The

KHYBER PAKHTUNKHWA SALES TAX ON SERVICES ACT, 2022

(ACT NO. XIX OF 2022)

The amendments made through KP Finance Act, 2024 have been shown in Red
Updated by a team comprising
Mr. Waqar Ahmed, Assistant Collector
Mr. Akhtar Rasool, Assistant Collector

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Notification No. PA/Khyber Pakhtunkhwa/Bills-234/ 2022/16078, dated 12th June, 2022.-
-The Khyber Pakhtunkhwa Sales Tax on Services Bill, 2022 having been passed by the
Provincial Assembly of Khyber Pakhtunkhwa on 3rd June, 2022 and assented to by the
Governor of the Khyber Pakhtunkhwa on 8th June, 2022 is hereby published as an Act of the
Provincial Legislature of the Khyber Pakhtunkhwa.

(ACT NO. XIX OF 2022)

AN

ACT

to reform the law relating to sales tax on services in the Province of Khyber Pakhtunkhwa
and for matters connected therewith and incidental thereto.

WHEREAS it is expedient to reform the law relating to sales tax on services and to
make provision for imposition, payment and collection of sales tax on services in the
Province of Khyber Pakhtunkhwa and for matters connected therewith and incidental
thereto.

It is hereby enacted by the Provincial Assembly of Khyber Pakhtunkhwa as follows:

CHAPTER-I
PRELIMINARY

1. Short title, extent and commencement.---(1) This Act may be called the Khyber
Pakhtunkhwa Sales Tax on Services Act, 2022.

(2) It shall extend to the whole of Province of Khyber Pakhtunkhwa.

(3) It shall come into force at once:

Provided that Government may, in respect of the services listed in the Schedules
appended to this Act, by notification in the official Gazette, specify different dates for
different services, on which taxes shall be levied.

2. Definitions.---In this Act, unless there is anything repugnant to the subject or

context,-
(a) “accountant” means-
(i) a chartered accountant, as defined in the Chartered Accountants
Ordinance, 1961 (Ordinance No. X of 1961), and includes the
associate and fellow members thereof;
(ii) a cost and management accountant, as defined in the Cost and
Management Accountants Act, 1966 (Act No. XIV of 1966),
and includes the associate and fellow members thereof;
(iii) a firm or an association of chartered accountants or cost and
management accountants; and

(iv) other accountants or association of accountants notified, in this

behalf, by the Management Committee;

(b) “active taxpayer” means a registered person, who is regularly filing return
and paying tax, as due in terms of this Act, and is so appearing in the active
taxpayers’ list, as displayed by the Management Committee and updated
from time to time on official website of the Authority; provided that the
Management Committee may allow any taxpayer, not appearing in the said
list, to be treated as an active taxpayer, for the purposes of this Act and
nothing shall bar the Management Committee to declare any taxpayer as
inactive, despite being included in the list;
1[(b-i) “Additional Collector” means the Additional Collector appointed under
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Inserted through Finance Act, 2024 (assented on: 06th June 2024)
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 section 43 of this Act;]
(c) “agent” means a person, who is authorized to act on behalf of another
person, called the principal, to create a legal relationship with a third party,
and includes a person specified as an agent under section 76 of this Act;

(d) “Appellate Tribunal” means the Appellate Tribunal, established and

constituted under the Khyber Pakhtunkhwa Revenue Authority Act, 2022;

(e) “arrear” means any amount of tax, including default surcharge and
penalty, due under this Act, but not paid;

(f) “Assistant Collector” means the Assistant Collector, appointed under

section 43 of the this Act;

(g) “associates” or “associated persons” means associates or associated

person as define under sub-section (3) of section 2 of the Sales Tax Act,
1990 (No. VII of 1990);

(h) “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;

(i) “Audit Officer” means an Audit Officer of the Authority, appointed under
section 43 of this Act;

(j) “Authority” means the Khyber Pakhtunkhwa Revenue Authority,

established under section 3 of the Khyber Pakhtunkhwa Revenue Authority
Act, 2022;

(k) “authorized officer” means an officer of the Authority, duly authorized to

act under this Act;

(l) “business bank account” means the bank account of a person, used for
business transactions, subject to the condition that such account is declared by
him in the prescribed application, for registration submitted for obtaining a
registration number or for changing the particulars thereof;

(m) “Code” means the Code of Criminal Procedure, 1898 (Act V of 1898;

[(m-i) “Collection Agent” means the State Bank of Pakistan or any other
scheduled bank or entity licensed or authorized by the State Bank of Pakistan
to transfer money abroad for the specified services;]2

(n) “Collector” means a Collector, appointed under section 43 of this Act;

(o) “Collector (Appeals)” means a Collector (Appeal), appointed under

section 43 of this Act;

(p) “Collectorate” means the office of the Collector or the Collector (Appeals),
having jurisdiction specified under this Act and Notifications issued
thereunder;

(q) “common taxpayer identification number” means the registration

number or any other number or identification code, allocated to a registered
person;

(r) “company” means-

(i) a company as defined in the Companies Act, 2017 (Act No.
XIX of 2017);
(ii) a banking company and foreign banking company, as defined

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Inserted through Finance Act, 2024 (assented on: 06th June 2024)
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 in the Banking Companies Ordinance, 1962 (Act No. LVII of
1962), and includes anybody corporate, which transacts the
business of banking in the Province;
(iii) a non-banking finance company and the notified entities, as
specified in section 434 of the Companies Act, 2017 (No. XIX
of 2017), read with the Non-Banking Finance Company
(Establishment and Regulation) Rules, 2003;

(iv) a modaraba company, as defined in the Modaraba Companies

and Modaraba (Floatation and Control) Ordinance, 1980 (Act
No. XXXI of 1980);
(v) a financial institution, as defined in the Financial Institutions
(Recovery of Finances) Ordinance, 2001 (Act No. XLVI of
2001), including a microfinance institution, licensed under the
Microfinance Institutions Ordinance, 2001 (Act No. LV of
2001) and an Islamic financial institution;
(vi) an insurance company, as defined in the Insurance Ordinance,
2000 (Act No. XXXIX of 2000);

(vii) a body corporate, formed by or under any law, for the time
being in force in Pakistan;

(viii) a body incorporated outside Pakistan;

(ix) a trust, a co-operative society, a finance society or any other

society, established or constituted by or under any law for the
time being in force;
(x) a foreign association, whether incorporated or not, which the
Management Committee with the approval of the Policy
Board, by general or special order, declared to be a company
for the purposes of this Act; or
(xi) a company, as defined under the Income Tax Ordinance, 2001
(Act No. XLIX of 2001) or the Sales Tax Act, 1990 (Act No.
VII of 1990);

(s) “computerized system” means any comprehensive information

technology system, including its development, up-gradation or updation, for
carrying out the purposes of this Act;

(t) “default surcharge” means the default surcharge, levied and calculated or
calculable, under section 54 of this Act;

(u) “defaulter” means a person or an association of persons, including every

member of such association, every director of a company and every partner
of a firm and guarantors or successors thereof, who fails to pay the arrears of
tax under this Act and the rules;

(v) “Deputy Collector” means a Deputy Collector, appointed under section 43

of this Act;

(w) “document” means any matter or content, expressed or described upon any
substance by means of letters, figures or marks or by more than one of those
means, intended to be used, or which may be used, for the purpose of
recording that matter and includes any electromagnetic data, computer
programs, computer tapes, computer disks, micro-films or any other
medium or mode for the storage or conveyance of such data;

(x) “due date” in relation to-

(i) the payment of tax means the 15thday of month, following the
end of the tax period;
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 (ii) in relation to furnishing of a return under Chapter-VI of this
Act, means the 18thday of month, following the end of the tax
period; and
(iii) such other date as the Management Committee may, by
Notification in the official Gazette, specify;

(y) “economic activity” means the economic activity as specified in section 5

of this Act;

(z) “e-intermediary” means a person, appointed as electronic-intermediary,

under section 80 of this Act;

(aa) “exempt service” means a service which is exempt from tax under
section 11of this Act;

(ab) “FBR” means the Federal Board of Revenue, established under the
Federal Board of Revenue Act, 2007 (Act No. IV of 2007);

(ac) “firm” means the relation between two or more persons, who have
agreed to share the profits of a business, carried on by all or any of
them acting for all;

(ad) goods” mean the materials, commodities and articles, specified in

Chapters 1 to 97 of the First Schedule to the Customs Act, 1969 (Act
No. IV of 1969) and includes every kind of moveable property other
than actionable claims, money, stocks, shares and securities;

(ae)“Government” means the Government of Khyber Pakhtunkhwa;

(af) “input tax”, in relation to a registered person, means-

(i) tax levied under this Act on the services received by the person; and

(ii) tax levied under the Sales Tax Act, 1990, on the goods whether
imported or procured locally by the person:

Provided that Government may, by a notification in the official Gazette,

specify and declare any other sales tax on services, levied and paid under any
other law, to be an input tax for the purposes of this Act: Provided further that
Government may, by rules or notification in the official Gazette, specify that
any or all of the aforesaid tax shall not be treated as input tax for the purposes
of this Act, subject to such conditions and limitations as may be prescribed in
rules or by notification;
[(af-i) “Inspector” means an Inspector of the Authority, appointed under section
43 of this Act;]3

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

(ah) “Management Committee” means a Management Committee, constituted

under the Khyber Pakhtunkhwa Revenue Authority Act, 2022;

(ai) “Magistrate” means a Magistrate of the First Class, empowered under the
Code;

(aj) “Non-resident” means a person, who, for any tax year, is not a resident
for such tax year, within the meaning of clause (av) below;

(ak) “open market price” means the market rate as specified in section 7 of
this Act;

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Inserted through Finance Act, 2024 (assented on: 06th June 2024)
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 (al) “output tax” in relation to a registered person, means the tax levied
under this Act on the services provided or rendered by the person;

(am) “person” means-

(i) an individual;
(ii) a company, an agency or an association of persons incorporated,
formed, organized or established in Pakistan or elsewhere;
(iii) the Federal Government;
(iv) a Provincial Government;
(v) a local authority or local government; or
(vi) a foreign government, a political sub-division of a foreign
government or a public international organization;

(an) “place of business” means whenever a person whether directly, indirectly,

physically or virtually-

(i) owns, avails or uses on rent, shares or in any other manner occupies
any space in the Province from where he carries on an economic
activity whether wholly or partially and includes a person who
provides services without physical presence in the Province; or

(ii) carries on an economic activity, whether wholly or partially through

any other person, such as an agent whether domiciled, resident,
stationed or not, associate, franchise, branch, office or otherwise in
the Province;
(ao) “Policy Board” means the Policy Board, established under the Khyber
Pakhtunkhwa Revenue Authority Act, 2022;
(ap) “PRAL” means the Pakistan Revenue Automation (Private) Limited; (aq)

“prescribed” means prescribed by rules or regulations;

(ar) “Province” means the Province of Khyber Pakhtunkhwa;

(as) “provision of service” or “providing of service” includes the rendering,

supply, initiation, origination, consumption, execution, reception or
termination of service, whether in whole or part, including making
availability of a service, not availed and e-services where the context so
requires;

(at) “registration number” means the number, allocated to a registered person,

for the purposes of this Act;

(au) “registered person” means a person, who is registered or is liable to be

registered, even though not actually registered under this Act:

Provided that a person, liable to be registered but not registered

under this Act, shall not be entitled to any benefit available to a registered
person under any of the provisions of this Act or the rules;

[(au-i) “regulations” mean the regulations made under this Act;]4

(av) “resident” means-

(i) an individual, who, in a financial year, has-

(a) a place of business, whether whole or part thereof, in the
Province, in any mode, style or manner;
(b) his permanent address, as listed in the individual’s national

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Inserted through Finance Act, 2024 (assented on: 06th June 2024)
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 identity card, in the Province; or
(c) a permanent representative to act on his behalf or to provide
service on his behalf in the Province;

(ii) an association of persons or a company, which, in a financial year,

has-
(a) its registered office in the Province;
(b) its place of business, whether whole or part thereof, in the
Province, in any mode, style or manner;
(c) a permanent representative to act or to provide service on its
behalf in the Province; or
(d) the control or management of the affairs of the association of
persons or the company, whether whole or part thereof,
situated in the Province, at any time during the financial year;

(aw) “return” means a return, required to be furnished under Chapter VI of this

Act, and includes any return required to be furnished under this Act and
the rules and, where the context so requires, includes a statement or any
other instrument containing any information required under this Act or
rules;

(ax) “reverse charge” means the liability to pay tax under section 4 of this
Act;

(ay) “rules” mean the rules made under this Act;

(az) “Schedule” means a Schedule appended to this Act;

(aaa) “service” means anything which is not goods and includes facilities,
amenities, utilities or advantages by whatever name called and are liable to
sales tax on services as specified in First Schedule:

Explanation.---A service shall remain and continue to be treated as

service, whether or not the provision thereof involves use, supply,
disposition or consumption of goods, either as an essential or as an
incidental part or aspect of such service;

(aab) “short-paid” means a registered person, including a withholding agent, who

pays or withholds an amount of tax less than the tax due owing to
miscalculation or inadmissible input tax credit or adjustment or incorrect
assessment of the tax amount due for a tax period;

(aac) “similar service” with reference to a particular service, means any other
service which either is the same as, or closely resembles that particular
service in terms of character, quality, quantity, functionality, purpose,
usage, materials or reputation;

(aad) “special audit” means an audit, conducted under section 38 of this Act;

(aae) “Special Judge” means a Special Judge, appointed under section 46 of

this Act;

(aaf) “statement” means a statement prescribed under the rules made or a issued
under this Act and includes the statement specified by the Management
Committee for any of the purposes of this Act or rules issued thereunder;

