Balochistan Revenue Authority

What is the effective date of the enforcement of the Act?

Provision of Sales Tax on Services Act applies from July 01, 2015.

Who is authorized to administer the Sales Tax on Services in Province?

"Balochistan Revenue Authority" is authorized to administer the Sales Tax on Services.

What is Sales Tax on Service? Is it an indirect Tax?

Sales Tax on Services is an indirect levy. This tax is applicable to services specified in Second Schedule on "taxable services"

What is the rate of Sales Tax on Services?

Rate of Sales Tax on Services is 15% except telecommunication whereon it is 19.5% on the "value of taxable services".

Who is liable to pay Sales Tax on Services to the Government?

The person who provides the taxable service is responsible for collection and paying the Sales Tax on Services to the Government.

Is there a concept of resident and non-resident under the Act?

Concept of resident is given in sub-section (2) of Section 33. It is different from the definition given in the Income Tax Ordinance, 2001.

How do you describe the expression, "person" appearing in the definitions of taxable service?

The expression refers to any natural, legal or juristic person and includes individuals, AOP, companies, Federal Government, Provincial Government, Local Government, Foreign Government etc.

What is the procedure for registration?

A prospective taxable service provider seeking registration should file an application in a prescribed form BST-01 (online) within thirty days from the date of notification of the taxable service. The Authority is required to issue the Provisional Registration Certificate within three working days online for a period of three months. However, final Certificate would be issued after being satisfied about registered person’s e-filing of returns and e-deposit of tax not later than 30 days from the date of issuance of provisional registration certificate.

Would non-profit organizations and association of persons like clubs, provincial bodies, trade associations engaged in carrying out economic activity be required to register for sales tax purposes?

Yes. All such organizations or associations will qualify as persons engaged in economic activities unless specifically exempted.

Whether a service provider can make payment of Sales Tax on Services and file return before the grant of registration by the proper officer?

Yes. A service provider can pay tax and file return immediately after applying for registration.

Would a service provided in Balochistan by a Foreign Service Provider in Balochistan be liable for payment of tax under the Act?

Yes, tax is payable on all taxable services rendered in Balochistan, whether rendered/provided by a person resident in Balochistan or otherwise.

Is there any penal provision for non-registration?

Yes. Any offence for non-registration will attract a mandatory penalty under sub-section (1) of section 48.

How and where to pay Sales Tax on Services?

The Sales Tax on Services is required to be paid in Challan Form BST-04 in the authorized branches of National Bank. The list of such National Bank Branches is placed on the website of BRA. Head of account "B-02387 - Balochistan Sales Tax on Services" has been specified for payment of sales tax on services. While making the payment of sales tax to the credit of Provincial Government, head of account should be correctly and properly indicated under major and minor heads and sub-heads to avoid misclassification.

Whether sales tax on service deposited by the assessee in non-designated bank will amount to non-payment of tax?

Yes. For payment of sales tax on services, specific National Bank branches will receive it. If sales tax on services is deposited in a branch of Bank other than National Bank, it also amounts to non-payment of tax.

What is the date of payment of Sales Tax on Services? Is it the date on which the cheque for the same is deposited / tendered in the designated Bank or the date on which the amount is credited?

The date on which tax is credited shall be the date of payment. If the cheque bounces, it would mean as if the tax has not been paid and the necessary penal consequences would follow.

Is the amount for the Sales Tax on Services charged from the client compulsorily to be indicated separately in the Bills/Invoices raised on him?

The service provider has to separately show the billing amount of Sales Tax on Services in the Invoice/Bill on the basis of taxable value of services rendered, especially so, if he requires to avail the input credit scheme.

Can the Authority or authorized Officer ask for more information than what assessee is submitting to it in the return or a tax invoice?

Yes, if required. The Authority or authorized officer can always ask for additional information.

What are the precautions to be taken by the assessee while depositing the Sales Tax on Services?

