

Where such person fails to produce the record within sixty days of receipt of a notice, he shall be liable to pay the penalty prescribed for the offence at serial No.4 above.

 

30, 32, 53 and 57

6.

Any person who knowingly or fraudulently–

(a)   submits a false or forged document to any officer of the Authority; or

(b)   destroys, alters, mutilates or falsifies the records; or

(c)   makes a false statement, false declaration, false representation, false personification, or gives any false information.

 

Such person shall be liable to pay a penalty of twenty five thousand rupees or one hundred percent of the tax payable for the tax period to which the offence relates, whichever is higher.

Such person shall further be liable, upon conviction by a Special Judge, to imprisonment for a term which may extend to five years or with fine which may extend to an amount equal to the tax payable for the tax period to which the offence relates, or with both.

General

7.

Where any person who denies or obstructs the access of an authorized officer to the business premises, registered office or to any other place where records are kept, or otherwise refuses access to accounts or records.

Such person shall be liable to pay a penalty of twenty five thousand rupees or one hundred percent of the tax payable for the tax period to which the offence relates, whichever is higher.

Such persons shall, further be liable, upon conviction by a Special Judge, to imprisonment for a term which may extend to five years, or with a fine which may extend to an amount equal to the tax payable for the tax period to which the offence relates, or with both.

 

31, 32 and 56

8.

Where any person commits, causes to commit or attempts to commit tax fraud, or abets or connives in the commission of tax fraud equal to twenty five thousand rupees or more.

Such person shall be liable to pay a penalty of up to five hundred thousand rupees, but not less than twenty five thousand rupees, or one hundred percent of the tax payable for the tax period to which the offence relates, whichever is higher.

Such person shall, further be liable, upon conviction by a Special Judge, to imprisonment for a term which may extend to five years, or with fine which may extend to an amount equal to the tax payable for the tax period to which the offence relates, or with both.

 

2(43)

9.

Where any person violates any embargo placed on providing of service in connection with recovery of the tax.

Such person shall be liable to pay a penalty of twenty five thousand rupees or ten percent of the amount of the tax sought to be recovered, whichever is higher.

Such person shall, further be liable, upon conviction by a Special Judge, to imprisonment for a term which may extend to one year, or with fine which may extend to amount equal to the amount of the tax sought to be recovered, or with both.

 

70

10.

Where any person obstructs any officer of the Authority in the performance of his official duties under this Act or the rules.

Such person shall be liable to pay a penalty of twenty five thousand rupees or one hundred percent of the tax payable for the tax period to which the offence relates, whichever is higher.

Such person shall be further liable, upon conviction by a Special Judge, to imprisonment for a term which may extend to one year or with fine not exceeding fifty thousand rupees or with both [13][:]

[14][Provided that where any recipient of a service does not pay the amount of tax due to be paid to a service provider, such recipient shall also be liable to action for obstruction under this provision.]

General

11.

Where any person who fails to fulfill any of the conditions, limitations or restrictions prescribed in a notification issued under any of the provisions of the Act or the rules.

 

Such person shall be liable to pay a penalty of five thousand rupees or three percent of the tax payable for the tax period to which the offence relates, whichever is higher.

General

12.

Where any person who contravenes any provision of this Act or the rules for which no penalty has specifically been provided in this section.

 

Such person shall be liable to pay a penalty of ten thousand rupees or three percent of the tax payable for the tax period to which the offence relates, whichever is higher.

General

13.

Where any person repeats an offence for which a penalty is provided under this Act.

 

Such person shall be liable to pay twice the amount of penalty provided under the Act for the said offence.

General

14.

Where any person–

(a)   knowingly and without lawful authority gains access to or attempts to gain access to the computerized system; or

(b)   unauthorizedly uses or discloses or publishes or otherwise disseminates information obtained from the computerized system; or

(c)   falsifies any record or information stored in the computerized system; or

(d)   knowingly or dishonestly damages or impairs the computerized system; or

(e)   knowingly or dishonestly damages or impairs any duplicate tape or disc or other medium on which any information obtained from the computerized system is kept or stored; or

(f)    unauthorizedly uses unique user identifier of any other registered user to authenticate a transmission of information to the computerized system; or

(g)   fails to comply with or contravenes any of the conditions prescribed for security of unique user identifier.

Such person shall pay a penalty of twenty five thousand rupees or one hundred percent of the amount equal to the loss caused to the tax revenue.

Such person shall further be liable, upon conviction by the Special Judge, to imprisonment for a term which may extend to one year, or with fine which may extend to an amount equal to the loss caused to the tax revenue, or with both.

General

 

49. Default surcharge.– (1) Notwithstanding the provisions of section 24, if a registered person does not pay the tax due or any part thereof, whether willfully or otherwise, on time or in the manner specified under this Act, rules or notifications or procedures issued thereunder, he shall, in addition to the tax due and any penalty under section 48, pay default surcharge at the rate mentioned below:-

      (a)  the person liable to pay any amount of tax or charge shall pay default surcharge at the rate of inter-bank rate plus three percent per annum of the amount of the tax due; and

      (b)  in case, the default is on account of tax fraud, the person who has committed tax fraud shall pay default surcharge at the rate of two percent per month, of the amount of tax evaded, till such time the entire liability including the amount of default surcharge is paid.

      (2)  For the purpose of calculation of default surcharge, the period of default shall be reckoned from the sixteenth day following the due date of the tax period to which the default relates, to the day preceding the date on which the tax due is actually paid.

      Explanation: For purposes of this section, the tax due does not include the amount of penalty.

 

50. Exemption from penalty and default surcharge.– The Government may, by a notification in the official Gazette, exempt any registered person or any taxable service from payment of the whole or any part of the penalty and default surcharge subject to such conditions and limitations as may be specified.

 

51. Compounding of offences.– Notwithstanding anything contained in any other provision of this Act, where any person has committed any offence warranting prosecution under the Act, the Authority may, either before or after the institution of any proceedings for the prosecution of such offence, compound the offence and terminate the proceedings if such person pays the amount of the tax due along with such default surcharge and penalty as is determined by the Authority under the provisions of this Act and the rules.

 

52. Recovery of tax not levied or short-levied.– (1) Where by reason of inadvertence, error, misconstruction or for any other reason, any tax or charge has not been levied or has been short levied, the person liable to pay such amount of the tax or charge shall be served with a notice, within [15][five years] of the relevant tax period requiring him to show cause for payment of the amount specified in the notice.

      (2)  Where by reason of some collusion, abetment, deliberate attempt, mis-statement, fraud, forgery, false or fake documents–

            (a)  any tax or charge has not been paid or is, short paid, the person liable to pay such tax shall be served with a notice within five years of relevant tax period, requiring him to show cause for non-payment of such tax; and

            (b)  any amount of the tax is refunded which is not due, the person obtaining such refund shall be served with a notice within five years of the receipt of such refund to show cause for recovery of such refund.

      (3)  The officer shall, after considering the objections of the person served with a notice under sub-sections (1) or (2) or if the objections are not received within the stipulated period, determine the amount of the tax or charge payable by him and such person shall pay the amount so determined.

      (4)  Any order under sub-section (3) shall be made within one hundred and twenty days of issuance of the notice to show cause or within such extended period as the officer may, for reasons to be recorded in writing, fix provided that such extended period shall not ordinarily exceed sixty days.

      (5)  In computing the period specified in sub-section (4), any period during which the proceedings are adjourned on account of a stay order or proceedings under section 69 or the time taken through adjournments by the petitioner not exceeding thirty days shall be excluded.

 

53. Power to summon persons to give evidence and produce documents.– (1) An officer may summon any person whose attendance he considers necessary either to tender evidence or to produce documents or any other thing in any audit, inquiry, investigation or proceedings which such officer is making for any of the purposes of this Act and the rules.

      (2)  Any person summoned under sub-section (1) shall be bound to attend either in person or by an authorized agent, as the officer may direct.

      (3)  Notwithstanding anything in sub-sections (1) and (2), a person who is exempt from personal appearance in a Court under sections 132 and 133 of the Code of Civil Procedure 1908 (V of 1908), shall not be required to appear in person.

      (4)  Any proceedings under this Act or the rules before an officer shall be deemed to be judicial proceedings within the meaning of sections 193 and 228 of the Pakistan Penal Code 1860 (XLV of 1860).

 

54. Power to arrest and prosecute.– (1) An officer authorized by the Authority by notification in the official Gazette in this behalf, who on the basis of material evidence has reasonable cause to believe that any person has committed a tax fraud or any offence warranting prosecution under this Act, may cause arrest of such person.

      (2)  All arrests made under this Act shall be carried out in accordance with the relevant provisions of the Code of Criminal Procedure, 1898 (V of 1898).

      (3)  Where the person suspected of tax fraud or any offence warranting prosecution under this Act is a company, every director or officer of that company whom the officer has reason to believe is personally responsible for actions of the company contributing to the tax fraud or any offence warranting prosecution under this Act shall be liable to arrest provided that such arrest shall not absolve the company from the liabilities of payment of the tax, default surcharge and any penalty imposed or due under this Act.