(aag) “tax” means-

(i) the sales tax on services, including tax withheld or liable to be

withheld or default surcharge levied under this Act;
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 (ii) a fine, penalty or fee, imposed or charged under this Act; and

(iii) any other sum, payable or recoverable under the provisions of this
Act or the rules;

(aah) “tax fraction” means the amount worked out in accordance with the
following formula-

a ÷ (100 + a)

Note. ‘a’ is the rate of tax applicable to taxable services in terms of

section 9 of this Act;

(aai) “tax fraud” means knowingly, dishonestly or fraudulently and without an lawful
excuse,-
(i) doing of any act or causing to do any act in contravention of
the duties and obligations under this Act or the rules or
notifications issued thereunder; or
(ii) omitting to take any action or causing the omission of any
action, including providing of taxable services without being
registered under this Act; or
(iii) falsifying or causing falsification of tax invoices or other tax
documents or records; or
(iv) issuing invoice or bill of taxable services without the
provision of that taxable service; or
(v) failing to pay an amount of tax collected under section 20 of
this Act, and failing to pay the amount of tax withheld under
section 14 of this Act or the rules; or
(vi) under-stating or under-paying the tax liability or over- stating
the entitlement of tax credit or adjustment or claiming or
obtaining in-admissible tax credit, refund or adjustment; or
(vii) not filing the tax return or the statement for four consecutive
months or more; or
(viii) [failing to declare and pay the tax so charged and collected
under this Act;]5

(aaj) “taxpayer” means any person, who is required or is liable to pay or is

paying tax, or any sum under this Act and the rules, and includes any
person, other than a Government employee, who is assigned any duty or
responsibility to withhold, deduct, collect or deposit tax under this Act
and the rules;

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

(aal)“taxable service” means the service as given under section 3 of this Act;

(aam)“value of a taxable service” shall have the meaning given under section
6 of this Act; and

(aan) “withholding agent” means any person, who, as a recipient of taxable

service or otherwise, withholds or deducts and pays or deposits tax
directly to Government in the manner as may be prescribed;

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 CHAPTER-II
TAXABLE SERVICES

3. Taxable service.---(1) A taxable service is a provision of service, listed in the

Second Schedule,-

(a) by a registered person from his registered office or place of business in the
Province, in the course of an economic activity;

Explanation.---This clause deals with services provided by registered

persons, regardless of whether those services are provided to resident or
non-resident; and

(b) by a resident or non-resident in the course of an economic activity.

Explanation.---This clause deals with services provided by non-resident to

resident, whether or not the said resident is an end-consumer of such
services.

(2) For the purposes of sub-section (1), where a person has a registered office or
place of business in the Province and another outside the Province, the registered office or
place of business in the Province and that outside the Province shall be treated as separate
legal persons.

(3) The Policy Board may prescribe the conditions under which a particular
service or class of services shall be considered to have been provided by a person from his
office or place of business in the Province.

(4) The services, mentioned in the First Schedule, are not exhaustive and all
services, mentioned in the Second Schedule, shall be taxable services, regardless whether or
not they are mentioned in the First Schedule.

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

--(1)Where a person is providing taxable services from an area or territory other than the
Province but the recipient of such services is a resident of the Province or is otherwise
availing such services in the Province and tax has been charged from him accordingly, the
person providing such services shall pay the amount of tax so charged to Government.

(2) Where the recipient of a taxable service is a person, registered under this
Act, as a withholding agent, he shall deduct, such amount of tax as may be prescribed by
the Policy Board, in respect of the service received and pay the same to Government.

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

(4) Unless otherwise specified by Government, where rendering of a taxable

service originates from the Province but terminates outside Pakistan, such person shall be
required to pay tax on such service to Government.

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

Provided that in case of incoming international calls, the telecommunication

companies in Pakistan shall pay tax on reverse charge basis to the extent of their share of
charges received from abroad, either through local representative or otherwise, for the
transmission and delivery of such calls in the Province and in all situations, the
telecommunication companies including their local representatives etc., shall be deemed
and treated as recipient of such calls.
(6) The persons, who are required to pay the tax to Government in terms of sub-

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sections (1), (2), (3), (4) and (5), shall be liable to registration for purposes of this Act.

(7) Government may, by notification in the official Gazette, specify any

additional categories of provision of taxable services, the tax which shall be paid on reverse
charge basis by the recipient of such services and all the provisions of this Act shall apply
to such recipient as if he is the person liable for paying the tax in relation to the provision
of such services.

5. Economic activity.---(1) An economic activity shall be carried on by a person

whether continuously, regularly or otherwise, 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 or provision of movable or immovable property by way of
lease, rent, license or other similar arrangement; and
(c) a one-time adventure, 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.

Explanation.---For the purposes of this sub-section, the term “commencement” includes

origination of a service by its provider and the term “termination” includes consumption or
enjoyment of a service by its recipient.

(3) An economic activity does not include-

(a) the activities of an employee providing services in that capacity to an
employer;
(b) a private recreational pursuit or hobby of an individual; or
(c) a sovereign or core function of the State, performed by the Federal
Government or any other public authority.
Explanation-I For the purpose of clause (c), there must be a
monopoly in the performance of a State function and a person
performing a commercial activity shall not be entitled to claim any
benefit or immunity to the disadvantage of its competitors.
Explanation-II A person shall not be entitled to claim any benefit or
immunity under clause (c) unless that person is wholly owned and
controlled by Federal Government or Government.

6. Value of a taxable service. ---(1) The value of a taxable service is the consideration
in money, including all Federal and Provincial duties and taxes, if any, which the person,
providing a service, receives from the recipient of the service but does not include the
amount of tax under this Act:

Provided that where-

(a) the consideration for a service is in kind or it is partly in kind and
partly in money or it is lower than the consideration charged from
other recipients of the same or similar service;
(b) provider of service and its recipient are associated persons;
(c) the service is otherwise provided for no or a consideration lower
than the one at which it is provided under normal market
circumstances; or
(d) there is reason to believe that the value has not been correctly
declared on the invoice or for any special or unusual nature of
transaction, it is difficult to ascertain the value of the service,
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 -the value of service shall be the value equal to the open market price of such a service in
terms of section 7.

(2) The price discounts in respect of services shall not be permissible for the
purpose of tax payment under this Act, unless they are in conformity with the normal,
general, ordinary and customary practices of the relevant business in the open market
environment and are duly shown on tax invoice or invoices, indicating the normal price,
rate and amount of discount and the discounted price.

(3) Notwithstanding anything contained in this Act, where the Management

Committee 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 description of the same or similar types of services:

Provided that where the value, at which any service is provided, is higher than the
value fixed by the Management Committee, the value of the service shall be, unless
otherwise directed by the Management Committee, the value at which the service is
provided.

7. 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;
(b) 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 this actual service, if it is not possible to determine an
amount under clause (a); and
(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 using any method or formula specified by the Management
Committee for calculating an objective approximation of the price, the service would fetch
in an open market transaction freely made between persons who are not associated.

8. 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:

Provided that where a service is contractually provided to any particular person on

daily basis and payment for the value thereof is received by the end of a calendar month,
the service shall be treated as single service for the purposes of accounting, invoicing,
payment of tax and declaration.

Explanation-I: 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.
Explanation-II: 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.

(2) This section shall not apply to the services for which payment is made on
installment basis.

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 CHAPTER-III SCOPE
OF TAX

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

Provided that fifteen percent rate of tax shall be deemed and treated as the standard
or general rate of tax for all purposes of this Act.

(2) Government may, on its own or on the recommendation of the Policy Board,
and subject to such conditions and restrictions as it 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 anything contained in this Act, the Policy Board may, with
the approval of Government, 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 or
such other criteria as may be specified in the notification, below which such person or class
of persons shall be exempt from payment of tax under this Act.

10. Person liable to pay tax.---(1) Where a service is taxable by virtue of clause (a) 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 clause (b) of sub-section [(1)]6 of

section 3, the liability to pay the tax shall be on the person receiving the service.

(3) Notwithstanding anything contained in sub-sections (1) and (2), the Policy
Board 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 22 of this Act.

11. Exemptions.---(1) Notwithstanding anything contained in sections 3 and 9 of this

Act, the Policy Board may, with the approval of Government and subject to such
conditions, limitations or restrictions, as it may impose, by notification in the official
Gazette, exempt a-

(a) taxable service or services, provided by a person or a class of

persons, from the whole or any part of the tax;
(b) 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
(c) class of persons, any area or areas of the Province, from the whole or
any part of the tax:

Provided that where in compliance to any commitment of

Federal Government or Government either under any international
convention, protocol, treaty or agreement, or under any agreement or
arrangement for foreign grant-in-aid assistance including free
technical assistance to the Province or elsewhere in the country, an
exemption from tax is required, the Management Committee shall
issue notification or, as the case may be, order for such exemption
after taking concurrence from the Finance Department of

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Substituted for the figure and bracket “(2)” through Finance Act, 2024 (assented on: 06th June 2024)
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 Government, for such exemptions on such conditions, restrictions or
limitation as may be mentioned in the said notification.

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

12. Power to amend the Second Schedule.---Government may, on its own or on the
recommendation of the Policy Board, by notification in the official Gazette, add, delete or
amend any entry of the Second Schedule, including but not limited to, inclusion or
exclusion of a service, modification of classification or description of any service or
changing the rate of tax of any service.

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 Policy Board may, by notification in the official Gazette,
prescribe a special procedure for withholding of tax, including but not limited to, the
payment of tax, registration, book-keeping, invoicing or billing requirements, returns,
statements and other related matters in respect of any service or class of services, as may be
specified.

(2) Notwithstanding anything contained in any other provisions of this Act, the
Policy Board 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 or invoiced to 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 Government within such time and in such manner
as it may, by notification in the official Gazette, specify
(3) In addition to the obligation, stated in sub-section (2), where an individual,
during the course of business, is making payment on behalf of the withholding agent, he
shall be personally responsible to withhold and deposit the due tax. In case of failure on his
part to do so, it shall be his personal liability to pay such due amount of tax alongwith default
surcharge and penalty under this Act. Any such amount of tax, including default surcharge
and penalty, if not paid, may be recovered from such person under section 74 of this Act.

[14A. Special procedure for collection of tax through Collection Agent.---(1)

Notwithstanding anything contained in this Act, the policy board may declare any other
person or class of persons as collection agent, not necessarily being a service provider or a
service recipient in a particular transaction, and required to collect full or part of the tax
charged from another person or class of persons on the provision of any taxable service or
class of taxable services and to deposit the tax so collected, in the government treasury
within such time and in such manner, as the Policy Board may, by notification prescribe.

(2) For the purpose of sub-section (1), the special procedure, so prescribed, may
also provide for registration, bookkeeping, invoicing or billing requirements, returns and
other related matters in respect of any service or class of services.

(3) Where a person or class of persons, declared as collection agent, is required to

collect full or part of the tax on the provision of any taxable service or class of taxable
services and either fails to collect the tax or having collected the tax, fails to deposit the tax
in Government treasury, such person or class of persons shall be personally liable to pay
the amount of tax assessed or determined under section 27 of this Act, to the Government,
in the manner as may be prescribed by rules;]7

15. Delegation of power to collect, administer and enforce sales tax on certain
services.---(1) Notwithstanding anything contained in this Act, Government may, by
notification in the official Gazette, authorize the FBR or any other Federal or Provincial
Department, agency, organization or person to administer, collect and enforce the levy of
sales tax on such taxable services as it may notify and in such mode and manner and for
7
Inserted through Finance Act, 2024 (assented on: 06th June 2024)
13
 such period as it may prescribe and subject to such restrictions and conditions as it may
impose.

(2) Notwithstanding anything contained in this Act, where Government notifies

any taxable services under sub-section (1) above, for the period specified therein, except for
the provisions of Chapters I, II, III and sections 82, 86 and 95 of this Act, the remaining
provisions of this Act shall not be applicable to such taxable services.

(3) At the end of the period, specified in sub-section (1) above, the tax on
taxable services, notified under sub-section (1), shall be administered, collected and
enforced by the Management Committee in the same mode and manner as all other taxable
services and all provisions of this Act shall be applicable to them.

16. Adjustments.---(1) A person, required to pay tax under this Act, shall be entitled to
deduct from the payable amount, the amount of tax payable or already paid by him to
Government on the receipt of taxable services, used exclusively in connection with the
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
on the services so received; provided that the Management Committee may disallow or
restrict such adjustment in case of any service or person or class of services or persons as it
may deem appropriate.

Explanation.---For the purpose of sub-section (1), the expression “paid” shall be

construed to include deposit of tax with Government.

(2) [Notwithstanding anything contained in this Act, the Management

Committee may, subject to such conditions, restrictions, limitations and fixation or re-
fixation of the extent of input tax adjustment, as it may specify or otherwise, allow
registered person to claim adjustments, including refunds arising as a result thereof, in
respect of the tax paid under any other law in respect of any taxable service or goods or
class of taxable services or goods, received or acquired and used in the provision of taxable
service or services by him; provided that the adjustment or refund is admissible in other
law as well;]8

(3) For the purposes of sub-section (2), the Management Committee may adopt,
use and apply the principles or concepts, laid down in such other law in respect of
adjustments, deductions or refunds, including zero-rating principle.

(4) No adjustment or deduction of any tax, payable under any other law, shall be
claimed by any person, except in the manner, to the extent and from the date specified in the
notification issued under sub-section (2):
Provided that if no such date has been specified, the date of coming into effect of
such notification shall be deemed to be the specified date for the purpose of this section.

