Tax Memorandum 2011

TAX MEMORANDUM
 

SALES TAX ON FIVE EXPORT ORIENTED SECTORS
The Federal Board of Revenue (FBR) has issued SRO 1125(I)/2011 dated December 31, 2011, effective January 1, 2012 whereby sales tax regime for the five export oriented sectors has been modified.
This note briefly describes and identifies the changes made through SRO 1125. It is advised that specific clarification be obtained on any particular matter.

THE SINDH SALES TAX ON SERVICES ACT, 2011
As a result of devolution of functions by the 18th Amendment to the Constitution and introduction of a comprehensive sales tax on services law by the Sindh Assembly, the structure for the levy of Sales Tax on services has changed from July 1, 2011. This memorandum is limited to comments on Sindh Sales Tax on Services Act, 2011, however, since inter-provincial aspects are relevant, it is stated that the framework for provincial sales tax on services in certain other provinces have also effectively been aligned to the structure described in this memorandum.
This note briefly describes and identifies the changes in the structure, new services brought into the tax net and manner of discharge of liability. This represents a transition in the structure, therefore, a definitive position will emerge over time and we are seeking clarifications from the Sindh Revenue Board (SRB) and the Federal Board of Revenue (FBR) on certain aspects. Nevertheless, the purpose of this note is to provide primary and preliminary understanding of the changes. It is accordingly advised that specific clarification be obtained on any particular matter.

 Tax Memorandum 2011

This memorandum summarises the important changes proposed in the Finance
Bill 2011 relating to Income Tax, Sales Tax, Federal Excise Duty, Customs Duty
and Other Laws. For considering the precise impact of a particular change,
reference should be made to the specific wordings in the relevant statute.
All changes through the Finance Bill 2011 are effective July 1, 2011, except for
the amendments in the First Schedule to the Customs Act, 1969, Sixth Schedule
to the Sales Tax Act, 1990 and certain amendments (identified in the
memorandum) in the First Schedule to the Federal Excise Act, 2005 which are
effective from June 4, 2011. Effective dates of amendments through various
notifications are also identified in the memorandum.
The proposals introduced in the Bill have to be approved by the National
Assembly before they become effective. They should, therefore, not generally be
acted upon without obtaining appropriate advice.