 

55. Procedure to be followed on arrest of a person.– (1) When an officer arrests a person under section 54, he shall immediately intimate the fact of arrest of that person to the Special Judge who may direct such officer to produce that person at such time and place and on such date as the Special Judge considers expedient.

      (2)  Notwithstanding anything contained in sub-section (1), any person arrested under this Act shall be produced before the Special Judge or, if there is no Special Judge within a reasonable distance, to the nearest Magistrate within twenty-four hours of such arrest, excluding the time necessary for the journey from the place of arrest to the court of the Special Judge or of the Magistrate.

      (3)  When any person is produced under sub-section (2) before the Special Judge, the Special Judge may, on the request of such person, after perusing the record, if any and after giving the prosecution an opportunity of being heard, admit him to bail on his executing a bond, with or without sureties, or refuse to admit him to bail and direct his detention at such place as he deems fit.

      (4)  Nothing contained herein shall preclude the Special Judge from cancelling the bail of any such person at a subsequent stage if, for any reason, he considers such cancellation necessary, but before passing such order he shall afford such person an opportunity of being heard, unless for reasons to be recorded he considers that the affording of such opportunity shall defeat the purpose of this Act.

      (5)  When such person is produced under sub-section (2) before a Magistrate, such Magistrate may, after authorizing his detention in such custody at such place and for such period as he considers necessary or proper for facilitating his earliest production before the Special Judge, direct his production before the Special Judge on a date and time to be fixed by him or direct such person to be forthwith taken to, and produced before the Special Judge and he shall be so taken or produced.

      (6)  Nothing in sub-sections (2), (3) and (4) shall preclude the Special Judge or the Magistrate from remanding any such person to the custody of the officer holding an inquiry or investigation against that person if such officer makes a request in writing to that effect, and the Special Judge or the Magistrate, after perusing the record, if any, and hearing such person, is of the opinion that for the completion of inquiry or investigation it is necessary to make such order but the total period of such custody shall not exceed fourteen days.

      (7)  When any person is arrested under this Act, the arresting officer shall record the fact of arrest and other relevant particulars in the register specified in sub-section (11) and shall immediately proceed to inquire into the charge against such person and if he completes the inquiry within twenty-four hours of his arrest, and he may, after producing such person before the Special Judge or the Magistrate, make a request for his further detention in his custody.

      (8)  While holding an inquiry under sub-section (7), the officer shall exercise the same powers as are conferred upon or exercisable by an officer incharge of a police station under the Code of Criminal Procedure, 1898 (V of 1898), but such officer shall exercise such powers subject to the foregoing provisions of this section while holding an inquiry under this Act.

      (9)  If the officer, after holding an inquiry, is of the opinion that there is no sufficient evidence or reasonable ground for suspicion against such person, he shall release him on his executing a bond, with or without sureties, and shall direct such person to appear, as and when required, before the Special Judge, and make a report to the Special Judge for the discharge of such person and shall make a full report of the case to his immediate superior.

      (10)   The Special Judge to whom a report has been made under sub-section (8) may, after the perusal of record of the inquiry, and hearing the prosecution, agree with such report and discharge the accused or, if he is of the opinion that there is sufficient ground for proceedings against such person, proceed with his trial and direct the prosecution to produce evidence.

      (11)   The officer holding an inquiry under this section shall maintain a register to be called register of arrests and detentions in the form prescribed by the Government in which he shall enter the name and other particulars of every person arrested under this Act, together with the time and date of arrest, the details of the information received, the details of things, goods or documents, recovered from his custody, the name of the witnesses and the explanation, if any, given by him and the manner in which the inquiry has been conducted from day to day; and, such register or authenticated copies of its entries shall be produced before the Special Judge, whenever it is directed by the Special Judge.

      (12)   After completing the inquiry, the officer shall, as early as possible, submit to the Special Judge a complaint in the same form and manner in which the officer incharge of a police station submits a report before a Court.

      (13)   Any Magistrate of the first class may record any statement or confession during inquiry or investigations under this Act in accordance with the provisions of section 164 of the Code of Criminal Procedure, 1898 (V of 1898).

 

56. Authorized officers to have access to premises, stocks, accounts and records.– (1) Any officer, authorized in this behalf by the Authority by notification in the official Gazette, shall have free and full access to the business premises, registered office or any other place where any business records or documents required under this Act and the rules are kept or maintained by any registered person or a person liable for registration or whose business activities are covered under this Act and the rules or who may be required for any inquiry or investigation in any tax fraud committed by him or his agent or any other person; and such officer may, at any time, inspect the records, data, documents, correspondence, accounts, statements, utility bills, bank statements, information regarding nature and sources of funds or assets with which his business is financed, and any other records or documents, including those which are required under any other law maintained in any form or mode and may take into his custody such records, statements, diskettes or documents, in original or copies, in such form as the officer may deem fit against a signed receipt.

      (2)  The registered person, his agent or any other person specified in sub-section (1), shall answer any question or furnish such information or explanation as may be asked by the authorized officer.

      (3)  All other Government departments, local bodies, autonomous bodies, corporations or such other institutions shall supply requisite information and render necessary assistance to the authorized officer in the course of inquiry or investigation under this section.

 

57. Obligation to produce documents and provide information.– (1) Notwithstanding anything contained in this Act or any other law, any person required to maintain any record under this Act and the rules, shall, on demand by an officer, not below the rank of an Assistant Commissioner, by notice in writing, as and when specified in the notice–

      (a)  produce for examination, such documents or records which the officer considers necessary or relevant to the audit, inquiry or investigation under this Act;

      (b)  allow the officer to take extracts from or make copies of such documents or records; and

      (c)  appear before the officer and answer any question put to him concerning the documents and records relating to the audit, inquiry or investigation referred to in clause (a).

      (2)  An officer conducting an audit, inquiry or an investigation under the Act and the rules, may require in writing any person, department, company or organization to furnish such information as is held by that person, department, company or organization, which, in the opinion of the officer, is relevant to such audit, inquiry or investigation.

      (3)  The Authority may require, in writing, any person, department, company or organization, to provide any information or data held by that person, department, company or organization, which, in the opinion of the Authority, is required for purposes of formulation of policy or administering or implementing this Act and the rules.

      (4)  Every person, department, company or organization shall furnish the information requisitioned by the Authority or the officer under sub-sections (2) or (3), within the time specified in the notice issued by the Authority.

 

58. Searches under warrants.– (1) Where any officer has reason to believe that any documents or things which in his opinion, may be useful for, or relevant to, any proceedings under this Act are kept in any place, he may after obtaining a warrant from the Magistrate or from the Commissioner, enter that place and cause a search to be made at any time.

      (2)  All searches made under sub-section (1) shall be carried out in accordance with the relevant provisions of the Code of Criminal Procedure, 1898 (V of 1898).

 

59. Posting of an officer to business premises.– (1) Subject to such conditions and restrictions as it deems fit to impose, the Authority may post an officer to the premises of a registered person to monitor the provision of services by such registered person.

      (2)  Notwithstanding anything contained in sub-section (1), if a Commissioner, on the basis of material evidence, has reasonable cause to believe that a registered person is involved in evasion of the tax or tax fraud, he may, by recording the grounds in writing, post an officer of the Authority to the premises of such registered person to monitor provision of services by such person.

      (3)  A person to whose premises, an officer of the Authority is posted under this section, shall provide on his own cost, all facilities required to meet the departmental requirements of such posting as determined by the Authority or the Commissioner.

 

60. Powers of adjudication.– (1) In respect of cases involving determination of tax liability, assessment of the tax, charging of default surcharge, imposition of penalty and recovery of amount erroneously refunded or any other contravention or violation including tax fraud under this Act or the rules, the jurisdiction and powers of adjudication of the officers shall be as follows:-

      (a)  Additional Commissioner: Cases without any restriction as to the amount of the tax involved or amount erroneously refunded;

      (b)  Deputy Commissioner: Cases where the amount of the tax involved or the amount erroneously refunded exceeds one million rupees, but does not exceed two and a half million rupees;

      (c)  Assistant Commissioner: Cases where the amount of the tax involved or the amount erroneously refunded does not exceed one million rupees; and

      (d) other officers of the Authority: Such cases, other than those mentioned above, as may be prescribed.

      (2)  The Commissioner may adjudicate any case falling in the jurisdiction and powers of any officer subordinate to him and appeal against the order passed by the Commissioner in such case shall lie to the Appellate Tribunal.

      (3)  The Authority may regulate the system of adjudication including transfer of cases and extension of time limit.

      Explanation: For purposes of this section, the tax means the principal amount of the tax other than default surcharge and in case where only default surcharge is involved, the amount of default surcharge.

 

61. Revision by the Commissioner.– (1) The Commissioner may, of his own motion or on an application made in writing by a registered person for revision, call for and examine the record of any proceedings under this Act in which an order has been passed by an officer subordinate to him.

      (2)  If after examining the record under sub-section (1), the Commissioner is not satisfied with the legality or propriety of any order passed by an officer, the Commissioner may make such revision to the order as he may think fit.

      (3)  No order imposing or enhancing any penalty or fine requiring payment of a greater amount of the tax than the originally levied amount shall be passed unless the person affected by such order has been given an opportunity of showing cause and of being heard.