17. Input tax credit not allowed.---(1) A registered person shall not be entitled to
claim, reclaim, adjust or deduct input tax in relation to-

(a) the goods, including capital goods and fixed assets or services used or
to be used for any purpose other than for the taxable services,
provided or rendered or to be provided or rendered by him;
(b) the goods in respect of which sales tax has not been deposited in the
Federal Government treasury by the respective supplier of goods;
(c) the payment of the amount for a transaction, exceeding value of fifty
thousand rupees, excluding payment against a utility bill, not made
by a crossed cheque drawn on a bank draft, pay order or any other
banking instrument, showing transfer of the amount of the sales tax

8
Substituted through Finance Act, 2024 (assented on: 06th June 2024) for the following: “(2) The Management Committee may,
subject to such conditions and restrictions as it may specify or otherwise, allow registered persons to claim adjustments, including
refunds arising as a result thereof, in respect of the tax paid under any other law in respect of any taxable service or goods or
class of taxable services or goods, received or acquired and used in the provision of taxable service or services by them, provided
that the adjustment or refund is admissible in other law as well.”
14
 invoice in favour of the service-provider from the business bank
account of the service-recipient.
(d) the service in respect of which the Provincial sales tax has not been
deposited in the treasury of Government;
(e) further tax, extra tax or value addition tax, levied under the Sales
Tax Act, 1990 (Act No. VII of 1990), and the rules or notifications
issued thereunder;
(f) fake, false, forged, flying or fraudulent invoices or the invoices
issued by persons black-listed or suspended by Management
Committee or FBR;
(g) the following goods or services, excluding the ones directly used or
consumed in the economic activity of a registered person in
provision of the services paying sales tax:

(i) vehicles classified under Chapter 87 of the First Schedule to

the Customs Act, 1969 (Act No. IV of 1969) and parts,
including batteries and tyres and tubes of such vehicles;
(ii) calendars, diaries, gifts, souvenirs and giveaways;
(iii) garments, uniforms, fabrics, foot-wear, hand-wear, head-
wear for the employees of the registered person;
(iv) food, beverages and consumptions on entertainments,
meetings or seminars or for the consumption of the
registered person or his directors, shareholders, partners,
employees or guests;
(v) electricity, gas and telecommunication services, supplied at
the residence of the employees or in the residential colonies
of the employees;

(vi) building materials, including cement, bricks, mild steel

products, paints, varnishes, distemper, glass products;
(vii) office equipment and machines, excluding electronic fiscal
cash register, furniture, fixtures or furnishings;
(viii) electrical and gas appliances, pipes and fittings;
(ix) wires, cables, sanitary fittings, ordinary electric fittings,
electric fans and electric bulbs and tubes; and
(x) crockery, cutlery, utensils, kitchen appliances and
equipment;

(h) utility bills not in the name of the registered person unless evidence of
consumption of such utilities is provided to the satisfaction of the
officer of the Authority;

(i) the goods or services procured or received by a registered person

during a period exceeding six months prior to date of
commencement of the provision of taxable services by him;

(j) the goods or services used or consumed in a service liable to sales

tax at the rate less than the standard rate of fifteen percent or at
specific rate or at fixed rate or at such other rates, not based on value
as mentioned in the Second Schedule, the service-provider in such
case shall not be entitled to claim or adjust input tax;

(k) [Such goods or services, as are liable to sales tax, at specific rate or
at fixed rate or at such other rates, not based on value, or at a rate

15
 lesser than the standard rate of 15 percent in case of services or 18
percent in case of goods, as the case may be, and are used or
consumed as inputs in the provision of a taxable service under this
act, the recipient of such services or goods shall not be entitled to
adjust the input tax paid on reduced rate of tax against output tax,
payable on the service or services provided or rendered by him at
immediate next stage of supply chain;]9

(l) the services, provided by a person, are chargeable to a rate of tax

entitled to input tax adjustment, the input tax adjustment shall be
admissible in respect of the tax paid on the inputs, otherwise taxed
on higher rate, only to the extent, not exceeding standard rate of the
tax regime to which the input relates;

(m) the services or goods for which the amount of consideration is not
paid from the business bank account of the recipient in the business
bank account of the service-provider or supplier of goods, as the
case may be;

(n) such goods or services as are notified by the Management

Committee to be inadmissible for input tax claim or reclaim or credit
or adjustment or deduction;

(o) [such goods in respect of which input tax adjustment is barred under
the Sales Tax Act, 1990; and

(p) tax levied and paid on services under the Islamabad Capital
Territory (Tax on Services) Ordinance, 2001, on the services
received by such person.]10

(2) In case where a registered person deals with taxable and non-taxable or
exempt services, he shall be entitled to claim or reclaim, for input tax credit or adjustment or
deduction, only such proportion of the input tax as is attributable to taxable or non- exempt
services, in such manner as may be prescribed by the Policy Board.

(3) No person, other than a person registered under sections 29, 30 or 31 of this
Act, shall claim or deduct or adjust any input tax in respect of sales tax paid on any goods
or services received or procured by him for use or consumption in the provision of taxable
services.

18. Standard or general tax rate application choice.---(1) Where any services or
class of services are chargeable to reduced rate of tax either under the Second Schedule
or under any notification issued under this Act, any registered person or class of registered
persons, providing such services, may, after taking permission from the Management
Committee, opt to pay sales tax at standard or general rate and take input tax adjustment as
admissible under this Act and the rules and every such permission shall be effective from
the date mentioned therein and subject to such conditions, restrictions and limitations as
may be specified by the Management Committee in this behalf:

Provided that a registered person, in case of a company, may opt to operate under
standard rate system on intimation to the Management Committee at least one month in
advance and shall not be entitled to revert back to the reduced rate without prior permission
from the Management Committee as required under sub-section (2).

(2) Once the registered person has started paying sales tax at standard or general

9
Substituted through Finance Act, 2024 (assented on: 06th June 2024) for the following: “(k) the services, where exemption or
reduced rate of tax has been applied or allowed in the Second Schedule or through a notification issued under this Act, the
recipient of such service shall not be entitled to adjust the input tax paid on reduced rate against output tax payable on the
service or services provided or rendered by him at immediate next stage of supply chain;”
10
Added through Finance Act, 2024 (assented on: 06th June 2024)
16
rate as aforesaid, he shall not, on his own, switch over back to availing the reduced rate of tax
on any of his such services unless he takes prior permission from the Management
Committee and while examining and deciding on the requests of switching back to reduced
rate of tax, the Management Committee may conduct or cause to conduct such enquiry or
audit as it may deem necessary to ascertain the genuineness of the request.

(3) No amount of unadjusted amount of input tax, accrued during the period
when standard or general rate was applied, shall be subsequently adjustable in respect of
services subjected to reduced rate of tax, provided that recommencement of applying
standard or general rate of tax, at any later stage by any registered person, shall likewise, be
subject to prior permission from the Management Committee.

(4) The Management Committee may, on its own or otherwise, withdraw the
permission, granted under this section, in respect of any case or class of cases, after issuing
show cause notice and affording opportunity of hearing in the case or cases.

19. Refund.---No refund of tax claimed to have been paid or over-paid through
inadvertence, error, misconstruction or refund on account of input adjustment, not claimed
within the relevant tax period, shall be allowed, unless the claim is made within one year
of the date of payment:

Provided that in a case where a registered person did not deduct input tax, within
the relevant tax period, the Collector may, after satisfying himself that input tax adjustment
is due and admissible, allow the registered person to take such adjustment in the tax period
as specified by the Collector;

Provided further that in a case where the refund has become due on account of any
decision or judgment of any officer of the Authority, Appellate Tribunal or Court, the
period of one year shall be reckoned from the date of judgment or decision of such officer,
Tribunal or Court:

Provided also that the application or claim, filed under this section, shall be
disposed of within a period not exceeding one hundred and eighty days from the date of
filing of such application or claim, which may be extended for another period of sixty days:
Provided also that no refund shall be admissible under this section, if incidence of
tax has been passed directly or indirectly to the consumer.

(2) The manner and mode for payment of refund of any amount, paid or over-
paid through inadvertence, error or misconstruction, may be prescribed by Government.

17
 CHAPTER-IV
PAYMENT AND COLLECTION OF TAX ON TAXABLE SERVICES

20. Collection of excess tax.---(1) Any person, so authorized, 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
Government.

(2) Any amount, payable to Government under sub-section (1), shall be

deemed to be an arrear payable under this Act and shall be recoverable 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 on to the person to whom the service is
provided shall be on the person collecting the tax or charge.

21. Time, manner and mode of payment.---(1) Notwithstanding anything to the

contrary contained in this Act or any other law for the time being in force, 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 VII of this Act.

(2) For the 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; or

(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) In case of a withholding agent, the time and manner of payment may be
prescribed by the Policy Board through regulations.

(4) The tax, due on taxable services, shall be paid by any of the following
modes and instruments, namely:

(a) through deposit in a bank designated by the Management

Committee;
(b) through the Alternate Delivery Channel; or
(c) through such other mode and manner as may be specified by the
Management Committee.

(5) Notwithstanding anything contained in sub-section (1), the Management

Committee may, by a notification in the official Gazette, direct that the tax, in respect of
any taxable service or such classes of taxable services, shall be charged, collected and paid
in any other way, mode, manner or time, as may be specified in the notification.

22. Joint and several liability of persons where tax remained unpaid.---Where a
person receiving a taxable service from another 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 or any previous or subsequent taxable service provided or to be provided; shall
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 tax:

Provided that the Management Committee may, by notification in the official

Gazette, exempt any person, service or transaction or class of persons, services or
transactions from the provision of this section.
18
 Explanation. ---Notwithstanding anything contained in this section, it shall be the
responsibility of a person to take all possible measures to ensure that the person, from
whom he has received taxable services, deposits the due tax, relating to such transaction, in
the manner as provided under this Act and the rules.

23. Sale or transfer of ownership of a business as an ongoing concern.---(1) In case

of sale or transfer of a business, providing taxable services as an ongoing concern, by a
registered person to a non-registered person, such registered person shall be required to
account for and pay the tax on the services provided by him:

Provided that if the tax, payable by such registered person, remains unpaid, the
amount of unpaid tax shall be the first charge on the assets of the business and shall be
payable by the transferee of business:

Provided further that under no circumstances, shall the registration of the buyer be
affected for any difficulty or delay in the cancelation of the registration of the transferor of
business.

(2) In case of sale or transfer of ownership of a business, providing taxable

services to another registered person as an ongoing concern, the liability to pay sales tax,
chargeable thereon, shall be accounted for and paid by the registered person to whom such
business is transferred.

24. 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.

25. Estate in bankruptcy.---(1) If 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 is
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.

26. Liability for payment of tax in the case of private companies or business
enterprises.---Notwithstanding anything contained in the Companies Act, 2017 (Act No.
XIX of 2017), 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 of, 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 the payment of such tax.

27. Assessment of tax and recovery of tax not levied or short-levied.---(1) Where
on the basis of any information acquired during an audit, inquiry, inspection or otherwise, an
officer of the Authority, not below the rank of Assistant Collector, 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, including such short payment as has resulted or may result from
taking inadmissible adjustment of input tax, the officer of the Authority shall make an
assessment of the tax actually payable by that person:
[(1A) Where a person fails to file a return or files a return or makes payment of the
tax after the due date or fails to furnish any information, explanation, documents, record or
any other details as may be required in a notice issued under sections 36, 37, 60, 61 and 63
or fails to comply with the provisions of sections 34 or 64 of this Act, an order under this
section shall be passed to the extent of imposition of penalty or default surcharge in
accordance with sections 53 and 54 of this Act.]11

(2) Where any person, required to withhold sales tax on services under the
provisions of this Act or the rules, [or regulations]12 fails to withhold the tax or withholds the

11
Inserted through Finance Act, 2024 (assented on: 06th June 2024)
12
Inserted through Finance Act, 2024 (assented on: 06th June 2024)
19
same but fails to deposit the same in the prescribed time and manner, an officer of the
Authority, not below the rank of Assistant Collector, shall determine the amount in default.

(3) Where by reason of any inadvertence, error, misconstruction or for any

other reason, any tax or charge has not been levied or made or has been short-levied or has
been erroneously refunded, the person liable to pay such amount of the tax or charge or the
amount of refund erroneously made or has claimed inadmissible input tax credit, an officer
of the Authority, not below the rank of Assistant Collector, shall determine the amount in
default.

(4) Where by reason of some collusion, abetment, deliberate attempt,

misstatement, fraud, forgery, false or fake documents any tax or charge has not been paid or
levied or is short paid or levied or has been erroneously refunded or has claimed
inadmissible input tax credit, an officer of the Authority, not below the rank of Assistant
Collector, shall determine the amount in default of the person liable to pay any amount of
tax or charge or the amount of refund erroneously made.

(5) No order, under this section, shall be made by an officer of the Authority,
unless a notice to show cause is given within five years from the end of the tax period to
which the assessment relates or relevant date, as the case may be, to the person in default,
specifying the grounds on which it is intended to proceed against such person and he shall
take into consideration the representation made by such person and provide him with an
opportunity of being heard if the person so desires and impose the penalty and default
surcharge in accordance with sections 54 and 55 of this Act.

(6) An order, under this section, shall be made within one hundred and twenty
days of issuance of show cause notice or within such extended period as the officer of the
Authority, may, for reasons to be recorded in writing, fix:

Provided that such extended period shall in no case exceed sixty days:

Provided further that any period during which the proceedings are adjourned on
account of a stay order or alternative dispute resolution proceedings under section 73 or
the time taken through adjournment by the person not exceeding forty five days or the
adjournments otherwise ordered by the officer of the Authority for any bona fide or genuine
reasons or factors beyond normal human control of the person, on the date fixed for hearing,
shall be excluded.