The following measures should be taken by the assessee at the time of making payment: Service Tax should be paid within the time limit laid down in this regard. It should be deposited in the specified branches of the National Bank designated for this purpose. The major head and sub-head relating to the service provided by the assessee should be correctly filled in the Challan. In case of delay in making payment of sales tax on services in time, the default surcharge is also required to be paid.

Will the existing Sales Tax law on Services under the Balochistan Sales Tax Ordinance, 2000 and Federal Excise Duty under the Federal Excise Act, 2005 be repealed?

For Balochistan, Sales Tax on Services Ordinance, 2000 will be repealed. The services being taxed under FED mode shall now be taxed under the Balochistan Sales Tax Act, 2015, to the extent of Balochistan's jurisdiction.

Is the sales tax charged on services adjustable against sales tax suffered on the acquisition of goods and services?

Section 16 and rules made thereunder provides for input tax adjustment, where such services are used in providing taxable services, subject to restrictions provided or adjustment mechanism.

What is the point of taxation i.e. the advance received for taxable services although no services have yet been provided? If advance has been received prior to the services provided? If services are provided subsequent to the enforcement of the Act, would such services be taxable?

Sub-section (2) of Section 18 provides that a taxable service shall be considered to have been provided in the tax period during which: it was provided to the recipient;

Are there any zero rated services?

No zero rating is provided on the services.

Is there an exemption threshold?

Section 12 provides for exemption, specified rate or reduced rate on case to case basis.

Are there any exempt services?

All services outside of Second Schedule are exempt.

Services often include charges for reimbursement of expenses incurred on behalf of the recipient (like custom duties and other charges paid by customs agent, out of pocket expenses incurred on behalf of the clients by professionals, cost of materials paid by an advertising agent, cost of airline ticket paid by a travel agent etc.), would these be subject to sales tax?

The expense payable to others acting as an agent of the principal would not generally form subject matter of tax. The details are provided in the rules.

Is the Sales Tax based on self-assessment?

Yes. Sales tax on services originates with the principal of self-assessment and self-compliance.

Will a separate return required to be filled for the Provincial Sales tax purposes?

Yes. Return for the sales tax on services is filed electronically in the prescribed form BST-03.

How often a Sales Tax audit be conducted ?

Ordinarily, once a year.

What is appellate procedure?

Same as in the Federal Fiscal Laws. Appellate Forums: (i) Commissioner (Appeals), (ii) Appellate Tribunal, and (iii) High Court, in case question of law is involived. Administrative Forums: (i) Alternate Dispute Resolution Committee, and (ii) Tax Ombudsman

Will we have to re-register ourselves under the new Act, or the existing registration under the Sales Tax Act 1990 is valid under the new Act?

There would be no need to re-register as all existing registered persons shall be deemed to be registered under the Balochistan Sales Tax Act, 2015 and registered person’s registration shall be NTN with prefix "B" .

Will there be any change in the manner and mode of monthly payment of tax?

There will be no change in manner and mode of payment. All payments of tax to be paid generating PSID/CPR through designated branches of NBP to the Balochistan Government’s account head "B-02387 - Balochistan Sales Tax on Services" and tax payer has to file and pay sales tax return through BRA portal.

Where we can find list of authorized bank branches?

The list is displayed on website of BRA.

Will we continue to claim the input tax adjustment as per past practice under section 16?

The registered persons will continue to claim the input tax adjustments. Please see the Rules 25 to 28 Chapter V.

How can Federal Excise duty and sales tax be imposed simultaneously on a service?

Balochistan Sales Tax on services stand effective from July 01, 2015. All services which are provided or rendered within the territorial jurisdiction of Balochistan are taxable in Balochistan. Thus, there is no duplication of sales tax on service.

Have the rules under the above Act been promulgated? If yes, from where can we get a copy?

Rules have been promulgated and are available on website of Balochistan Revenue Authority.

Are Modarabas, Musharikas and other financial institutions exempt from tax?

As per Second Schedule of the Act, modarabas, musharika and other financial institutions are liable to pay sales tax.

FAQs