      (4)  The Commissioner shall not revise any order under sub-section (2) if–

            (a)  an appeal under section 63 is pending or the matter has been referred for resolution under section 69;

            (b)  where an appeal against the order lies under section 63, the time within which such appeal can be made has not expired or the person has not waived in writing his right of appeal;

            (c)  in the case of an application made by a person, the application has not been made within ninety days of the date on which such order was served on the person, unless the Commissioner is satisfied that the person was prevented by sufficient cause from making the application within the time allowed; and

            (d) in the case where the Commissioner has on his own motion called for and examined an order passed by a subordinate officer, more than five years have lapsed from the date of the original order.

      (5)  No application for revision of an assessment shall be made under sub-section (1) unless the amount of the tax due under the assessment, as is not in dispute, has been paid by the taxpayer.

 

62. Revision by the Authority.– (1) The Authority may, of its own motion, call for and examine the record of any departmental proceedings under this Act or the rules for the purpose of satisfying itself as to the legality or propriety of any decision or order passed therein by an officer.

      (2)  If after examining the record under sub-section (1), the Authority is not satisfied with the legality or propriety of any decision or order passed by an officer, it may pass such order as it may think fit.

      (3)  No order imposing or enhancing any penalty or fine requiring payment of a greater amount of the tax than the originally levied amount shall be passed unless the person affected by such order has been given an opportunity of showing cause and of being heard.

      (4)  No proceeding under this section shall be initiated in a case where an appeal under section 66 is pending or the matter has been referred for resolution under section 69.

      (5)  No order shall be made under this section after the expiry of five years from the date of the original decision or order of the subordinate officer referred to in sub-section (1).


Chapter IX

Appeals

63. Appeals.– (1) Any person, other than the Authority or any of its employees, aggrieved by any decision or order passed under section 60 by an officer of the Authority other than Commissioner may, within thirty days of the date of receipt of such decision or order, prefer an appeal to the Commissioner (Appeals).

      (2)  An appeal under sub-section (1) shall–

            (a)  be in the prescribed form;

            (b)  be verified in the prescribed manner;

            (c)  state precisely the grounds upon which the appeal is made;

            (d) be accompanied by the fee specified in sub-section (3); and

            (e)  be lodged with the Commissioner (Appeals) within the time set out in sub-section (4).

      (3)  The prescribed fee shall be–

            (a)  where the appellant is a company, one thousand rupees; or

            (b)  where the appellant is not a company, two hundred rupees.

      (4)  An appeal shall be preferred to the Commissioner (Appeals) within thirty days of the receipt of the decision or order passed under section 60.

      (5)  The Commissioner (Appeals) may, upon application in writing by the appellant, admit an appeal after the expiration of the period specified in sub-section (4) if the Commissioner (Appeals) is satisfied that the appellant was prevented by sufficient cause from lodging the appeal within that period.

 

64. Procedure in appeal.– (1) The Commissioner (Appeals) shall give notice of the day fixed for the hearing of the appeal to the appellant and to the officer of the Authority against whose order the appeal has been made.

      (2)  The Commissioner (Appeals) may adjourn the hearing of the appeal from time to time.

      (3)  The Commissioner (Appeals) may, before the hearing of an appeal, allow the appellant to file any new ground of appeal not specified in the grounds of appeal already filed by the appellant where the Commissioner (Appeals) is satisfied that the omission of the ground from the form of the appeal was not willful or unreasonable.

      (4)  The Commissioner (Appeals) may stay the recovery of any tax due by virtue of the decision or order being appealed against and any such order made by the Commissioner (Appeals) shall remain operative for not more than fifteen days during which period a notice shall be issued to the respondent and after hearing the parties, the order staying recovery may be confirmed, varied or vacated as the Commissioner (Appeals) deems fit but the stay order so confirmed or varied shall remain operative for not more than sixty days, including any period for which the recovery may have been stayed prior to the confirmation or variation of the stay order.

      (5)  The Commissioner (Appeals) may, before disposing of an appeal, call for such particulars, documents, records or information as the Commissioner (Appeals) may require respecting the matters arising in the appeal or cause further inquiry to be made by the officer of the Authority.

 

65. Decision in appeal.– (1) In disposing of an appeal lodged under section 63, the Commissioner (Appeals) may pass such order as he thinks fit, confirming, varying, altering, setting aside or annulling the decision or order appealed against.

      (2)  In deciding an appeal, the Commissioner (Appeals) may make such further inquiry as may be necessary provided that he shall not remand the case for de novo consideration.

      (3)  The Commissioner (Appeals) shall not increase the amount of any tax payable by the appellant unless the appellant has been given an opportunity of showing cause against such increase.

      (4)  The Commissioner (Appeals) shall communicate his order to the appellant and the Authority.

      (5)  An order passed by the Commissioner (Appeals) under sub-section (1) shall be passed not later than one hundred and twenty days from the date of filing of appeal or within such extended period, not exceeding sixty days, as the Commissioner (Appeals) may, for reasons to be recorded in writing, fix.

      (6)  In computing the aforesaid time period, any period during which the proceedings are adjourned on account of a stay order or proceedings under section 69 or the time taken through adjournments by the appellant shall be excluded.

      (7)  Where the Commissioner (Appeals) has not made an order under sub-section (1) before the expiration of one hundred and eighty days from the end of the month in which the appeal was lodged, the Commissioner (Appeals) shall transfer his appeal to the Appellate Tribunal and the Tribunal shall decide the appeal under this Act as if it has been filed against the order of the Commissioner (Appeals).

      (8)  While transferring the undecided appeal to the Appellate Tribunal, the Commissioner (Appeals) shall attach his comprehensive report explaining the circumstances and reasons due to which the appeal could not be decided within time.

      (9)  For purposes of sub-section (5), any period during which the hearing of an appeal is adjourned on the request of the appellant shall be excluded in the computation of the period mentioned in the sub-section.

 

66. Appeal to the Appellate Tribunal.– (1) Where the taxpayer or the officer not below the rank of Additional Commissioner objects to any order passed by the Commissioner (Appeals), including an order under sub-section (4) of section 64, the taxpayer or the officer may appeal to the Appellate Tribunal against such order.

      (2)  An appeal under sub-section (1) shall be–

            (a)  in the prescribed form;

            (b)  verified in the prescribed manner;

            (c)  accompanied, except in case of an appeal preferred by an officer by the fee specified in sub-section (3); and

            (d) preferred to the Appellate Tribunal within sixty days of the date of receipt of the order of the Commissioner (Appeals) by the taxpayer or the officer.

      (3)  The fee for an appeal shall be two thousand rupees.

      (4)  The Appellate Tribunal may, upon application in writing, admit an appeal after the expiration of the period specified in clause (d) of sub-section (2) if it is satisfied that the person appealing was prevented by sufficient cause from filing the appeal within that period.

 

67. Disposal of appeals by the Appellate Tribunal.– (1) The Appellate Tribunal may, before disposing of an appeal, call for such particulars, documents, records or information as it may require in respect of the matters arising from the appeal or cause further inquiry to be made by the officer of the Authority.

      (2)  The Appellate Tribunal shall afford an opportunity of being heard to the parties to the appeal and, in case of default by any of the parties on the date of hearing, the Tribunal may, if it deems fit, dismiss the appeal in default, or may proceed ex-parte to decide the appeal on the basis of the available record but the Appellate Tribunal shall decide the appeal within six months from the date of filing of the appeal.

      (3)  The Appellate Tribunal may stay the recovery of any tax due by virtue of the decision or order being appealed against and any such order made by the Appellate Tribunal shall remain operative for no more than thirty days during which period a notice shall be issued to the respondent and after hearing the parties, the order staying recovery may be confirmed, varied or vacated as the Appellate Tribunal deems fit but the stay order so confirmed or varied shall remain operative for not more than ninety days including any period for which the recovery may have been stayed prior to the confirmation or variation of the stay order.

      (4)  In deciding the appeal, the Appellate Tribunal may, without prejudice to the powers specified in sub-section (2), make an order to–

            (a)  affirm, modify or annul the order being appealed against; or

            (b)  remand the case to the officer or the Commissioner (Appeals) for making such inquiry or taking such action as the Tribunal may direct.

      (5)  The Appellate Tribunal shall not increase the amount of any tax payable, penalty or default surcharge unless the taxpayer has been given a reasonable opportunity of showing cause against such increase.

      (6)  The Appellate Tribunal shall communicate its order to the taxpayer and the Commissioner.

      (7)  Save as provided in any other law, the decision of the Appellate Tribunal on an appeal shall be final.

 

68. Deposit of the tax demand while appeal is pending.– Where in any appeal, the decision or order appealed against relates to any tax demanded under this Act, the person who has filed the appeal shall, pending the appeal, deposit the admitted amount of the tax based on the return filed under section 35 or as may be determined by the Commissioner (Appeals) or the Appellate Tribunal where such return has not been filed.