(7) For the purpose of this section, the expression “relevant date” means where
tax or charge has been erroneously refunded, the date of its refund.

(8) An order, passed by an officer of the Authority under this section, may
further be amended, as may be necessary, when on the basis of any additional information,
acquired during an audit, inquiry, inspection or otherwise, the officer of the Authority 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;

(9) The Collector may amend or further amend any order, passed under this
section, including sub-section (8), if he considers that the order is erroneous or prejudicial to
the interest of justice.

(10) The provisions of sub-sections (5) and (6) shall be applicable to an order
passed under sub-sections (8) and (9).

(11) Notwithstanding anything contained in this Act, the Policy Board may
prescribe, by regulations, thresholds, parameters, standards and basis for assessment of
supply value of services and the assessment of tax.

Explanation-I.---For the purpose of this section, the term “audit” includes departmental
audit, external audit, special audit or any other scrutiny of records, facts and tax affairs in
20
 any manner, style or mode, resembling audit or appearing like audit.

Explanation-II.---For the purpose of this section, where a person fails to file a return or
files a return or makes payment of tax after the due date; provided that no principal amount
of tax is involved, an order can be passed to the extent of imposition of penalty or default
surcharge in accordance with sections 53 and 54 of this Act.

28. Assessment giving effect to an order.---(1) Except where sub-section (2) applied,
where, in consequence of, or to give effect to, any finding or direction in any order made
under Chapter-IX by the Collector (Appeals), Appellate Tribunal, High Court or Supreme
Court, an order of assessment of tax is to be issued to any registered person, the Collector
or an officer of Authority empowered in this behalf shall issue the order within one year
from the end of the financial year in which the order of the Collector (Appeals), Appellate
Tribunal, High Court or Supreme Court, as the case may be, was served on the Collector
or officer of the Authority.

(2) Where, by an order made under [Chapter-X]13 by the Appellate Tribunal,

High Court or Supreme Court, an order of assessment is remanded, wholly or partly, and
the Collector or Collector (Appeals) or officer of the Authority, as the case may be, is
directed to pass a new order of assessment, the Collector or Collector (Appeals) or officer of
the Authority, shall pass new order, within one year from the end of the financial year, in
which the Collector, Collector (Appeals) or officer of the Authority, as the case may be, is
served with the order:

Provided that limitation under this sub-section shall not apply, if an appeal or
reference has been preferred against the order passed by Appellate Tribunal or a High
Court.

13
Substituted through Finance Act, 2024 (assented on: 06th June 2024) for the word, hyphen and roman figure “Chapter-IX”.
21
 CHAPTER-V
REGISTRATION

29. Registration and application for registration.---(1) A person shall be registered

under this Act, who-

(a) provides a taxable service from his registered office or place of

business in the Province;
(b) is otherwise required to be registered under any of the provisions of
this Act or the rules;
(c) is a withholding agent under this Act; or
(d) fulfills any other criteria or requirements which the Management
Committee may specify under sub-section (2).

(2) The registration, under this section, shall be regulated in such manner and
subject to such conditions and restrictions, as the Management Committee may, by
notification in the official Gazette, specify.

(3) A person, who receives a service, which is a taxable service by virtue of

clause (b) of sub-section (1) 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 sent to the person; or
(c) consideration for the service is paid by the person,

-whichever is earlier and all the provisions of this Act and 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.

Explanation.---Any person, who is not registered or required to be registered for the

purposes of this Act, whether as a service-provider or otherwise but is required to withhold
and pay or otherwise pay tax in terms of any provisions of this Act or rules, shall be deemed
as a registered person for all legal purposes under this Act, including non-filing or non-
submission of any information or document and such person shall, regardless of the place
of residence, business or other activity, comply with such registration, enrolment or other
obligations or formalities as may be specified by the Management Committee.

(4) The [Management Committee may,]14 through notification in the official

Gazette, require any person or class of persons engaged in providing only exempt service
or services to necessarily obtain registration under this Act and file return in such form and
manner as my specified in the notification.

(5) It shall be reasonable to believe that a person is registered under this Act, if
the tax profile of that person is available on the website of the Authority.

(6) A person, who is required to be registered, shall apply for registration in

such manner and mode as may be specified by the Management Committee, not later than
fifteen days, before the day on which the person becomes liable to be registered.

(7) If the Management Committee or authorized officer, as the case may be, is
satisfied that the person is liable for registration, the Management Committee or authorized
officer shall, within fifteen days of receiving the application,-

(a) register the person; and

(b) notify the person of the registration, the day on which it takes
effect, and the registration number issued to the person.

14
Substituted through Finance Act, 2024 (assented on: 06th June 2024) for the words and commas “Policy Board may, with
prior approval of Government,”.
22
 (c) Where a person, who is not required to be registered, applies for
registration, the Management Committee or authorized officer shall,
within fifteen days of receiving the application, notify the person of
the decision on the application, and if- the Management Committee
or authorized officer registers the person, the notice shall state the
day on which the registration takes effect and the registration number
issued to the person; or
(d) the Management Committee or authorized officer rejects the
application, notify the person of the reasons for the decision and
outlining the person’s right to appeal against the decision.

(8) The Management Committee shall issue every registered person with a
registration number through its computerized system for the purpose of this Act.

30. Voluntary registration.---(1) A person, who provides a taxable service in the

course of an economic activity but is not required to be registered for any reason, may
apply for voluntary registration at any time.

(2) If such person applies for registration under sub-section (1), the
Management Committee or authorized officer may register the person, if it is satisfied that-

(a) the person has a place of business at which he carries on an

economic activity;
(b) there are reasonable grounds to believe that the person shall keep
proper records and file regular returns as specified under this Act
and prescribed under the rules; and
(c) 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 taxation laws.

31. Compulsory registration.---(1) If the Management Committee or authorized

officer is satisfied, on the basis of any information that a person who is required to be
registered under this Act, has not applied for registration, the Management Committee or
authorized officer shall register the person through an order to be issued, in writing, and
such person shall be deemed to have been registered from the date he became, liable to
registration:

Provided that no person shall be registered compulsorily without being given an

advance notice and an opportunity of being heard in such manner as may be necessary and
every order for compulsory registration, issued under this section, shall be appealable.

(2) The provisions of this section shall, mutatis mutandis and to the extent
required, apply to persons required to withhold and pay tax under this Act.

32. Suspension of registration.---(1) Subject to sub-section (3), the Management

Committee may temporarily inactivate the registration of a registered person if it is satisfied
that such registered person-

(a) is not entitled to be registered; or

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

(2) The Management Committee shall give notice to a registered person stating
the reasons for temporary inactivation of the registered person’s registration and the
remedial actions required to be taken by the registered person in such time as may be
specified in the notice.
23
 (3) In case the Management Committee is not satisfied with the response of the
registered person or no remedial actions taken by him or does not receive any response in the
specified time, as required under sub-section (2), the Management Committee may suspend
his registration.

(4) The Management Committee may remove the name of the suspended
person from the list of registered persons published on its website.

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

(6) Where, at the expiry of sixty days, the suspension has not been withdrawn,
the Management Committee may-

(a) institute proceedings against the person in respect of the alleged

non-compliance under this Act; or
(b) re-instate the person’s registration; or
(c) cancel the person’s registration, if neither of the actions in clauses
(a) and (b) is taken.

(7) No registration shall be cancelled unless the Management Committee, 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 this Act or the rules.

33. De-registration.---(1) The Management Committee 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 29, he may, in the manner and
mode provided in the rules, make an application to the Management Committee to be de-
registered.

(3) If, upon receiving an application under sub-section (2), the Management
Committee is satisfied that the person is not required to be registered under this Act and
has fulfilled the obligations under this Act, it shall de-register such person.

(4) Where the Management Committee receives an application under sub-

section (2), it shall dispose of the same within a period of three months from the date of
receipt of the application, or within such extended period, not exceeding sixty days, as the
Management Committee may, for reasons to be recorded in writing, fix.

24
 CHAPTER-VI
INVOICING, BOOK KEEPINGAND AUDIT PROCEEDINGS

34. Issuance of tax invoices.---(1) A registered person, providing a taxable service,

shall issue a serial 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) applicable rate of the tax;

(f) amount of the tax; and

(g) value inclusive of the tax.

(2) The Management Committee may, by notification in the official Gazette,

specify a modified format of 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 Management Committee 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
Management Committee as well as to the Collector, as may be specified.

35. Records.---(1) A registered person, providing or receiving a taxable service, as the

case may be, under this Act, 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 or received 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 or received, as the case may be,
indicating-

(i) the description and type of service;

(ii) the value of service;
(iii) the particulars of the person, to whom the service was
provided, or from whom the service was received; and
(iv) any other information as may be specified by the
Management Committee.
(b) record of exempt services;

(c) record of purchases, including imports of goods and services,

containing import documents, if any, purchase invoices and proof of
payment for the purchase thereof; and

(d) such other records as may be specified by the Management

Committee.

(2) Every person, applying for or required to obtain registration under this Act,
shall declare particulars of his bank account(s), intended to be used for the purposes of
business involving providing or rendering services, including purchases of goods and
services used as inputs.

(3) The Management Committee may, by notification in the official Gazette,

specify that any person or class of persons, registered under this Act, shall use such
25
electronic fiscal cash registers in such manner as are approved by the Management
Committee.

(4) The Policy Board 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 Act, 2017 (Act No. XIX of 2017), may 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.

36. 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 of the Authority, not below
the rank of Assistant Collector, 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.

37. Audit proceedings.---(1) An authorized officer or the Collector may, on the basis of
the return or returns or statements or information, furnished by or required by the said
officer from a registered person, or the records maintained under this Act or any other law,
for the time being in force, and rules made or notifications issued thereunder, conduct an audit
of such person; provided that nothing shall bar the authorized officer to enlist any
document, data or information from any other source for use in the audit.

(2) In case the Management Committee or the Collector has any information,
showing that such registered person is involved in tax fraud or evasion of tax, it may
authorize an officer of the Authority, not below the rank of Assistant Collector, 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 authorized officer is to conduct an audit under this section, 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:

Provided that the authorized officer may, with the permission of the Collector,
conduct the audit in the place of business or the office of the registered person, directing
him to produce the records and documents in such premises as indicated in the notice:
Provided further that for the purpose of this section, the audit proceedings may be
conducted electronically through video link or any other facility as prescribed by the Policy
Board through regulations.

(4) The authorized officer shall conduct an audit and issue an audit observation,
pointing out the contraventions of this Act or the rules and the amount of tax evaded or short-
paid, and the registered person may, within such period as specified in 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 of the Authority shall issue a
contravention report, specifying the amount of tax or charge that has not been levied or has
been short-levied or any claim of inadmissible input tax credit or tax not withheld or short
withheld or withheld but not deposited or any other violation of any provision of this Act
or the rules.
26
 (6) After completion of the audit under this section or any other provision of
this Act or the rules, the officer of the Authority, having pecuniary jurisdiction in terms of
section 45 of this Act, shall, if required, pass an order under section 27 of this Act,
determining the correct amount of payable tax, charging default surcharge and imposing a
penalty.

(7) Notwithstanding the penalties, as specified in section 53 of this Act,-

(a) if a registered person wishes to deposit the amount of tax short paid or
amount of tax evaded along-with default surcharge voluntarily,
whenever it comes to his notice, he shall, before receipt of notice of
audit, file a revised return and shall deposit the amount short paid or
amount of tax 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 tax short paid or
amount of tax 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 shall file a revised return and shall deposit the
evaded amount of tax, default surcharge under section 54 of this Act,
and twenty percent of the penalty payable under section 53 of this
Act, in which case a show cause notice in lieu of the audit report
shall not be issued in the matter; and

(c) if a registered person wishes to deposit the amount of tax short paid or
amount of tax evaded along-with default surcharge after issuance of
show cause notice, he shall file a revised return and shall deposit the
evaded amount of tax, default surcharge under section 54 of this Act,
and fifty percent of the penalty payable under section 53 of this Act
and thereafter, the show cause notice shall abate.

38. Special audit.---(1) The Management Committee may, with the approval of Policy
Board, by notification in the official Gazette, appoint a special audit panel, consisting of
accountants or persons as may be specified, for conducting a special audit of the records of
any registered person or class of registered persons.

(2) Notwithstanding that the records of a registered person have been audited
by an officer appointed under section 43 of this Act, the Management Committee may
direct a special panel, appointed under sub-section (1), to conduct fresh or new audit of
the records of any registered person for the same period.

(3) A special panel, appointed under sub-section (1), shall carry out such
functions and exercise such powers as may be conferred by the Authority to its own officers
under any of the provisions of this Act.

(4) The cost of special audit shall be met by the Authority from the budgeted
funds.

(5) Every special panel, appointed under this section shall be headed and
supervised by such officer of the Authority as may be nominated in this behalf.

(6) Where so required by the Management Committee, the special panel

appointed under this section may be required to conduct audit of such other business affairs
or matters of the registered person as are considered or deemed to have implications on tax
compliance under this Act.

(7) Nothing shall bar the Government or the Management Committee to

conduct audit including special forensic and investigation etc. of any registered person or
class of registered persons, any taxable or class of taxable services jointly in collaboration
and association with other tax authorities or boards whether Federal or Provincial, in the
country.

27
Explanation.---For the purposes of this section or section 27 of this Act, the audit of
records include audit of the tax affairs of the registered person under this Act and the rules.

28
 CHAPTER-VII RETURNS

39. 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 the Management
Committee or any other office through the computerized system or any other manner or
mode as may be specified by the Management Committee, indicating the tax due and paid
during a tax period and such other information, as may be specified.

