GST@19.5% On ALL Telecom Services from August 1st.
In a meeting held in the finance ministry it was decided that GST of 19.5% will be applied on all telecom services from 1st august. All finance secretaries and FBR chairman Salman Sadiq were present in the meeting and chaired by federal finance secretary Dr Waqar Masood.
According to sources all provinces and the federal government have agreed to introduce this single rate to remove prove problems in tax collection. Punjab ,KPK and Baluchistan had originally proposed a 16% sales tax on telecom services. These provinces will now have to amend their ordinances to apply the new uniform rate.
FBR has decided to impose the same tax rules during july 2011 that had been followed previously and apply the new rate with affect from august 2011.
Following the legal procedure first the FED has to be withdrawn on VAT mode by FBR on services and then Sindh can delegate powers to FBR for collection of sales of sales tax on collection services by issuing a notification. Sindh government claims that there are many services which involve input tax adjustments. Sindh sales tax on services act 2011 impowers the sindh revenue board to collect sales taxes on all but five services that would be covered by FBR.
This law had to be initially implemented last year but was delayed due to several reasons. Now the FBR and Sindh Revenue Board will do accounting procedure for determination of the input tax adjustment. The taxpayers should be given their right for claiming input tax adjustment.