 

69. Alternate dispute resolution.– (1) Notwithstanding any other provisions of this Act or the rules, any registered person aggrieved in connection with any dispute pertaining to–

      (a)  the liability of the tax against the registered person;

      (b)  the extent of waiver of default surcharge and penalty;

      (c)  relaxation of any procedural or technical irregularities and condonation of any prescribed time limitation; and

      (d) any other specific relief required to resolve the dispute, may apply to the Authority for the appointment of a committee for the resolution of any dispute mentioned in detail in the application.

      (2)  Notwithstanding anything contained in sub-section (1), the Authority shall not accept an application under sub-section (1) where criminal proceedings have been initiated or where the Authority is of the opinion that the interpretation of a question of law having a larger impact on revenue or on a number of similar cases is involved.

      (3)  The Authority may, after examination of the application of a registered person, appoint a committee of not less than three persons within thirty days of receipt of such application, consisting of an officer of the Authority not below the rank of an Additional Commissioner and nominees from the notified panel consisting of chartered or cost accountants, advocates, representatives of trade bodies or associations, retired officers of the rank of not less than BS-20, retired judges, or any other reputable taxpayers, for the resolution of the dispute.

      (4)  The committee constituted under sub-section (3) shall examine the issue and may, if it deems fit, conduct an inquiry, seek expert opinions, direct any officer of the Authority or any other person to conduct an audit and shall make recommendations to the Authority within ninety days of its constitution in respect of the dispute.

      (5)  If the committee fails to make recommendations within the said period, the Authority may dissolve the committee and constitute a new committee which shall decide the matter within a further period of ninety days and even if after the expiry of that period the dispute is not resolved, the matter shall be taken up before the appropriate forum provided under this Act for decision.

      (6)  The Authority may, on the recommendation of the committee, pass such order, as it may deem appropriate within forty-five days of the receipt of the recommendations of the committee.

      (7)  The registered person may make payment of the tax as determined by the Authority in its order under sub-section (6), and such order of the Authority shall be submitted before the forum, Appellate Tribunal or the Court where the matter is pending adjudication for consideration of orders as deemed appropriate.

 

Chapter X

Recovery of Arrears

70. Recovery of arrears of tax.– (1) Subject to sub-section (2), where any amount of the tax is due from any person, the officer of the Authority may–

      (a)  deduct the amount from any money owing to the person from whom such amount is recoverable and which may be at the disposal or in the control of such officer or any officer of the Authority;

      (b)  require by a notice in writing any person who holds or may subsequently hold any money for or on account of the person from whom tax is recoverable to pay to such officer the amount specified in the notice;

      (c)  require by a notice in writing any bank to attach that person’s bank accounts;

      (d) seal the person’s business premises till such time as the amount of the tax is paid or recovered in full;

      (e)  attach and sell or sell without attachment any movable or immovable property of the person from whom the tax is due; and

      (f)  recover such amount by attachment and sale of any movable or immovable property of the guarantor, person, company, bank or financial institution where a guarantor or any other person, company, bank or financial institution fails to make payment under such guarantee, bond or instrument.

      (2)  If any arrears of tax, default surcharge, penalty or any other amount which is payable by any person cannot be recovered in any manner whatsoever, the Authority or the Commissioner if so authorized by the Authority, may for reasons to be recorded in writing write off the arrears or amount in the manner in the prescribed manner.

      [16][(3)    For the purpose of recovery of tax, penalty or any other demand or sum under this Act or the rules, the Authority or the officer of the Authority may exercise the powers of a Civil Court under the Code of Civil Procedure, 1908 (V of 1908) for recovery of an amount due under a decree and, in such an eventuality, the Authority or the officer of the Authority shall be deemed to be a Civil Court.]

 

Chapter XI

Agents, Representatives and E-intermediaries

71. Agent.– (1) For purposes of this Act and subject to sub-sections (2) and (3), the expression ‘agent’ in respect of a registered person, means–

      (a)  where the person is an individual under a legal disability, the guardian or manager who receives or is entitled to receive income, financial gains or benefits, funds, money or property on behalf, or for the benefit of, the individual;

      (b)  where the person is a company (other than a Trust, a Provincial Government, or local authority in Pakistan), a director or a manager or secretary or accountant or any similar officer of the company;

      (c)  where the person is a Trust declared by a duly executed instrument in writing, whether testamentary or otherwise, any trustee of the trust;

      (d) where the person is a Provincial Government, or local authority in Pakistan, any individual responsible for accounting for the receipt and payment of money or funds on behalf of the Provincial Government or the local authority;

      (e)  where the person is an association of persons, a director or a manager or secretary or accountant or any similar officer of the association or, in the case of a firm, any partner in the firm;

      (f)  where the person is the Federal Government, any individual responsible for accounting for the receipt and payment of moneys or funds on behalf of the Federal Government; or

      (g)  where the person is a public international organization, or a foreign government or political sub-division of a foreign government, any individual responsible for accounting for the receipt and payment of moneys or funds in Pakistan on behalf of the organization, government, or political subdivision of the government; or

      (h)  when any person is expressly or impliedly authorized by a registered person to be his agent for all or any of the purposes of this Act.

      (2)  Where Court of Wards, Administrator General, Official Trustee, or any receiver or manager appointed by, or under any order of a Court receives or is entitled to receive income on behalf, or for the benefit of any person, such Court of Wards, Administrator General, Official Trustee, receiver or manager shall be the agent of the person for purposes of this Act.

      (3)  Notwithstanding anything in this section, any registered person may expressly or impliedly authorize another person to be his agent for all or any of the purposes this Act.

 

72. Liability and obligations of agents.– (1) Every agent of a person shall be responsible for performing any duties or obligations imposed by or under this Act and the rules on the person, including the payment of the tax.

      (2)  Subject to sub-section (5) of this section, the tax that by virtue of sub-section (1), is payable by an agent of a registered person shall be recoverable from the agent only to the extent of any assets of the registered person that are in the possession or under the control of the agent.

      (3)  Every agent of a registered person who pays any tax owing to the registered person shall be entitled to recover the amount so paid from the registered person or to retain the amount so paid out of any moneys of the registered person that are in the agent’s possession or under the agent’s control.

      (4)  Any agent, or any person who apprehends that he may be assessed as an agent, may retain out of any money payable by him to the person on whose behalf he is liable to pay the tax (hereinafter in this section referred to as the ‘principal’), a sum equal to his estimated liability under this Act, and in the event of disagreement between the principal and such an agent or a person as to the amount to be so retained, such agent or person may obtain from the Commissioner a certificate stating the amount to be so retained pending final determination of the tax liability and the certificate so obtained shall be his conclusive authority for retaining that amount.

      (5)  Every agent shall be personally liable for the payment of any tax due by the agent if, while the amount remains unpaid, the agent–

            (a)  alienates, charges or disposes of any moneys received or accrued in respect of which the tax is payable; or

            (b)  disposes of or parts with any moneys or funds belonging to the registered person that is in the possession of the agent or which comes to the agent after the tax is payable, if such tax could legally have been paid from or out of such moneys or funds.

      (6)  Nothing in this section shall relieve any person from performing any duties imposed by or under this Act on the person which the agent of the person has failed to perform.

 

73. Liability of the registered person for the acts of his agent.– A registered person shall be responsible for any and all acts done by his agent.

 

74. Appearance by authorized representative.– A registered person required to appear before the Appellate Tribunal or an officer in connection with any proceedings under this Act may, in writing, authorize any person having such qualification as may be prescribed by the Authority, to represent him or appear on his behalf.

 

75. E-intermediaries to be appointed.– (1) Subject to such conditions, limitations and restrictions as the Authority may impose, the Authority may, by a notification in the official Gazette, appoint a person as e-intermediary to electronically file returns and other electronic documents under this Act and the rules on behalf of a registered person.

      (2)  A registered person may authorize an e-intermediary to electronically file returns or any other documents on his behalf as specified in sub-section (1).

      (3)  The return or such other documents filed by an e-intermediary on behalf of a registered person shall be deemed to have been filed by that registered person.

      (4)  Where this Act requires anything to be done by a registered person and if such thing is done by an e-intermediary authorized by the registered person under sub-section (2), unless the contrary is proved, such thing shall be deemed to have been done with the knowledge and consent of the registered person so that in any proceedings under this Act, the registered person shall be liable as if the thing has been done by him.

      (5)  Where an e-intermediary, authorized by a registered person under sub-section (2) to act on his behalf, knowingly or willfully submits false or incorrect information or document or declaration with an intent to avoid payment of the tax due or any part thereof, such e-intermediary shall be jointly and severally responsible for recovery of the amount of tax short paid as a result of such incorrect or false information or document or declaration, without prejudice to any other action that may be taken against him or the registered person under the relevant provisions of the law.

      (6)  The Authority may, by notification in the official Gazette, prescribe rules for the conduct and transaction of business of e-intermediaries, including their appointment, suspension and cancellation of appointment, subject to such conditions and restrictions as specified in such rules.

 

Chapter XII

General Administration

76. Power to make rules.– (1) The Authority may, with the approval of the Government and by notification in the official Gazette, make the rules for carrying out the purposes of any of the provisions of this Act.