(2) Notwithstanding anything contained in sub-section (1), the Management

Committee may, by notification in the official Gazette, require any registered person or
class of registered persons to submit any other periodic return in lieu of a monthly return.

(3) Notwithstanding anything contained in sub-section (1), the Management

Committee may, by notification in the official Gazette, require any registered person or
class of registered persons to submit such returns, as may be prescribed, for any period 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 Management Committee, shall be
deemed to be a return for the purpose of sub-section (1), sub-section (2) or sub-section (3)
and the Policy Board may, by regulations, determine 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, separate entries
shall be made in respect of each portion of tax period showing the application of different
rates of tax in the return for that tax period.

(6) A registered person may, after prior permission of the Collector, file a
revised return, within six months of filing a return under sub-section (1), sub-section (2) or
sub-section (3) to correct any omission or wrong declaration made therein and to deposit
any amount of tax not paid or short-paid.

(7) Where any person or class of persons are engaged in providing any service or
services, which are either exempt under this Act, including a notification issued thereunder
or are otherwise not taxable for the purposes of this Act, the Management Committee may
require any such person or class of persons to regularly file monthly or periodic
declarations or returns, containing such correct and verifiable information, as may be
required to be provided in such declaration or return and every such person or class of
persons shall be under a legal obligation to file such declaration or return and any violation,
relating thereto, shall be treated as non-filing of the return due under this Act, except that
no tax liability per se other than liability for penalty, may be imposed, shall accrue in
respect thereof.

40. Special returns.---In addition to the return or returns specified under section 39 of
this Act, the Collector 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.

41. Final returns.---If a person, who applies for de-registration in terms of section 33
of this Act, shall, before such de-registration, furnish a final return to the Management
Committee or the Collector in the specified form in such manner and at such time as may be
directed by the Management Committee or the Collector.

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

29
 CHAPTER-VIII
APPOINTMENT OF AUTHORITIES AND THEIR POWERS

43. Appointments of authorities.---(1) For the purposes of this Act and the rules, the
Management Committee may, by notification in the official Gazette, appoint in relation to
any area, person, taxable service or cases specified in the notification, any person to be-

(a) a Collector;
(b) a Collector (Appeals);
(c) an Additional Collector;
(d) a Deputy Collector;
(e) an Assistant Collector;
(f) an Audit Officer;
(g) an Inspector; or
(h) any other officer of the Authority with any other designation.

(2) An officer, appointed under sub-section (1), shall exercise such powers,
pecuniary and territorial jurisdiction, and discharge such duties as are conferred on him
under this Act, rules or order issued by the Management Committee through a notification in
the official Gazette and shall also be empowered and competent to exercise all powers and
discharge all duties or functions conferred upon any officer sub-ordinate to him.

(3) The Management Committee may, by general or special order, impose such
limitations, restrictions or conditions on the exercise of such powers and discharge of such
functions as it may deem fit.

44. Distribution of powers.---(1) The Management Committee may, by notification in

the official Gazette and subject to such limitations or conditions as may be specified
therein, empower by name or designation-

(a) an Additional Collector to exercise or perform any of the powers or

function of the Collector (Appeals);

(b) an Additional Collector to exercise or perform any of the powers or

function of the Collector;
(c) a Deputy Collector to exercise or perform any of the powers or
function of the Additional Collector;
(d) an Assistant Collector to exercise or perform any of the powers or
function of the Deputy Collector; and
(e) any other officer of the Authority to exercise or perform any of the
powers or function of an Assistant Collector.

(2) The officer of the Authority, to whom any powers or functions are delegated
under this section, shall not further delegate such powers.

(3) The officer, designated or empowered as Collector (Appeals), shall not sit in
appeal against his own orders in original. In the interest of natural justice, the Management
Committee shall make alternate arrangements in such cases.

45. Powers of adjudication.---(1) In respect of cases, involving determination of tax

liability, including assessment of tax, recovery of tax not levied or short-levied, 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
pecuniary jurisdiction and powers of adjudication of the officers shall be as follows-

30
 (a) Additional Collector: Cases without any restriction as to the amount
of the tax involved or amount erroneously refunded;
(b) Deputy Collector: Cases where the amount of the tax involved or the
amount erroneously refunded exceeds two and half million rupees,
but does not exceed five million rupees;
(c) Assistant Collector: Cases where the amount of the tax involved or
the amount erroneously refunded does not exceed two and a half
million rupees; and
(d) Other officers of the Authority: Such cases, other than those
mentioned above, as may be prescribed.
(2) The Collector may adjudicate any case, falling in the jurisdiction and
powers of any officer subordinate to him, in appeal against the order passed by the
Collector in such case shall lie to the Appellate Tribunal.

(3) The Management Committee may specify the system of adjudication,

including transfer of cases, changes in pecuniary limits or extension of time limit, within
the meaning of section 90 of this Act.

Explanation.---For the purposes of this section, the term “tax” means the principal amount
of the tax other than penalty and default surcharge and in case where only penalty or default
surcharge is involved, the amount of penalty or default surcharge.

46. Special Judges.---(1) Government may, in consultation with Peshawar High Court,
by notification in the official Gazette, appoint any person, who is serving or has served as
District and Sessions Judge for an extendable period of three years 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 or notifications issued thereunder.

(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 such duties
of the Special Judge for the district and in his absence, such duties shall be performed by
the senior most Additional District and Sessions Judge of such district.

47. Cognizance of offence. ---(1) The Special Judge may, within the limits of his
jurisdiction, take cognizance of any offence punishable by him under this Act upon-

(a) a report in writing made by an officer of the Authority, not below

the rank of Assistant Collector with the approval of the Collector, or
by an authorized officer;
(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) Upon receipt of a report under clause (a) of sub-section (1), the Special
Judge shall proceed with the trial of the accused.

(3) Upon receipt of a complaint or information under clause (b) or on the basis of
his own knowledge under clause (c) of subsection (1), the Special Judge shall, before
issuing a summon or warrant for appearance of the accused person, hold a preliminary
inquiry for the purpose of ascertaining the truth or falsehood of the complaint, or direct any
Magistrate or any officer of the Authority to hold such inquiry and submit a report, and
such Magistrate or officer of the Authority, 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 of the Authority, the Special Judge is of the opinion that-

31
 (a) there is insufficient ground for proceeding, he may dismiss the
complaint; or
(b) there is sufficient ground for proceeding, he may proceed against
the accused person in accordance with law.
(5) A Special Judge or a Magistrate or an officer of the Authority, 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.

48. Application of the Code.---(1) The provisions of the Code, 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 Sessions for the purposes of
the said Code and the provisions of Chapter XXII-A of the Code, so far as applicable and
with the necessary modifications, shall apply to the trial of cases by the Special Judge under
this Act.

(2) For the purposes of sub-section (1), the Code, shall have effect as if an
offence punishable under this Act, were one of the offences referred to in sub-section (1) of
section 337 of the Code:

Provided that nothing in this section shall restrict any officer of the Authority from
undertaking and completing the adjudicatory process or proceedings for the purpose of
determination and assessment of tax, including default surcharge and penalties in any case
sub-juice for trial or any other proceedings before the Special Judge.

49. Exclusive jurisdiction of Special Judge.---No court other than the Court of
Special Judge shall conduct criminal trial for an offence or, as the case may be, a part of an
offence, punishable under this Act, which falls under his jurisdiction in terms of column 4
of the table under section 53 of this Act.

50. Place of sitting.---The 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.

51. Persons who may conduct prosecutions.---(1) An officer of the Authority, not
below the rank of an Assistant Collector, shall be competent to conduct a prosecution
before a Special Judge for and on behalf of Government.

(2) Prosecution, conducted under this Act before the Special Judge, may only be
withdrawn by the Management Committee with the approval of Policy Board or, as the
case may be, on the direction of Government.

52. Appeal to the High Court.---(1) Any person, including Government, the
Management Committee or any officer of the Authority, aggrieved by any order passed or
decision made by a Special Judge under this Act or under the Code, may, subject to the
provisions of Chapters XXXI and XXXII of the said Code, within sixty days from the date
of the order of the decision, prefer an appeal to the High Court.

(2) Except as otherwise provided in sub-section (1), the provisions of the

Limitation Act, 1908 (Act No. V of 1908), shall apply to an appeal preferred under sub-
section (1) of this Act.

32
 CHAPTER-IX
OFFENCES, PENALTIES AND DEFAULT SURCHARGE

53. Offences and penalties.---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 againstthat offence
in Column (3), imposed in accordance with the jurisdiction specified in Column (4)
thereof.

TABLE

1. 2. 3. 4.
S. Offences. Punishment or Competent
No Penalty. Jurisdiction.
1. Where a person who is Such person shall be Officer of the
required to apply for liable to pay a penalty of Authority competent
registration under this Act one hundred thousand under this Act.
fails to make an application rupees or five percent of
for registration before the amount of the tax he
providing any taxable would have been liable
services. to pay had he been
registered, whichever is
higher provided that in
the case of non-
compliance of
compulsory
registration, the
minimum penalty shall
be two hundred
thousand rupees.

2. Where a person who is Such person shall be Special Judge.

required to get himself liable to imprisonment
registered under this Act, for a term which may
fails to get registered within extend to one year, or
ninety days of providing with fine which may
taxable services or who fails extend to the amount of
to comply with compulsory the tax he would have
registration. been liable to pay had he
been registered, or with
both.

3. Where a person fails to Such person shall be Officer of the

furnish a return within the liable to pay a penalty of Authority competent
due date. nine thousand rupees under this Act.
per tax period or a
fraction thereof
provided that if a return
is filed within ten days
of the due date, he shall
pay a penalty of three
hundred rupees for each
day of default.

33
 4. Where a person fails to issue Such person shall be Officer of the
tax invoice. liable to pay a penalty of Authority competent
one hundred thousand under this Act.
rupees or five percent of
the tax involved,
whichever is higher.

[4A. Were any registered person, Such person shall be Officer of the
who after integration of its liable to pay a penalty of Authority competent
computerized system with the rupees one hundred under this Act.]15
computer system of the thousand (100,000) or
authority i.e., through five percent (05%) of
Restaurant Invoice the tax involved,
Management System (RIMS) whichever is higher, for
or Invoice Management and each instance of non-
Reporting system (IMRS) or compliance.
any other prescribed system,
fails to comply with e-
invoicing system or issues
invoices outside the e-
invoicing system or failed to
upload invoices on
Restaurants Invoice
Management System (RIMS)
or Invoice Management and
Reporting System (IMRS) on
real-time basis.
5. Where a person fails to Such person shall be Officer of the
deposit the amount of the tax liable to pay a penalty of Authority competent
due or any part thereof in ten thousand rupees or under this Act.
time or in the manner five percent of the tax
provided under this Act or payable for that period,
the rules made or whichever is higher
notifications issued provided that no penalty
thereunder. shall be levied if any
miscalculation is made
for the first time during
a financial year.
6. If a person does not pay the Such person shall be Special Judge.
amount of tax due even after liable to imprisonment
the expiry of a period of sixty for a term which may
days of issuance of the notice extend to three years, or
for such payment by an with fine which may
officer, not below the rank of extend to the amount of
Assistant Collector. the unpaid tax, or with
both.
7. Where a person fails to Such person shall pay a Officer of the
properly maintain or retain penalty of ten thousand Authority competent
records required under this rupees or five percent of under this Act.
Act or the rules made and the total tax paid or
notifications issued assessed on the basis of
thereunder. available information,
to be payable for the tax
period or periods for
which he has failed to
maintain the required
record, whichever is
higher.

15
Inserted through Finance Act, 2024 (assented on: 06th June 2024)

34
 [7A Where a registered person, Such person shall be Officer of the
including a person liable to pay a penalty of Authority competent
compulsorily registered rupees two hundred under this Act.]16
under this Act, who, in non- thousand (200,000) for
compliance to the provisions the first instance of non-
of this Act, fails to produce compliance- In case of
information/ records/ non-compliance for the
documents on receipt of a second time, such
notice by an officer of the person shall be liable to
Authority, not below the rank pay a penalty of rupees
of Assistant Collector. five hundred thousand
(500,000)- In case of
non-compliance for the
third time, such person
shall be liable to pay a
penalty of rupees one
million (1,000,000).
8. Where a person knowingly, (i) Such person shall be (i) Officer of the
deliberately, intentionally or liable to pay a penalty of Authority competent
fraudulently- one hundred thousand under this Act.
rupees or one hundred
(a) submits a false, fake, percent of the tax
untrue or forged document to payable for the tax
the Management Committee period or periods to
or any of officer of the which the offence
Authority; or relates, whichever is
higher.
(b) destroys, alters, mutilates
or falsifies the records (ii) He shall further be (ii) Special Judge
including a tax invoice; liable to imprisonment
for a term which may
(c) makes a false statement, extend to five years or
false declaration, false with fine which may
representation, or false extend to an amount
personification, or gives any equal to the tax payable
false data or information; or for the tax period or
periods t o w h i c h t h e
commits, c a u s e s t o offence relates, or with
commit or attempts to both.
commit tax fraud, or abets or
connives in the commission
of tax fraud equal to one
hundred thousand rupees or
(d) more.

16
Inserted through Finance Act, 2024 (assented on: 06th June 2024)

35
 9. [Where a person violates any (i) Such person shall be (i) Officer of the
embargo placed on providing liable to pay a penalty of Authority competent
of service or violates the fifty thousand rupees or under this Act.
restrictions imposed vide ten percent of the
sealing of business premises amount of the tax sought
in connection with recovery to be recovered,
of tax.]17 whichever is higher.

