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030106
GOVERNMENT OF
PAKISTAN CENTRAL
BOARD OF REVENUE REVENUE
DIVISION
(SALES
TAX WING)
SALES
TAX INSTRUCTIONS/ RULING
NO. 01/2003
C.
No. 1(17)STR/2002.
Islamabad the 6th January, 2003.
To:
1. The Collector of Sales Tax & Central Excise,
(East/West/LTU), Karachi/Lahore/Rawalpindi/Peshawar/Gujranwala.
2. The Collector of Customs Sales Tax & Central Excise,
Multan/Hyderabad/Quetta.
3. The Collector of Sales Tax,
Faisalabad.
SUBJECT:
APPLICATION OF GST THRESHOLD FOR SERVICE POROVIDERS (BEAUTY PARLOURS ETC. AND LAUNDRIES AND DRY CLEANERS).
A question has been raised whether or not exemption or turnover threshold
prescribed under section 3A and serial No. 42 of the Sixth Schedule to the Sales
Tax Act, 1990 is applicable to (I) services provided or rendered for personal
care by beauty parlours, beauty clinics, slimming clinics and (ii) laundries and
dry cleaners chargeable to sales tax under the respective Provincial Sales Tax
Ordinance (all 2000). The matter has been examined in the Central Board of Revenue.
2. The Central Board of Revenue is of the view that beauty parlours etc. and
laundries and dry cleaners provide services at the retail level and therefore
these service providers are covered by the definition of retailer given under
section 2(28) of the Sales Tax Act, 1990. Hence, they shall be treated as retailers and threshold and annual
turnover limits prescribed for retailers under the said Act. i.e section 3A and
serial No. 42 of the Sixth Schedule of the Sales Tax Act, 1990 shall apply on
them. Thus, the said service providers with annual turnover of less than one
million rupees are not required to charge provincial sales tax while those with
annual turnover of more than one million rupees but less then five million
rupees are required to pay turnover tax @ 2% without charging any sales tax on
receipts/invoices issued to their clients. However, beauty parlours etc. and laundries and dry cleaners with
turnover more than five million rupees per annum are required to maintain
records as prescribed under the Sales Tax Act, 1990 and issue invoices/receipts
charging sales tax @ 15%.
3. Laundries and dry cleaners having separate washing/laundries for catering
to retail outlets at different places shall however be treated as manufacturers
liable to pay sales tax @ 15% in case of supplies of above Rs. 2.5 million per
annum and turnover tax @ 2% if their turnover is from Rs. 0.5 million to Rs.2.5
million per annum.
4. All Collectors of Sales Tax are advised to conduct meetings with
respective Associations to ascertain minimum turnover through mutual
consultation for each registered person in a way that input tax does not exceed
10% of turnover in case of beauty parlours etc. and 25% in case of dry cleaners
and laundries.
(Pervez Esbhani)
Secretary (STR&S)
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