      (2)  All rules made under sub-section (1) during a financial year shall be laid in Provincial Assembly of the Punjab at the time of presentation of the Annual Budget for the next financial year.

      (3)  The rules made under this Act shall be collected, arranged and published along with general orders and departmental instructions, directions, notifications and rulings, if any, at appropriate intervals and sold to the public at a reasonable price.

 

77. Computerized system.– (1) The Authority may prescribe the use of a computerized system for carrying out the purposes of this Act and the rules including the receipt of applications for registration, returns and such other declarations or information required to be provided under this Act and the rules from such date and for such registered persons or class of persons as the Authority may, by notification in the official Gazette, specify.

      (2)  The Authority may regulate the conduct and transaction of business in relation to the submission of returns or other information to the Authority by the persons required to transmit or receive any information through the computerized system, including matters such as the grant of authorization, suspension and cancellation of authorization and for security of the information transmitted or received through the computerized system.

      (3)  The information received in the computerized system from or on behalf of any registered person shall, for all official and legal purposes, be deemed to have been furnished by and received from such registered person.

      (4)  The business information gathered through computerized system shall be confidential to be used only for official and legal purposes and no unauthorized person shall claim or be provided any access to such information.

 

78. Service of orders and decisions.– (1) Subject to this Act, any notice, order or requisition required to be served on an individual for the purposes of this Act shall be treated as properly served on the individual if–

      (a)  personally served on the individual or, in the case of an individual under a legal disability the agent of the individual;

      (b)  sent by registered post or courier service to the individual’s usual or last known address in Pakistan; or

      (c)  served on the individual in the manner prescribed for service of a summons under the Code of Civil Procedure, 1908 (V of 1908).

      (2)  Subject to this Act, any notice order or requisition required to be served on any person, other than an individual to whom sub-section (1) applies, for the purposes of this Act, shall be treated as properly served on the person if–

            (a)  personally served on the agent of the person;

            (b)  sent by registered post or courier service to the person’s registered office or address for service of notices under this Act in Pakistan or where the person does not have such office or address, the notice is sent by registered post to any office or place of business of the person in Pakistan; or

            (c)  served in the manner prescribed for service of a summons under the Code of Civil Procedure, 1908 (V of 1908).

      (3)  Where an association of persons is dissolved, any notice, order or requisition required to be served under this Act, on the association or a member of the association may be served on any person who was the principal officer or a member of the association immediately before such dissolution.

      (4)  Where a business stands discontinued, any notice order or requisition required to be served under this Act, on the person discontinuing the business may be served on the person personally or on any individual who was the person’s agent at the time of discontinuance.

      (5)  The validity of any notice issued under this Act or the validity of any service of a notice shall not be called into question after the notice has been complied with in any manner.

      (6)  Any registered person may indicate, in the manner prescribed by the Authority, that he wishes to electronically receive all or specific communications, including notifications, orders, assessments and requisitions from the Authority, the Appellate Tribunal or any officer of the Authority.

      (7)  The Authority may, by notification in the official Gazette, direct that all or specific communications, including notifications, orders, assessments and requisitions from the Authority, the Appellate Tribunal or any officer to a specific registered person or class of registered persons shall be made electronically.

      (8)  For purposes of sub-sections (6) and (7), a registered person shall be considered to have received the electronic communication within seventy two hours of the sending of the electronic communication by the Authority, Appellate Tribunal or the officer of the Authority.

      (9)  For purposes of sub-sections (6), (7) and (8), an electronic communication includes a communication sent by email.

 

79. Correction of clerical errors.– (1) Any clerical or arithmetical error in any assessment, adjudication order or decision may, at any time, be corrected by the officer of the Authority who made the assessment or adjudication or passed such order or decision or by his successor in office, through an order made under this section.

      (2)  Before any correction is made under sub-section (1), a notice shall be given to the registered person likely to be affected by such correction.

 

80. Issuance of duplicate of the tax documents.– An officer of the Authority not below the rank of the Assistant Commissioner may, on payment of one hundred rupees, issue an attested copy of any document filed by a registered person with the Authority.

 

81. Power to issue orders, instructions and directions.– The Authority may issue such orders, instructions and directions, not inconsistent with this Act and the rules, to all officers of the Authority, as it may deem necessary to implement, administer or enforce the provisions of this Act and the rules.

 

82. Officers of the Authority to follow orders.– (1) All officers of the Authority and other persons employed in the administration of this Act and the rules shall observe and follow the orders, instructions and directions of the Authority.

      (2)  No such orders, instructions or directions shall be given so as to interfere with the powers or discretion of officers of the Authority in the exercise of their judicial or quasi-judicial functions.

 

Chapter XIII

Miscellaneous

83. Computation of limitation period.– In computing the period of limitation prescribed for any appeal or application under this Act, the day on which the order complained of was served and, if the concerned person was not furnished with a copy of the order, the time requisite for obtaining a copy of such order shall be excluded.

 

84. Condonation of time-limit.– (1) Where any time or period has been specified under any of the provisions of the Act or the rules within which any act or thing, including submission of an application, filing of a return or payment of tax, is to be done, the Authority may permit such application to be made or such act or thing to be done within such time or period as it may consider appropriate.

      (2)  The Authority may, by notification in the official Gazette, and subject to such limitations or conditions as may be specified therein, empower any Commissioner or the officer of the Authority to exercise the powers under this section in any case or class of cases.

 

85. Bar of suits, prosecution and other legal proceedings.– (1) No suit shall be brought in any civil court to set aside or modify any order passed, any assessment made, any tax levied, any penalty or default surcharge imposed or collection of any tax made under this Act.

      (2)  No suit, prosecution or other legal proceeding shall lie against the Government or against any public servant in respect of any order passed in good faith under this Act.

      (3)  Notwithstanding anything in any other law, no investigation or inquiry shall be undertaken or initiated by any government agency against any officer or official for anything done in his official capacity under this Act, except with the permission of the Authority.

 

86. Removal of difficulties.– (1) The Government may pass such order for removing any difficulty or for bringing the provisions of this Act into effective operation direct that provisions of this Act shall, during such period as may be specified in the order, have effect subject to such adaptations whether by way of modification or addition or omission as it may deem to be necessary or expedient.

      (2)  The power under this section shall not be exercised after the expiry of two years from the commencement of this Act.

 

87. Repeal and savings.– (1) The Punjab Sales Tax Ordinance, 2000 (II of 2000) is hereby repealed.

      (2)  Any proceeding under the repealed Ordinance pending on the date notified under sub-section (3) of section 1 before any authority, forum or any court by way of adjudication, assessment, appeal, reference, revision or prosecution shall be continued and disposed of as if this Act has not come into force.

      (3)  Where the Government or the Authority takes any action, makes any decision or orders, issues any instructions, directions, clarifications or notifications in pursuance of or in exercising of powers conferred under any provision of any law in respect of any matter relating to the tax and allied issues covered under this Act or the rules, such actions, decisions, orders, instructions, directions, clarifications and notifications shall be deemed to have been validly issued to serve the purposes of this Act and the rules.

      (4)  Where so directed by the Government, any tax payable but not paid under the Punjab Sales Tax Ordinance, 2000 (II of 2000) may be recovered under this Act, but without prejudice to any action already taken for the recovery of the amount under the said Ordinance.


First Schedule

(Classification of Services)

(See sub-section (38) of Section 2)

Classification

(1)

Description

(2)

98.01

Services provided by hotels, restaurants, marriage halls, lawns, clubs and caterers.

9801.1000

Services provided by hotels

9801.2000

Services provided by restaurants

9801.3000

Services provided by marriage halls and lawns

9801.4000

Services provided by clubs

9801.5000

Services provided by caterers, suppliers of food and drinks

9801.6000

Ancillary services provided by hotels, restaurants, marriage halls, lawns, caterers

9801.7000

Services provided by messes and hostels

9801.9000

Other

98.02

Advertisements

9802.1000

Advertisements on T.V.

9802.2000

Advertisements on radio

9802.3000

Advertisements on closed circuit T.V.

9802.4000

Advertisements in newspapers and periodicals

9802.5000

Advertisements on cable T.V. network

 

Advertisements on poles

 

Advertisements on bill boards

9802.9000

Other

98.03

Facilities for travel

9803.1000

Travel by air of passengers within the territorial jurisdiction of Pakistan

9803.1100

Travel by air of passengers embarking on international journey from Pakistan

9803.2000

Domestic travel by train

9803.2100

International travel by train

9803.9000

Other

98.04

Services provided for inland carriage of goods.

9804.1000

Carriage of goods by air

9804.2000

Carriage of goods by train

9804.9000

Other

98.05

Services provided by persons authorized to transact business on behalf of others.

9805.1000

Shipping agents

9805.2000

Stevedores

9805.2100

Ship management service

9805.3000

Freight forwarding agents

9805.4000

Customs agents

9805.5000

Travel agents

9805.5100

Tour operators

9805.6000

Recruiting agents

9805.7000

Advertising agents

9805.8000

Ship chandlers

9805.9000

Share transfer agent

9805.9100

Sponsorship services

9805.9200

Business support services

9805.9090

Other

98.06

Services provided in matters of hire.