(ii) He shall, further be (ii) Special Judge.

liable to imprisonment
for a term which may
extend to one year, or
with fine which may
extend to an amount
equal to the amount of
the tax sought to be
recovered, or with both.

10. Where a person obstructs any (i) Such person shall be (i) Officer of the
officer of the Authority in the liable to pay a penalty of Authority competent
performance of his official fifty thousand rupees or under this Act.
duties under the law. one hundred percent of
the tax payable for the
tax period to which the
offence of such person
relates, whichever is
higher.

(ii) He shall be further (ii) Special Judge.

liable to imprisonment
for a term which may
extend to one year or
with fine not exceeding
fifty thousand rupees or
with both.

11. Where a person fails to fulfill Such person shall be Officer of the
any of the conditions, liable to pay a penalty of Authority competent
limitations or restrictions twenty-five thousand under this Act.
prescribed in a notification rupees or three percent
issued under any of the of the tax payable for
provisions of this Act or the the tax period to which
rules made thereunder, or the offence relates,
where a person contravenes whichever is higher.
any provision of this Act or
the rules made thereunder for
which no penalty has
specifically been provided in
this section.
12. Where a person repeats an Such person shall be (i) Officer of the
offence for which a liable to punishment Authority competent
punishment is provided equal to twice the under this Act; or
under this Act. punishment provided
under this Act for such (ii) Special Judge
offence.
- as the case may be

Substituted through Finance Act, 2024 (assented on: 06th June 2024) for the following: “Where a person violates any
17

embargo placed on providing of service or services in connection with recovery of tax.”

36
13. Where a person- Such person shall pay a (i) Officer of the
penalty of twenty- five Authority competent
(a) knowingly and without thousand rupees or one under this Act.
any lawful authority or hundred percent of the
excuse gains access to the amount equal to the loss
computerized system of the caused to the tax revenue.
Authority; or
He shall further be liable Special Judge.
(b) uses, discloses or to imprisonment for a
publishes or otherwise term which may extend
disseminates, without any to three years, or with
lawful authority or excuse, fine which may extend to
any information obtained an amount equal to the
from the said system; or loss caused to the tax
revenue, or with both.
(c) falsifies any record or
information stored in the said
system; or

(d) knowingly or dishonestly

damages or impairs the
said system; or

(e) knowingly or dishonestly

damages or impairs any
duplicate tape or disc or other
medium on which any
information obtained from
the said system is kept or
stored; or

(f) uses. without any lawful

authority or excuse, unique
user identifier of any other
registered user to
authenticate a transmission
of information to the said
system; or
fails to comply with or
contravenes any of the
conditions prescribed for
security of unique user
identifier.

37
14. Where any person (i) Such person shall (i) Officer of the
intentionally, deliberately or pay a penalty of one Authority competent
fraudulently intervenes, hundred thousand under this Act.
alters or damages any rupees or one hundred
electronically filed invoices percent of the amount
mechanism or system equal to the loss caused
prescribed or specified for or believed to be caused,
the purpose of avoiding to the tax revenue,
correct payment of due tax. whichever is higher.

(ii) He shall further be

liable to imprisonment (ii) Special Judge
for a term which may
extend to three years, or
with fine which may
extend to an amount
equal to the loss caused
to the tax revenue, or
with both.

15. Where an officer of the Such officer shall be Special Judge.

Authority acts or conducts liable to imprisonment
himself in a manner resulting for a term which may
in vexatious prosecution or extend to three years or
undue detriment of a with fine not exceeding
taxpayer. fifty thousand rupees or
with both.

16. Where a bank fails to attach (i) Such bank shall be (i) Officer of the
or delays in attaching the liable to penalty of one Authority competent
bank account of the person hundred thousand under this Act.
from whom tax is sought to rupees or five percent of
be recovered, specified in the the amount of tax
notice issued by the officer of involved, whichever is
the Authority or fails or higher.
delays in payment of such
amount. The concerned officer Special Judge
of such bank shall
further be liable, upon
conviction by the
Special Judge, to
imprisonment which
may extend to one year
or with fine which may
extend to five percent of
the amount of tax
involved, or with both.
17. Where a person fails to Such person shall be Officer of the Authority
withhold or withholds but liable to a penalty of competent under this
fails to deposit the tax. twenty five thousand Act.
rupees or five percent of
the amount of tax
involved, whichever is
higher.

38
 18. Where an individual, who Such person shall be Officer of the
during the course of business liable to a penalty of Authority competent
is making the payment on twenty five thousand under this Act.
behalf of the withholding rupees or five percent of
agent but fails to withhold or the amount of tax
deposit the due tax. involved, whichever is
higher.

19. Where any person- (i) Such person shall be (i) Officer of the
liable to a penalty of Authority competent
(a) fails to make the fifty thousand rupees or under this Act.
payment of ten percent of the
consideration for goods amount of consideration
or services from the or transaction involved,
business bank account whichever is higher.
to the service-provider
or supplier of goods, as
the case may be; or (ii) Such person shall,
further be liable, upon (ii) Special Judge
(b) fails to receive the conviction by the
payment of Special Judge, to
consideration for imprisonment for a term
services in the business which may extend to six
bank account of the months, or with fine or
service-provider, as the with fine not exceeding
case may be. twenty thousand rupees
or with both.

Explanation-I: For the purpose of this section, in situations, where penalty or penalties are to
be adjudicated or other penal actions are to be initiated or taken in terms of this section, in
respect of any withholding agent, the word and expressions, carrying meanings of a “service-
provider”, shall be construed as “service-recipient” or if so required, as “withholding agent”.

Explanation-II.---For the purpose of this section, in situations, where the officer of the
Authority, competent under this Act is of the opinion, at any stage of the proceedings but
before signing the order, that the accused person ought to receive a more severe punishment
than that which the officer of the Authority is empowered to inflict or the case is one which
ought to be tried by the Special Judge, he may record the opinion and send the case to the
Special Judge for trial.

54. Default surcharge.---(1) Notwithstanding anything contained in the provisions of

section 27 of this Act, 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 53 of this Act, levy and pay default surcharge-

(a) at the rate of [twenty four percent (24%)]18 per annum, amount of tax or
charge or the amount of refund erroneously made; 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 [thirty six
percent (36%)]19 per annum, 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,-

18
Substituted through Finance Act, 2024 (assented on: 06th June 2024) for the words, brackets, figure and expression “twelve
percent (12%).
19
Substituted through Finance Act, 2024 (assented on: 06th June 2024) for the words, brackets, figure and expression “twenty
four percent (24%).

39
 (a) in the case of inadmissible input tax credit or refund, the period of
default shall be reckoned from the date of adjustment of such credit
or, as the case may be, refund is received; and
(b) in the case of non-payment of tax or part thereof, the period of
default shall be reckoned from the 16th day of a month (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-I.---For the purpose of this section, the term “tax due”
does not include the amount of penalty.
Explanation-II.---For the purpose of this section, the period of
default less than a month shall be considered as a full month default.

55. Exemption from penalty and default surcharge.---(1)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 in such notification.

(2) Government, at the end of each financial year, shall lay before the
Provincial Assembly of the Khyber Pakhtunkhwa all the notifications made under sub
section (1).

56. Compounding of offences.---Notwithstanding anything contained in this Act,

where any person has committed any offence, warranting prosecution under this Act, the
Management Committee 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 Management Committee under this Act and the rules.

57. Power to summon persons to give evidence and produce documents.---(1) An

officer of the Authority, not below the rank of Assistant Collector, 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 or investigation, 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 of the Authority may direct.

(3) Notwithstanding anything contained in sub-sections (1) and (2), a person

who is exempted from personal appearance in a Court under sections 132 and 133 of the
Code of Civil Procedure (Act No. V of 1908), shall not be required to appear in person.

(4) Any proceedings, under this Act or the rules before an officer of the
Authority, shall be deemed to be judicial proceedings, within the meanings of sections 193
and 228 of the Pakistan Penal Code, 1860 (Act XLV of1860).
58. Power to arrest and prosecute.---(1) An authorized officer, 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.

(3) Where a 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 of the Authority has reason to believe, is personally responsible for actions of
the company, contributing the tax fraud or any offence, warranting prosecution under this
Act, shall be liable to arrest:

Provided that any arrest under this sub-section shall not absolve the company from

40
the liabilities of payment of tax, default surcharge and any penalty imposed or due under
this Act.

59. Procedure to be followed on arrest of a person.---(1) When an officer of the

Authority arrests a person under section 58 of this Act, he shall immediately intimate the
fact of the 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 of the
Authority 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 of the
Authority 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 of the Authority
shall exercise the same powers as are conferred upon or exercisable by an officer in charge
of a police station under the Code, but such officer shall exercise such powers, subject to
the foregoing provisions of this section, while holding an inquiry under this Act.

(9) If an officer of the Authority, 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.

41
 (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 of the Authority, holding an inquiry under this section, shall
maintain a register to be called the “Register of Arrests and Detentions” in the form
prescribed by 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 aforesaid entries shall be produced before the Special Judge,
whenever such officer is so directed by the Special Judge.

(12) After completing the inquiry, the officer of the Authority shall, as early as
possible, submit to the Special Judge a complaint in the same form and manner in which
the officer in charge of a police station submits a report, before a Court.
(13) The Magistrate may record any statement or confession, during inquiry or
investigation under this Act, in accordance with the provisions of section 164 of the Code.

60. Officers to have access to premises, stocks, accounts and records.---(1) Any
officer of Authority, not below the rank of Assistant Collector, shall, [with the prior
approval of the Collector or Management Committee,]20 in his relevant jurisdiction, have
free access to the business premises, registered office or any other place, where any stocks,
business records or documents, required under this Act, are kept or maintained by any
registered person or a person liable for registration or whose business activities are covered
under this Act 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 goods, stocks, 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, to be maintained in any form or mode and may take
into his custody such records, statements, diskettes, documents or any part thereof, in
original or copies thereof, in such form as the authorized officer may deem fit against and
sign the 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 such 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 officer of the Authority in the course of inquiry or investigation
under this section.

(4) The records and material etc., taken into custody, shall be documented into
an inventory statement, to be signed jointly by the officer of the Authority and the person
concerned or his agent or representative; provided that refusal to sign the inventory
statement by such person or his agent or representative shall not affect the legality or
validity of the inventory statement and its contents.
61. Obligation to produce documents and provide information.---(1)

20
Inserted through Finance Act, 2024 (assented on: 06th June 2024).

42
Notwithstanding anything contained in this Act or any other law for the time being in force,
any person, required to maintain any record under this Act and the rules, shall, on demand
by an officer of the Authority, not below the rank of an Assistant Collector, by notice in
writing, as and when specified in the notice,-
(a) produce, for examination, such documents or records which the
officer of the Authority considers necessary or relevant to the audit,
inquiry, investigation or any other purpose under this Act;

(b) allow the officer of the Authority to take extracts from or make
copies of such documents, records; and
(c) appear before the officer of the Authority 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 of the Authority, conducting an audit, inquiry or investigation
under this 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 of the Authority, is relevant for the audit,
inquiry or investigation.
(3) The Management Committee may require, in writing, any person,
department, company or organization, as the case may be, to provide any information or
data held by that person, department, company or organization, which, in the opinion of
the Management Committee, is required for the purposes of this Act.

(4) Every person, department, company or organization shall furnish the

information and data and documents, requisitioned by the Management Committee or the
officer of the Authority under sub-section (2) or sub-section (3) of this section, within the
time specified in the notice, issued by the Management Committee or officer of the
Authority.

62. Searches under warrant.---(1) Where any officer of the Authority 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, enter that place and cause a search to be made at anytime.

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

(3) Notwithstanding anything contained in this Act, where an officer of the

Authority, not below the rank of Collector, has reason to believe that a person has failed to
comply with his obligations under the Act or the rules, he may, by an order, in writing, seal
the business premises of that person for a period which may extend to one month upon
giving a notice in writing to this effect.

63. Posting of an officer of the Authority to business premises.---(1) Subject to such

conditions and restrictions, as it deem fit to impose, the Management Committee or the
Collector may post an officer of the Authority to the premises of a registered person to
monitor the provision of services by such registered person.

(2) A person, to whose business premises an officer of the Authority is posted

under this section, shall provide at his own cost, all facilities to meet the departmental
requirements of such posting as may be determined by the Management Committee or the
Collector.

(3) No registered person shall claim, nor shall he be otherwise entitled to any
financial or other compensation for the expenses incurred by him to provide the facilities
under sub-section (2).

43
 64. Monitoring or tracking by electronic or other means.---(1) Subject to such
conditions, restrictions and procedure, as it may deem fit to impose or specify, the
Management Committee may, by notification in the official Gazette, specify any registered
person or class of registered persons or any of the services or class of services, in respect of
which monitoring or tracking of provision or receipt of service or services, may be
implemented through electronic or other means as may be prescribed.

(2) The Policy Board may, in the prescribed manner, devise and implement an
electronic system for monitoring and capturing the transactions recorded or the invoices
issued by a registered person or a class of registered persons or a service or services or
class of services, and transferring the information, obtained by such monitoring or
capturing of transactions or invoices, to the computer systems of the Authority on real time
basis or otherwise.

(3) From the date as may be specified by the Management Committee from
time to time, the persons, providing or rendering taxable services, shall compulsorily use
such electronic means or systems, including fiscal cash registers, for issuance of tax invoice
under the e-invoicing system.

65. Revision.---(1) The Management Committee or, as the case maybe, Collector may,
of its or 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 of the rules for
the purpose of satisfying himself as to the legality or propriety of any decision or order passed
therein by an officer of the Authority, pass such order as he may think fit:

Provided that no order imposing or enhancing any penalty, fine or requiring

payment of a greater amount of 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:

[Provided further that in any case where the decision or order of an officer of the
Authority is revised by the Collector, the revised order passed under this section shall be
communicated to the Management Committee by the Collector within seven days of
passing of such orders.]21

(2) The Management Committee or Collector shall not revise any order under
sub-section (1), if-

(a) an appeal under section 66 is pending or the matter has been referred
for resolution under section 73;

(b) where an appeal against the order lies under section 66, the time
within which such appeal may be made has not expired or the person
has not waived his right of appeal;

(c) in the case of an application made by a person, the application has

not been made within one hundred and eighty days of the date on
which such order was served on the person, unless the Collector 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 Collector 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.

(3) No application for revision of an assessment shall be made under sub-

section (1), unless the amount of tax due under the assessment that is not in dispute has
been paid by the taxpayer.

21
Added through Finance Act, 2024 (assented on: 06th June 2024).

44
 CHAPTER-X
APPEALS AND OTHER REMEDIES

66. Appeals.---(1) Any aggrieved person, other than the Management Committee or
any of employee of the Authority, may appeal to the Collector (Appeals) against any order
passed by an officer of the Authority, other than the Collector, under-

(a) section 27 for assessment of tax and recovery of tax not levied or
short-levied;
(b) sub-section (8) of section 29 for rejection of an application for
registration;
(c) sub-section (1) of section 31 for compulsory registration; or
(d) any other order passed under section 45.

(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 Collector (Appeals) within thirty days of the
date of receipt of a decision or order specified under sub-section (1).
(f) The specified fee shall be- where the appellant is a company, one
thousand rupees; or
(g) where the appellant is not a company, five hundred rupees.

(3) The Collector (Appeals) may, upon application, in writing, by the appellant,
admit an appeal after the expiration of the period specified in sub-section (1), if the
Collector (Appeals) is satisfied that the appellant was prevented by sufficient cause from
lodging the appeal within that period.

67. Procedure in appeal.---(1) The Collector (Appeals) shall give notice of the day
fixed for the hearing of the appeal to the appellant and to the authorized officer; provided
that nothing shall bar the officer, who has adjudicated the case or who has been nominated
by the Director General, to represent and defend the case before the Collector (Appeals).

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

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

(4) The Collector (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 Collector
(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 Collector (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 Collector (Appeals) may, before disposing of an appeal, call for such

45
particulars, documents, records or information as the Collector (Appeals) may require
respecting the matters arising in the appeal or cause further inquiry to be made by the
officer of the Authority.

68. Decision in appeal.---(1) In disposing of an appeal, lodged under section 66, the
Collector (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 Collector (Appeals) may make such further
inquiry as may be necessary provided that he shall in no case remand any matter for denovo
consideration:

Provided that a case may be remanded for de novo consideration, in special

circumstances, for reasons and purposes to be recorded by the Collector (Appeals) in
writing.

(3) The Collector (Appeals) shall communicate his order to the appellant and
the Management Committee.
(4) An order passed by the Collector (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 Collector (Appeals) may, for
reasons to be recorded in writing, fix.

(5) In computing the aforesaid time period, any period during which the
proceedings are adjourned, on account of a stay order or Alternative Dispute Resolution
proceedings under section 73 or the time, taken through adjournment by the appellant, shall
be excluded.

69. Appeal to the Appellate Tribunal.---(1) The aggrieved registered person or the
officer of the Authority, not below the rank of Additional Collector, may appeal to the
Appellate Tribunal against any order passed by the-

(a) Collector, under section 27 of this Act, for assessment of tax and
recovery of tax not levied or short-levied;

(b) Management Committee or Collector, under sub-section (8) of

section 29 of this Act, for rejection of application for registration;

(c) Management Committee or Collector, under sub-section (1) of

section 31 of this Act, for compulsory registration;

(d) Management Committee, under sub-section (3) of section 32 of this

Act, for suspension of registration;

(e) Management Committee, under sub-section (4) of section 33 of this

Act, for rejection of an application for de-registration;

(f) Collector, under sub-section (3) of section 62 of this Act, for

sealing of business premises; or

(g) Management Committee or Collector, under section 65 of this Act,

for revision;

(h) Collector (Appeals), under section 66 of this Act, including a stay

order under sub-section (4) of section 66; or

(i) any other appealable order passed by the Management Committee or

Collector under any other provisions of this Act:

Provided that unless otherwise directed by the Director

General in any specific case or class of cases, only an authorized

46
 officers shall appear to defend or plead the case in the Appellate
Tribunal.

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

(a) in the prescribed form;

(b) verified in the prescribed manner;

(c) accompanied 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 Collector (Appeals) or the Collector or
Management Committee, as the case may be, by the appellant
(e) The fee for an appeal shall be three thousand rupees, except when
filed by the Management Committee or the officer of the Authority.

(3) 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.

70. 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 on 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
Appellate 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 not 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 six months, 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 of the Authority or the Collector
(Appeals) for making such inquiry or taking such action as the
Appellate Tribunal may direct.

(5) The Appellate Tribunal shall communicate its order to the taxpayer and the
Collector.

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

71. Reference to the High Court.---(1) A reference to the High Court shall lie only if
a question of law is involved in a case.

(2) Any person, the Collector or the Management Committee may, within sixty

47
days from the date of communication of the final order of the Appellate Tribunal, prefer a
reference in the prescribed form along with a statement of the facts of the case and the
question of law involved in the case.

(3) The High Court may dismiss a reference in limine if it is satisfied that the
reference does not contain any question of law for determination.

(4) The reference, under this section, shall be heard by a Bench of at least two
Judges of the High Court and the provisions of section 98 of the Code of Civil Procedure
1908 (Act No. V of 1908) shall, as far as possible, apply to such reference.

(5) The High Court shall send a copy of the judgment under the seal of the
Court to the Appellate Tribunal.

(6) Notwithstanding that a reference has been filed in the High Court, the tax
shall be paid in accordance with the order of the Appellate Tribunal.

(7) If the tax liability is reduced by the High Court and the Management
Committee decides to seek leave to appeal to the Supreme Court, the Management
Committee may, within thirty days of the receipt of the judgment of the Court, apply to the
High Court to postpone the refund until the decision by the Supreme Court.

(8) Section 5 of the Limitation Act, 1908 (Act No. IX of 1908), shall apply to an
application made to the High Court under sub-section (1).

(9) A court fee of rupees one thousand shall be affixed on a reference under this
section except when it is filed by the Management Committee or the Collector.

72. 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 amount of the tax admitted
by the taxpayer based on the return filed under section 39 or as may be determined by the
Collector (Appeals) or the Appellate Tribunal where such return has not been filed.

73. Alternative 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 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 Management Committee 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 Management

Committee shall not accept an application under sub-section (1), where criminal
proceedings have been initiated or where, the Management Committee 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 Management Committee 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 Collector and nominees from a notified panel to be notified by the
Management Committee, from time to time consisting of chartered or cost accountants,
advocates, representatives of trade bodies or associations, retired officers of the rank of

48
 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
Management Committee within ninety days of its constitution in respect of the dispute.

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

(6) The Management Committee 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 tax as determined by the
Management Committee in its order under sub-section (6), and such order of the
Management Committee shall be submitted before the forum, Tribunal or the Court where the
matter is subjudice for consideration of orders as deemed appropriate.

49
 CHAPTER-XI RECOVERY
OF ARREARS

74. Recovery of arrears of tax.---(1)Subject to sub-section (2), where any amount of

tax is due from any person, an officer of the Authority not below the rank of Assistant
Collector 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 may be recoverable to pay to such officer the amount
specified in the notice; provided that where such person other than
Government department and other public sector non-commercial
institution, deliberately avoids compliance to such notice despite his
ability to do so, the officer of the Authority may issue a show cause
notice for imposition of personal penalty, not exceeding one hundred
thousand rupees;

(c) require, by notice in writing, any bank to attach that person’s bank
account(s)whether business or otherwise and recover the amount
payable without attachment and remit the money there from;
provided that where such notice has been issued and the officer in
charge of the bank branch concerned declines or otherwise is found
involved in any manipulation with the defaulter to avoid remittance of
the requested amount, the officer of the Authority may issue a show
cause notice for imposition of personal penalty not exceeding one
hundred thousand rupees;
(d) place embargo on any business premises of such person till such
amount is paid or recovered;

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

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

(g) attach, through direct or real-time collection, of sale proceeds of

services by appointing an official receiver for direct deposit thereof
with Government under relevant head of account; and

(h) recover such amount by attachment and sale of any movable or

immovable property, including attachment of bank account or
accounts 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 his or its guarantee,
bond or instrument deposited, filed or executed by the person as
security or surety for payment of tax due:

Provided that the officer of the Authority may, in

consequence of any notice, issued under any of the above clauses,
recover the due amount of tax, in the manner prescribed under the
rules or otherwise as deemed appropriate to make recovery of such
amount directly from the person, who is holding or is otherwise in
custody of any money, whether owned by or payable to the defaulter.

(2) If any arrears of tax, default surcharge, penalty or any other amount which is
payable by any person, cannot be recovered in the manner specified above, the

50
 Management Committee or the Collector may, for reasons to be recorded in writing, write-
off the arrears or amount in the specified manner.

(3) For the purpose of recovery of tax, penalty or any other demand raised under
this Act, the officer of the Authority shall have the same powers which under the Code of
Civil Procedure, 1908 (Act No. V of 1908), a Civil Court has for the purpose of recovery
of an amount due under a decree.

75. [Unpaid and short paid amounts recoverable without notice.---Notwithstanding

anything contained in this Act, where it is indicated from the return, submitted by the
registered person or, as the case may be, evident from the records and materials, including
but not limited to the Computer Systems, taken into custody by the authorized officer from
the business premises of the registered person that the tax has been charged or collected
from customer or service recipient but not paid or short paid by the registered person, the
unpaid or short paid amount of tax along with default surcharge may be recovered from
such person by attaching his bank accounts without giving him a show cause notice and
without prejudice to any other action specified under section 74 of this Act, rules or
regulations:

Provided that attachment of bank accounts of the registered person, for the purpose
of recovery of tax under this sub-section, shall only be exercised with proper prior approval
of the Collector or Management Committee, as the case may be:

Provided further that no penalty under section 53 of this Act shall be imposed unless
show-cause notice is given to such person.]22

22
Substituted through Finance Act, 2024 (assented on: 06th June 2024) for the following: “75. Short paid amounts recoverable
without notice.---Notwithstanding any of the provisions of this Act, where a registered person pays the amount of tax less than
the tax due as indicated in his return, the short-paid amount of tax along with default surcharge shall be recovered from such
person by attaching his bank accounts, without giving him a show cause notice and without prejudice to any other action
specified under section 74 of this Act or the rules:

Provided that no penalty under section 53 of this Act shall be imposed unless a show cause notice is given to such person.”

51
 CHAPTER-XII
AGENTS, REPRESENTATIVES AND E-INTERMEDIARIES

76. Agent.---For the purpose 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 on
behalf, or for the benefit of the individual;

(b) where the person is a company other than a Trust, a 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 Government, or local authority in Pakistan, any

individual responsible for accounting for the receipt and payment of
money or funds on behalf of Government or 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; or

(f) 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 government.

(2) Where the Court of Wards, the Administrator General, the 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 the purposes of this Act.

(3) Notwithstanding anything contained 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.

77. 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 on the
person, including the payment of tax.

(2) Subject to sub-section (5) of this section, any 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 by the registered
persons 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 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 Collector a certificate stating the amount to be so retained

52
pending final determination of the tax liability, and the certificate so obtained shall be his
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.

78. 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.

79. Appearance by authorized representative.---A registered person, required to

appear before the Appellate Tribunal or an officer of the Authority in connection with any
proceedings under this Act, may, in writing, authorize any person, having such
qualification as may be prescribed in the rules, to represent him or appear on his behalf.

80. E-intermediaries.---(1) Subject to such conditions, limitations and restrictions, the

Management Committee may, by a notification in the official Gazette, appoint a person 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, in writing, 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 byhim.

(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 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 under
the relevant provisions of the law.
(6) The Policy Board may, in the prescribed manner, determine the conduct and
transaction of business of e-intermediaries, including their appointment, suspension and
cancellation of appointment, subject to such conditions as prescribed in the regulations.

53
 CHAPTER-XIII
GENERAL ADMINISTRATION

81. Power to make rules and regulations.--- (1) Government may make rules for
carrying out the purpose of this Act.

(2) The Policy Board may, by notification in the official Gazette, make
regulations for carrying out the purposes of any of the provisions of this Act.

(3) The rules and regulations, made under this section or any other provisions of
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 sell to the public at a reasonable price.

82. Power to restrain certain authorities.---The Management Committee may

require that any authority, including a regulatory authority, competent to issue or renew
licenses or permissions for engaging into an economic activity which is a taxable service,
notwithstanding any contained in any other law for the time being in force, shall not issue or
renew such licenses or permissions unless the licensee or the permission-holder submits
the evidence that he is duly registered under this Act.

83. Computerized system.---(1) The Policy Board may prescribe the use of a
computerized system for carrying out the purposes of this Act, 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 Policy Board may specify.

(2) The Management Committee may regulate the conduct and transaction of
business in relation to the submission of returns or other information to the Management
Committee 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) Unless otherwise proved, 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.

84. 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 or

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 (Act No. 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;

54
(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 on the manner prescribed for service of a summons under the Code of Civil
Procedure, 1908 (Act No. V of1908).

(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 or service of a notice, under this Act, 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 in the rules,
that he wishes to electronically receive all or specific communications, including
notifications, orders, assessments and requisitions, from the Management Committee, the
Appellate Tribunal or any officer of the Authority.