9806.1000

Purchase or sale of moveable or immovable goods or property

9806.2000

Property dealers

9806.3000

Car/automobiles dealers

9806.9000

Dealers of second hand goods other than automobiles other

9807.0000

Services provided by property developers and promoters.

9808.0000

Courier services

9809.0000

Services provided by persons engaged in contractual execution of work or furnishing supplies.

9810.0000

Services provided for personal care by beauty parlors/clinics, slimming clinics and others.

9811.0000

Services provided by laundries, dry cleaners.

98.12

Telecommunication services.

9812.1000

Telephone services

9812.1100

Fixed line voice telephone service

9812.1200

Wireless telephone

9812.1210

Cellular telephone

9812.1220

Wireless Local Loop telephone

9812.1300

Video telephone

9812.1400

Payphone cards

9812.1500

Prepaid calling cards

9812.1600

Voice mail service

9812.1700

Messaging service

9812.1710

Short Message service (SMS)

9812.1720

Multimedia message service (MMS)

9812.1910

Shifting of telephone connection

9812.1920

Installation of telephone extension

9812.1930

Provision of telephone extension

9812.1940

Changing of telephone connection

9812.1950

Conversion of NWD connection to non NWD or vice versa

9812.1960

Cost of telephone set

9812.1970

Restoration of telephone connection

9812.1990

Others

9812.2000

Bandwidth services

9812.2100

Copper line based

9812.2200

Fibre-optic based

9812.2300

Co-axial cable based

9812.2400

Microwave based

9812.2500

Satellite based

9812.2900

Others

9812.3000

Telegraph

9812.4000

Telex

9812.5000

Telefax

9812.5010

Store and forward fax services

9812.5090

Others

9812.6000

Internet services

9812.6100

Internet services including email services

9812.6110

Dial-up internet services

9812.6120

Broadband services for DSL connection

9812.6121

Copper line based

9812.6122

Fibre-optic based

9812.6123

Co-axial cable based

9812.6124

Wireless based

9812.6125

Satellite based

9812.6129

Others

9812.6130

Internet/email/Data/SMS/MMS services on WLL networks

9812.6140

Internet/email/Data/SMS/MMS services on cellular mobile networks

9812.6190

Others

9812.6200

Data Communication Network services (DCNS)

9812.6210

Copper Line based

9812.6220

Co-axial cable based

9812.6230

Fibre-optic based

9812.6240

Wireless/Radio based

9812.6250

Satellite based

9812.6290

Others

9812.6300

Value added data services

9812.6310

Virtual private Network services (VPN)

9812.6320

Digital Signature service

9812.6390

Others

9812.9000

Audio text services

9812.9100

Tele-text services

9812.9200

Trunk radio services

9812.9300

Paging services

9812.9400

Voice paging services

9812.9410

Radio paging services

9812.9490

Vehicle tracking services

9812.9500

Burglar alarm services

9812.9090

Others

98.13

Services provided by banking companies, insurance companies, cooperative financing societies modarbas, musharikas, leasing companies, foreign exchange dealers, non-banking financial institutions and other persons dealing in any such services.

9813.1000

Services provided in respect of insurance to a policy holder by an insurer, including a reinsure.

9813.1100

Goods insurance

9813.1200

Fire insurance

9813.1300

Theft insurance

9813.1400

Marine insurance

9813.1500

Life insurance

9813.1600

Other insurance

9813.2000

Services provided in respect of advances and loans

9813.3000

Services provided in respect of leasing

9813.3010

Financial leasing

9813.3020

Commodity or equipment leasing

9813.3030

Hire-purchase leasing

9813.3090

Other

9813.3900

Services provided in respect of musharika financing

9813.4000

Services provided by banking companies in relation to:

9813.4100

Guarantee

9813.4200

Brokerage

9813.4300

Letter of credit

9813.4400

Issuance of pay order and demand draft

9813.4500

Bill of exchange

9813.4600

Transfer of money including telegraphic transfer, mail transfer and electronic transfer

9813.4700

Bank guarantee

9813.4800

Bill discounting commission

9813.4900

Safe deposit lockers

9813.4910

Safe vaults

9813.5000

Issuance,, processing and operation of credit and debit cards

9813.6000

Commission and brokerage of foreign exchange dealings

9813.7000

Automated Teller Machine operations, maintenance and management

9813.8000

Service provided as banker to an issue

9813.8100

Other

9813.9000

Service provided by a foreign exchange dealer or exchange company or money changer

98.14

Services provided by architects, town planners, contractors, property developers or promoters, interior decorators.

9814.1000

Architects or town planners

9814.2000

Contractors of building (including water supply, gas supply and sanitary works), roads and bridges, electrical and mechanical works (including air conditioning), horticultural works, multi-discipline works (including turn-key projects) and similar other works.

9814.3000

Property developers or promoters

9814.4000

Landscape designers

9814.9000

Other

98.15

Services provided by professionals and consultants etc.

9815.1000

Medical practitioners and consultants

9815.2000

Legal practitioners and consultants

9815.3000

Accountants and auditors

9815.4000

Management consultants

9815.5000

Technical, scientific, engineering consultants

9815.6000

Software or IT based system development consultants

9815.9000

Other consultants

9816.0000

Services provided by pathological laboratories.

98.17

Services provided by medical diagnostic laboratories including X-Rays, CT Scan, M.R. Imaging etc.

9817.1000

Scientific laboratories

9817.2000

Mechanical laboratories

9817.3000

Chemical laboratories

9817.4000

Electrical or electronic laboratories

9817.9000

Other such laboratories

98.18

Services provided by specialized agencies.

9818.1000

Security agency

9818.2000

Credit rating agency

9818.3000

Market research agency

9818.9000

Other such agencies

98.19

Services provided by specified persons or businesses

9819.1000

Stockbrokers

9819.1100

Under writers

9819.1200

Indenters

9819.1300

Commission agents

9819.1400

Packers

9819.2000

Money exchanger

9819.3000

Rent a car

9819.4000

Prize bond dealers

9819.5000

Surveyors

9819.6000

Designers

9819.7000

Outdoor photographer

9819.8000

Art painter

9819.9000

Cable TV operators

9819.9100

Auctioneers

9819.9200

Public relations services

9819.9300

Management consultants

9819.9400

Technical testing and analysis service

9819.9500

Service provided by a registrar to an issue

9819.9090

Others

98.20

Services provided by specialized workshops or undertakings

9820.1000

Auto-workshops

9820.2000

Workshops for industrial machinery construction and earth-moving machinery or other special purpose machinery etc.

9820.3000

Workshops for electric or electronic equipments or appliances etc. including computer hardware

9820.4000

Car washing or similar service stations

9820.9000

Other workshops

98.21

Services provided in specified fields.

9821.1000

Healthcare center, gyms or physical fitness center etc.

9821.2000

Indoor sports and games center

9821.3000

Baby care center

9821.4000

Body massage center

9821.5000

Pedicure center

98.22

Services provided for specified purposes.

9822.1000

Fumigation services

9822.2000

Maintenance or cleaning services

9822.3000

Janitorial services

9822.4000

Dredging or desilting services

9822.9000

Other similar services

9823.0000

Franchise services

9824.0000

Construction services

9825.0000

Consultancy services

9826.0000

Management services including fund and asset management services

9827.0000

Market research agencies

9828.0000

Program producers

9829.0000

Brokerage (other than stock) and indenting services

9830.0000

Race Clubs

9831.0000

General insurance agents

9832.0000

Exhibition or convention services

9833.0000

Data processing and provision of information, services of engineers, handling and storage of goods

9834.0000

Fashion designers

9835.0000

Cable operators

9836.0000

Internet café

9837.0000

Pandal and shamiana service

9838.0000

Airport services

9839.0000

Intellectual property services

9840.0000

Forward contract services

9841.0000

Packaging services

9842.0000

Services provided in matters of hire

9843.0000

Purchase or sale of moveable or immovable goods or property

9844.0000

Property dealers and realtors

9845.0000

Automobile dealers

9846.0000

Dealers of second hand goods other than automobiles

9847.0000

Cosmetic and plastic surgery

9848.0000

Beauty parlor and beauty clinics

9849.0000

HR consultants

9850.0000

Corporate law consultants

9851.0000

Tax consultants

9852.0000

Human resources & personnel development services

9853.0000

Coaching centers

9854.0000

Vocational centers

9855.0000

Actuarial services

9856.0000

Training services

9857.0000

Tracking services

9858.0000

Security alarm services

9859.0000

Human resource development

9860.0000

Building maintenance and service provider

9861.0000

Quality control services (ISO certification authority)

9862.0000

Services provided by motels, guest houses and farm houses.

9863.0000

Debt collection agencies

9864.0000

Amusement parks

9865.0000

Call centres

9866.0000

Film and drama studios including mobile stage shows or cinemas

9867.0000

Entertainment services

9868.0000

Services provided in respect of manufacturing or processing on toll basis.

 


[17]Second Schedule

(Taxable Services)

(See Section 3)

S.No.

Description

Classification

Rate of Tax

(1)

(2)

(3)

(4)

1

Services provided by hotels, [18][motels, guest houses, marriage halls and lawns (by whatever name called) including pandal and shamiana services,] clubs [19][including race clubs] and caterers.

[20][9801.1000, 9801.3000, 9801.4000, 9801.5000, 9801.6000, [21][9830.0000] 9837.6000 and 9862.0000]

 

Sixteen percent

2

Advertisement on television and radio, excluding advertisements–

(a)    sponsored by an agency of the Federal or Provincial Government for health education;

(b)   financed out of funds provided by a Government under grant-in-aid agreement; and

(c)    conveying public service message, if telecast on television by the World Wide Fund for Nature (WWF) or United Nations Children’s Fund (UNICEF).

9802.1000 and

9802.2000

 

Sixteen percent

3

Services provided by persons authorized to transact business on behalf of others–

(a) customs agents;

(b) ship chandlers; and

(c) stevedores.

9805.4000

9805.8000 and

9805.2000

 

Sixteen percent


4

Courier services [22][including cargo services by road passenger transportation businesses and transportation through pipeline and conduit services.]

9808.0000 [23][and 9804.9000]

Sixteen percent

5

Advertisement on a cable television.

9802.5000

Sixteen percent

6

Telecommunication services–

(a)    telephone services;

(b)   fixed line voice telephone service;

(c)    wireless telephone;

(d)   cellular telephone;

(e)    wireless local loop telephone;

(f)    video telephone;

(g)   payphone cards;

(h)   pre-paid calling cards;

(i)    voice mail service;

(j)    messaging service;

(k)   short message service (SMS);

(l)    multimedia message service (MMS);

(m)  bandwidth services used for voice and video telecommunication services–

        (i)    copper line based;

        (ii)   fiber-optic based;

        (iii)  co-axial cable based;

        (iv)  microwave based;

        (v)   satellite based;

(n)   telegraph;

(o)   telex;

(p)   telefax;

(q)   store and forward fax services;

(r)    audio-text services;

(s)    tele-text services;

(t)    trunk radio services;

(u)   paging services;

(v)   voice paging services;

(w)  radio paging services;

(x)   vehicle [24][and other] tracking services; and

(y)   burglar [25][and security] alarm services;

EXCLUDING:

(a)    internet services whether dialup or broadband including email services, data communication network services (DCNS) and value added data services.

(b)   Such charges payable on the international leased lines or bandwidth services used by–

         i.     software exporting firms registered with the Pakistan software exporting board; and

         ii.    data and internet service providers licensed by the Pakistan Telecommunication Authority.

[26][(c)        * * * * * * *]

98.12

[27][9857.0000, 9858.0000]

Nineteen and a half percent


7

Services provided in respect of insurance to a policy holder by an insurer, including a re-insurer–

(a) goods insurance;

(b) fire insurance;

(c) theft insurance;

(d) marine insurance; and

(e) other insurance.

EXCLUDING:

(a)    Marine insurance for export;

(b)   Life insurance;

(c)    Health insurance; and

(d)   Crop insurance.

98.13

 

Sixteen percent of the gross premium paid

8

[28][Services provided by banking companies, cooperative financing societies, modarbas, musharikas, ijarahs, leasing companies, non-banking financial institutions and other persons, businesses or enterprises providing or dealing in any such services.]

98.13

Sixteen percent

9

Services provided by the stock brokers.

9819.1000

Sixteen percent

10

Services provided by shipping agents

9805.1000

Sixteen percent

[29][11

* * * * * *]

 

 

[30][11

Services provided by restaurants [31][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

[32][9801.9000]

Sixteen percent]

[33][12

Advertisements on hoarding boards, pole signs and sign boards and on closed circuit TV, Website or internet

[34][9802.3000, 9802.6000

9802.7000 and 9802.9000]

Sixteen percent]

[35][13

Franchise service [36][including intellectual property rights services].

9823.0000

[37][9839.0000]

Sixteen percent]

[38][14

Construction services

EXCLUDING:

(i) Construction projects (industrial and commercial) of the value (excluding actual and documented cost of land) not exceeding Rs. 50 million [39][per annum].

(ii) The cases where sales tax is otherwise paid as property developers or promoters.

(iii) Government civil works including Cantonment Boards.

(iv) Construction of industrial zones, consular buildings and other

organizations exempt from income tax.

(v) Construction work under international tenders against foreign grants-in-aid.

(vi) Residential construction projects where the covered area does not exceed 10,000 square feet for houses and 20,000 square feet for apartments.

9824.0000 and 9814.2000

[40][Sixteen percent]

15

Services provided by property developers and promoters (including allied services)

EXCLUDING:

Actual purchase value or documented cost of land.

9807.0000 and Respective sub-headings of heading 98.14

[41][(i)        @ Rs.100 per square yard for land development; and

(ii)   @Rs.50 per-square feet for building construction.]

16

Services provided by persons engaged in contractual execution of work or furnishing supplies.

EXCLUDING:

(i) Annual total value of the contractual works or supplies does not exceed Rs. 50 million.

(ii) The contracts involving printing or supplies of books.

9809.0000

Sixteen percent

17

[42][*    *    *    *    *    *    *    *    *    *

*   *   *   *

*   *   *   *]

18

Services provided for personal care by beauty parlors, clinics, sliming clinics including cosmetic and plastic surgery by such parlors/clinics.

EXCLUDING:

(i) if beauty parlor or clinic is not a corporate or chain business; or

(ii) no aspect of the business is trade marked or franchised; or

(iii) annual turnover does not exceed Rs. 3.6 million; or

[43][(iv) the facility of air-conditioning is not installed or available in the premises.]

9810.0000

9848.0000

9847.0000

9821.4000 and 9821.5000

Sixteen percent

19

Management consultancy services including fund and asset [44][(including investment)] managements services.

9815.4000 and 9826.0000

Sixteen percent

20

Services provided by port operators (including airports and dryports) and allied services provided at ports and services provided by terminal operators including services in respect of public bonded warehouses.

EXCLUDING:

The amounts received by way of fee under any law or by-law.

9838.0000 and respective headings

Sixteen percent

21

Freight forwarding agents.

9805.3000

Rs. 400 per bill of lading]

[45][22

Services provided by software or IT-based system development consultants

9815.6000

Sixteen percent

23

Services provided by technical, scientific & engineering consultants [46][including technical inspection and certification services, quality control (standards’ certification), technical analysis and testing, erection, commissioning and installation services].

9815.5000

9819.4000

[47][9861.0000, 9815.5000]

Sixteen percent

24

Services provided by other consultants [48][including but not limited to human resource and personnel development services, exhibition or convention services, event management services, valuation services (including competency and eligibility testing services), market research services and credit rating services].

9815.9000

[49][9832.0000, 9827.0000, 9818.3000, 9818.2000, 9819.9300, 9852.0000, 9859.0000]

Sixteen percent

25

Services provided by tour operators [50][and travel agents including all their allied services or facilities] (other than Hajj and Urnrah).

9805.5100

[51][9805.5000, 9803.9000]

Sixteen percent

 

26

Manpower recruitment agents [52][including labour and manpower supplies].

9805.6000

Sixteen percent

27

Services provided by security agency

9818.1000

Sixteen percent

28

Services provided in respect of mining of minerals, oil & gas including related surveys and allied activities.

--

Sixteen percent

29

Services provided by advertising agents

9805.7000

Sixteen percent

30

[53][Share transfer or depository agents including services provided through manual or electronic book-entry system used to record and maintain securities and to register the transfer of shares, securities and derivatives.]

[54][respective headings]

Sixteen percent

31

Services provided by business support services.

9805.9200

Sixteen percent

32

Services provided by property dealers [55][and realtors].

9806.2000, [56][9844.0000]

Sixteen percent

33

Services provided by fashion designers [57][whether relating to textile, leather, jewellery or other product regimes  including allied services such as cutting, stitching, printing, manufacturing, fabrication, assembly, embellishment, adornments, display (including marketing, packing and delivery etc.).]

9834.0000, [58][9819.6000]

Sixteen percent

34

Services provided by architects, town planners and interior decorators.

9814.1000

9814.9000

Sixteen percent

35

Services provided in respect of rent-a-car

9819.3000

Sixteen percent

36

Services provided by car/automobile dealers.

9806.3000 [59][and 9845.0000]

Sixteen percent

37

Services provided in respect of manufacturing or processing on toll or job basis (against processing on conversion charges) [60][including industrial and commercial packaging services and similar outsourcing of industrial or commercial processes].

9868.0000

[61][9841.0000 and 9819.1400]

Sixteen percent]

[62][38

Services provided by specialized workshops or undertakings (auto-workshops; workshops for industrial machinery, construction and earth-moving machinery or other special purpose machinery etc; workshops for electric or electronic equipments or appliances etc. including computer hardware; car washing or similar service stations and other workshops).

98.20

Sixteen percent

39

Services provided for specified purposes including fumigation services, maintenance and repair (including building and equipment maintenance and repair including after sale services) or cleaning services, janitorial services, dredging or desilting services and other similar services etc.

98.22 and 9860.0000

Sixteen percent

40

Brokerage (other than stock) and indenting services including commission agents, under-writers and auctioneers.

9829.0000, 9819.1200, 9819.1100, 9819.1300 and 9819.9100

Sixteen percent

41

Call centres.

9865.0000

Nineteen and a half percent

42

Services provided by laboratories other than services relating to pathological or diagnostic tests for patients.

9816.0000 and 98.17

Sixteen percent

43

Services provided in specified fields such as health care, gym, physical fitness, indoor sports, games and body or sauna massage etc.

9821.1000 and 9821.2000

9821.4000

Sixteen percent

44

Services provided by laundries and dry cleaners.

9811.0000

Sixteen percent

45

Services provided by cable TV operators.

9819.9000

Sixteen percent

46

Services provided by TV or radio program producers or production houses.

9828.0000

Sixteen percent

47

Advertisements (including classified ads) in newspapers, magazines, journals and periodicals.

9802.4000

Five percent]

 



[1]This Act was passed by the Punjab Assembly on 21 June 2012; assented to by the Governor of the Punjab on 26 June 2012; and, was published in the Punjab Gazette (Extraordinary), dated 27 June 2012, pages 41901-35.

[2]Substituted for the words “any law”, by the Punjab Finance Act 2014 (XVII of 2014).

[3] Inserted by the Punjab Finance Act 2014 (XVII of 2014).

[4] Inserted by the Punjab Finance Act 2014 (XVII of 2014).

[5] Inserted by the Punjab Finance Act 2014 (XVII of 2014).

[6] Inserted by the Punjab Finance Act 2014 (XVII of 2014).

[7] Inserted by the Punjab Finance Act 2014 (XVII of 2014).

[8] Inserted by the Punjab Finance Act 2014 (XVII of 2014).

[9] Inserted by the Punjab Finance Act 2014 (XVII of 2014).

[10] Inserted by the Punjab Finance Act 2014 (XVII of 2014).

[11] Substituted for the words “ten thousand”, by the Punjab Finance Act 2014 (XVII of 2014).

[12] Substituted for the words “ten thousand”, by the Punjab Finance Act 2014 (XVII of 2014).

[13]Substituted for the full-stop by the Punjab Finance Act 2014 (XVII of 2014).

[14]Proviso inserted by the Punjab Finance Act 2014 (XVII of 2014).

[15] Substituted for the words “three years”, by the Punjab Finance Act 2014 (XVII of 2014).

[16] Inserted by the Punjab Finance Act 2014 (XVII of 2014).

[17] Under section 5 of this Act, the Government may, by notification in the official Gazette, make an amendment in Second Schedule. In the original Act, Second Schedule contained entries till Sr. No. 11 and the entries from Sr No. 12 to Sr No. 37 were subsequently added through various notifications issued by the Finance Department, Government of the Punjab.

[18] Added by the Finance Department’s Notification No. SO (TAX) 1-1/201314 dated May 22, 2013, published in the Punjab Weekly Gazette dated June 5, 2013, pp.1886-87.

[19] Inserted by the Punjab Finance Act 2014 (XVII of 2014).

[20] Substituted by the Finance Department’s Notification No. SO (TAX) 1-1/201314 dated May 22, 2013, published in the Punjab Weekly Gazette dated June 5, 2013, pp.1886-87.

[21] Inserted by the Punjab Finance Act 2014 (XVII of 2014).

[22] Inserted by the Punjab Finance Act 2014 (XVII of 2014).

[23] Inserted by the Punjab Finance Act 2014 (XVII of 2014).

[24] Added by the Finance Department’s Notification No. SO (TAX) 1-1/201314 dated May 22, 2013, published in the Punjab Weekly Gazette dated June 5, 2013, pp.1886-87.

[25] Added by the Finance Department’s Notification No. SO (TAX) 1-1/201314 dated May 22, 2013, published in the Punjab Weekly Gazette dated June 5, 2013, pp.1886-87.

[26] Deleted by the Finance Department’s Notification No. SO (TAX) 1-1/201314 dated May 22, 2013, published in the Punjab Weekly Gazette dated June 5, 2013, pp.1886-87; the deleted entry read as under:

“(c)       Such amounts received by the Long Distance International license holders including Pakistan Telecommunication Company Limited on International incoming calls under agreements with the foreign telecommunication companies.”

[27] Please see Second Schedule appended to Finance Department’s Letter No. SO(TAX) 1-2/97 (withholding), dated July 18, 2014.

[28] Substituted for “Services provided by Banking Companies or Non-Banking Financial Institutions including but not limited to all non-interest based services provided against a consideration in form or a fee or commission or charge” by the Punjab Finance Act 2014 (XVII of 2014).

[29] Original entry at Sr. No. 11 “Any other service notified by the Provincial Government in the official Gazette” omitted by the Finance Department’s Notification No.SO (TAX)1-9/2011 dated October 6, 2012; published in the Punjab Weekly Gazette dated October 17, 2012, p.662.

[30] Inserted as new Sr. No.11 (after omitting original Sr. No.11) by the Finance Department’s Notification No.SO (TAX)1-9/2011 dated October 6, 2012; published in the Punjab Weekly Gazette dated October 17, 2012, p.662.

[31] Please see Second Schedule appended to Finance Department’s Letter No. SO(TAX) 1-2/97 (withholding), dated July 18, 2014.

[32] Please see Second Schedule appended to Finance Department’s Letter No. SO(TAX) 1-2/97 (withholding), dated July 18, 2014.

[33] Entry at Sr No.12 was substituted by the Finance Department’s Notification No.SO (TAX)1-2/97 (Pt.VII) dated January 16, 2013; published in the Punjab Weekly Gazette dated January 23, 2013, p.1290; this entry had been inserted by the Finance Department’s Notification No.SO (TAX)1-9/2011 dated October 6, 2012; published in the Punjab Weekly Gazette dated October 17, 2012, p.662 and read as under::

        Advertisements on hoarding boards, pole signs and sign boards

        and on newspapers and periodicals other than classified                 Respective                                        Sixteen percent”

        advertisements.closed circuit TV, Website or Internet

[34] Please see Second Schedule appended to Finance Department’s Letter No. SO(TAX) 1-2/97 (withholding), dated July 18, 2014.

[35] Inserted by the Finance Department’s Notification No.SO (TAX)1-9/2011 dated October 6, 2012; published in the Punjab Weekly Gazette dated October 17, 2012, p.662.

[36] Please see Second Schedule appended to Finance Department’s Letter No. SO(TAX) 1-2/97 (withholding), dated July 18, 2014.

[37] Please see Second Schedule appended to Finance Department’s Letter No. SO(TAX) 1-2/97 (withholding), dated July 18, 2014.

[38] Entries from Sr No.14 to Sr. No. 21 added by the Finance Department’s Notification No. SO (TAX) 1-1/201314 dated May 22, 2013, published in the Punjab Weekly Gazette dated June 5, 2013, pp.1886-87.

[39] Inserted by the Punjab Finance Act 2014 (XVII of 2014).

[40] Substituted by the Finance Department’s Notification No. SO (TAX) 1-1/2013-14 dated February 12, 2014.

[41] Substituted by the Finance Department’ Notification No. SO (TAX) 1-1/2013-14 dated February 12, 2014.

[42] Deleted by the Finance Department’s Notification No. SO (TAX) 1-1/2013-14 dated May 13, 2014.

[43] Substituted for “(iv) annual electricity bills of the business do not exceed Rs. 600,000/-” by the Punjab Finance Act 2014 (XVII of 2014).

[44] Inserted by the Punjab Finance Act 2014 (XVII of 2014).

[45] Entries from Sr No.22 to Sr. No. 37 added by the Finance Department’s Notification No. SO (TAX)1-2/97 (Pt.VIII) dated July 1, 2013.

[46] Inserted by the Punjab Finance Act 2014 (XVII of 2014).

[47] Inserted by the Punjab Finance Act 2014 (XVII of 2014).

[48] Inserted by the Punjab Finance Act 2014 (XVII of 2014).

[49] Inserted by the Punjab Finance Act 2014 (XVII of 2014).

[50] Inserted by the Punjab Finance Act 2014 (XVII of 2014).

[51] Inserted by the Punjab Finance Act 2014 (XVII of 2014).

[52] Inserted by the Punjab Finance Act 2014 (XVII of 2014).

[53] Substituted for “Services provided by share transfer agents”, by the Punjab Finance Act 2014 (XVII of 2014).

[54] Substituted for the figures “9805.9000”, by the Punjab Finance Act 2014 (XVII of 2014).

[55] Inserted by the Punjab Finance Act 2014 (XVII of 2014).

[56] Inserted by the Punjab Finance Act 2014 (XVII of 2014).

[57] Inserted by the Punjab Finance Act 2014 (XVII of 2014).

[58] Inserted by the Punjab Finance Act 2014 (XVII of 2014).

[59] Inserted by the Punjab Finance Act 2014 (XVII of 2014).

[60] Inserted by the Punjab Finance Act 2014 (XVII of 2014).

[61] Inserted by the Punjab Finance Act 2014 (XVII of 2014).

[62] Entries from Sr No 38 to Sr No 47 inserted by the Punjab Finance Act 2014 (XVII of 2014).