(7) The Management Committee may, by notification in the official Gazette,

direct that all or specific communications, including notifications, notices, show cause
notices, orders, assessments and requisitions from the Management Committee, the
Appellate Tribunal or any officer of the Authority to a specific registered person or class of
registered person shall be made electronically.

(8) For the 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 Management Committee, Appellate
Tribunal or officer of the Authority.

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

85. Correction of clerical errors.---(1) Any clerical or arithmetical error in any

assessment, adjudication, order or decision may, at anytime, be corrected by the officer
of the Authority or the Management Committee, as the case may be, 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), an intimation notice
shall be given to the registered person affected by such correction.

86. Issuance of duplicate of the tax documents.---An officer of the Authority, not
below the rank of Assistant Collector, may issue an attested copy of any tax-related
document to the registered person on payment of one hundred rupees.

87. Power to issue orders, instructions and directions.---The Management

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

88. Officers of the Authority to follow orders.---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 Governments, Policy Board and the

55
Management Committee:

Provided that no such orders, instructions or directions shall be given so as to

interfere with the discretion of officers of the Authority in the exercise of their quasi-
judicial functions.

Explanation.---The interpretation of any provision of this Act, rules and regulations shall
not have any binding force, if issued on the administrative side. Such power vests with the
officers of the Authority performing quasi-judicial functions under this Act, the Appellate
Tribunal and the Courts of competent jurisdiction.

56
 CHAPTER-XIV
MISCELLANEOUS

89. 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.

90. 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
Management Committee 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 Management Committee shall not condone a time limitation which
results in increase of any tax payable unless the taxpayer has been given a reasonable
opportunity of being heard.

Explanation.---For the purposes of this sub-section, the term “tax payable” means the
principal amount of the tax other than penalty and default surcharge and in case where only
penalty or default surcharge is involved, the amount of penalty or default surcharge.

(3) The Management Committee may, by notification in the official Gazette,

and subject to such limitations or conditions as may be specified therein, empower any
Collector or an officer of the Authority to exercise the powers under this section in any
case or class of cases:

Provided that where a Collector or any other officer of the Authority has been
empowered to grant condonation under this section, he shall not be competent to grant
condonation in any case falling in the jurisdiction of any officer with designation or rank
higher than the Collector or such officer.

Explanation.--- Condonation of time limit under this section may be granted by the
Management Committee either for the purposes of general application, in respect of any
person or class of persons, with regard to any case or class of cases or to any officer or
official or class of officers or officials of the Authority, performing functions or exercising
powers under any of the provisions of this Act and rules.

91. Bar of suits, prosecution and other legal proceedings.---(1) No suit or other legal
proceedings shall be brought in any Civil Court to set aside or modify any notice issued,
order passed, assessment made, tax levied, penalty or default surcharge imposed collection
of tax made or any action taken for collection or recovery of any tax or arrears of tax under
this Act.

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

(3) Under no circumstances, any of the authorities, having the powers to hear
appeal, under this Act, shall order any cost or fine, on any ground, whatsoever, against the
Management Committee or any of its officers or officials.

(4) Notwithstanding anything in any other law for the time being in force, 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 Management Committee.

92. Removal of difficulties.---If any difficulty arises in giving effect to the provisions of
this Act, the rules or notifications issued thereunder, the Management Committee may
through a general order or otherwise, issue instructions or directions, not inconsistent with
the provisions of this Act, for such actions to be taken by an officer of the Authority or any

57
 other person as it considers necessary or expedient for the purpose of removing the
difficulty.

[92A. Reward to whistleblowers.---(1) The Management Committee, with the approval

of the Finance Department, may sanction reward to whistleblowers in case of reporting
concealment or evasion of tax, tax fraud, corruption or misconduct by officers or officials
of the Authority, providing credible information leading to such detection of evasion of
tax.
(2) The Policy Board, in the manner as may be prescribed, specify the
procedure for processing the reward and also specify the apportionment of
reward sanctioned under this section of whistleblowers.
(3) The claim for reward by the whistleblowers shall be rejected, if,-
(a) the information provided is of no value;
(b) the Management Committee already had the information;
(c) the information was available in public records; or
(d) no collection of taxes is made from the information provided from
which the Management Committee may pay the reward.
Explanation: For the purpose of this section, “whistleblower” means a
person who reports concealment or evasion of sales tax and tax fraud
leading to detection or collection of taxes, fraud, corruption or misconduct
by officers or officials of the Authority, to the competent authority having
power to take action against the person or officers or officials of the
Authority committing fraud, corruption, misconduct, or involved in
concealment or evasion of tax.]23

93. Repeal and savings.---(1) [Section 2 and sections 19 to 116]24 of the Khyber
Pakhtunkhwa Finance Act, 2013 (Khyber Pakhtunkhwa Act No. XXI of 2013), both
inclusive, are hereby repealed, which, hereinafter, referred to as the repealed sections.

(2) Subject to sub-section (3), in making any assessment or determination of

tax in respect of any tax period prior to the enforcement of this Act, the provisions of the
repealed sections, in so far as these relate to the amount of tax payable in such previous tax
period, shall apply as if this Act had not come into force.

(3) The assessment or determination of tax, referred to in sub-section (2), shall

be made by the officer of the Authority, competent under this Act to make an assessment or
determination in respect of a subsequent tax period after the enforcement of this Act, in
accordance with the procedure specified in this Act.
(4) The recovery of any sum, found due as a result of the assessment or
determination under sub-section (2), shall be recovered under the provisions of this Act.

(5) Any proceeding under the repealed sections, pending on the date of
enforcement of this Act, before any authority, the Appellate Tribunal or any Court by way
of appeal, reference, revision or prosecution, shall be continued and disposed of as if this
Act had not come into force.

(6) Any proceeding relating to an assessment or determination of tax in respect

of any tax period, ending prior to the enforcement of this Act, which is initiated after the
enforcement of this Act, shall be initiated and conducted in accordance with the procedure
specified in this Act.

(7) Any tax, payable under the repealed sections, may be recovered under this
Act, but without prejudice to any action already taken for the recovery of the amount under
the repealed sections.

(8) Where Government or the Authority has taken any action or has made any
decision or orders, issued any instruction, direction, clarification or notification in
pursuance of or in exercise of the powers conferred by or under any of the provisions of

23
Inserted through Finance Act, 2024 (assented on: 06th June 2024)
24
Substituted through Finance Act, 2024 (assented on: 06th June 2024) for the words and figures “Sections 19 to 116”.

58
the repealed sections and rules or notifications issued thereunder, such actions, decisions,
orders, instructions, directions, clarifications and notifications shall, unless otherwise
directed by Government or, as the case may be, by the Authority, be deemed to have been
validly issued, so far as they serve the purposes of this Act and the rules or notifications
issued thereunder.

59
 FIRST SCHEDULE
(Classification and Description of Services)
[see sections 2(ad) & (aaa), 3(4) & 17(1)(g)(i)]

Classification(1) Description(2)

9801.0000 Services provided by hotels, restaurants, marriage halls, lawns, clubs

and caterers, suppliers of prepared eatables and drinkables, pandals and
shamianas, messes, hostels and similar undertakings including allied,
auxiliary or ancillary services thereto
9801.1000 Hotels and similar establishments
9801.2000 Restaurants and similar undertakings or businesses
9801.3000 Marriage halls, lawns, pandals and shamianas
9801.4000 Clubs
9801.5000 Caterers and other persons supplying prepared eatables and drinkables
9801.6000 Motels, guest houses, lodges and farm houses
9801.7000 Messes and hostels
9801.8000 Similar other services or service providers
9801.9000 Services allied, auxiliary or ancillary thereto

9802.0000 Advertisements and advertisement services

9802.1000 TV including cable TV networks
9802.2000 Radio
9802.3000 Closed Circuit TV (CCTV)
9802.4000 Newspapers, periodicals, magazinesand similar other publications
9802.5000 Website and internet
9802.6000 Poles or similar structures
9802.7000 Billboards, electronic bill boards, hoarding boards, signboards and
similar other medium of advertisement display
9802.8000 Lease or renting of space whether on constructed or erected structure
or otherwise, for the purposes of advertisements
9802.9000 Other similar services or other advertisement services

9803.0000 Cinematographic production, photographic servicesand broad casting

services
9803.1000 Film making or film production including drama production whether
in serials or otherwise
9803.2000 TV production
9803.3000 Radio production

9803.4000 Broad casting services

9803.5000 Photographic services (services of photography or photographers)

9803.9000 Other similar, allied, ancillary or auxiliary services

60
9804.0000 Services provided as facilities for travel or transportation (including
carriage) of persons
9804.1000 Sea or river (ships, vessels, ferries, trawlers, launches, barrages, boats
or similar power-operated structures)
9804.2000 Air (aircrafts, airplanes, helicopters, airships, air-balloons and other
flying structures, apparatuses or machines)
9804.3000 Railways (train) including tram ways
9804.4000 Road (busses, coaches, coasters, wagons, jeeps, cars, taxies and other
motor or motor-bike-operated four or three wheel vehicles primarily
meant for passengers transport)
9804.5000 Chairlifts or similar directly or indirectly power-operated moving
structures
9804.9000 Other traveling or transportation services

9805.0000 Services provided for carriage or transportation of goods

9805.1000 Sea or river (ships, vessels, oil tankers, ferries, trawlers, launches,
barrages, boats or similar power-operated structures)
9805.2000 Air (airplanes, helicopters, airships, air-balloons and other flying
structures, apparatuses or machines)
9805.3000 Railways (train) including tramways
9805.4000 Road (vehicles whether or not containerized like trucks, trailers,
trawlers, oil tankers, loaders, pick-ups, trollies and other power or
motor bike-operated four or three wheel vehicles primarily meant for
loading and carriage of goods)
9805.5000 Bucket-lifts or similar directly or indirectly power-operated moving
structures
9805.6000 Conduit, pipeline, convey or and similar cargo transmission networks
or arrangements for transportation of goods whether liquid or
otherwise
9805.9000 Other services for carriage or transportation of goods whether liquid
or otherwise

9806.0000 Services provided by persons authorized to transact business on behalf

of others as agent or otherwise
9806.1000 Shipping agents, ship chandlers, stevedores, and ship handling or
management service providers
9806.2000 Freight forwarding agents and cargo forwarding or moving businesses
9806.3000 Customs or customs house agents
9806.4000 Travel agents, tour operators and recruiting agents
9806.5000 Advertising agents and advertisement intermediaries
9806.6000 Share transfer agents and general insurance agents
9806.7000 Sponsorship services
9806.8000 Business management or business support services
9806.9000 Other similar services

9807.0000 Services provided in matters of sale, purchase, rent or hire

9807.1000 Property dealers, property agents and realtors

61
9807.2000 Car and other automobile dealers (whether old or new)
9807.3000 Dealers of electrical or electronic equipments, appliances or other
goods (whether old or new)
9807.4000 Dealers of other second hand goods
9807.9000 Other similar or allied services

9808.0000 Services (including dyeing) provided by laundries (launderers), dry

cleaners or similar other businesses whether independently or
Otherwise
9808.1000 Launderers and dry cleaners operating independently

9808.2000 Launderers and dry cleaners operating in conjunction with other

businesses providing services
9808.3000 Laundering or dry cleaning services by other businesses (including
those performed for industrial purposes)
9808.4000 Dyers of cloth or clothes including industrial dyers (e.g., dyers of
textiles or textile materials)
9808.9000 Other similar or allied services

9809.0000 Courier services including speedy, fast, quick or urgent mail or cargo
services provided either by courier companies or by other businesses
or entities whether as a sole activity or in conjunction or along with
other business activity or activities
9809.1000 Courier services (including parcels) by dedicated businesses
9809.2000 Urgent delivery cargo services as an exclusive business activity
9809.3000 Courier or urgent delivery cargo services performed by other
businesses like passenger transport companies or entities
9809.9000 Other similar, allied or ancillary services

9810.0000 Services provided by persons engaged in contractual execution of

works or furnishing supplies (excluding transactions involving
contractual supply of goods only, without any component of service)
9810.1000 Work contractors other than construction or maintenance work
9810.2000 Maintenance work services whether or not involving furnishing of
supplies (excluding supplies of goods only)
9810.9000 Other similar services

9811.0000 Services, by whatever name called, provided whether independently or

otherwise for personal care, personal beautification and cosmetic uplift
by beauty parlors, beauty clinics, slimming clinics and similar other
businesses operating separately or otherwise
9811.1000 Ladies’ beauty parlors or beauty clinics including ladies’ salons
Whether working independently or as part of other businesses
9811.2000 Cosmetic treatment or cosmetic surgery centers or clinics whether
operating as stand-alone or as part of other businesses
9811.3000 Sliming or other health clinics or clubs providing, interalia, personal
beautification services whether working independently or otherwise

62
9811.4000 Gents’ grooming parlors or salons including barbour shops providing
single or multiple services for personal care or beautification

9811.9000 Other similar services

9812.0000 Packing or packaging services including allied and ancillary services

9812.1000 Packing or packaging of industrial goods or products for industrial or

commercial purposes
9812.2000 Packing or packaging of old or used office or household goods
9812.9000 Other similar, allied or ancillary services

9813.0000 Telecommunication and similar, allied or ancillary services

9813.1000 Telephone services (including fixed line, wireless, cellular, wireless
local loop, video, pre-paid, post-paid, pay phone cards and voice mail
etc.)
9813.1010 Messaging services (including Short Message Service (SMS),
Multimedia Message Service (MMS) and messaging through other
digital applications etc.)
9813.1020 Installation, provision, shifting, changing, conversion and restoration
of telephone connections (including conversion of NWD connection
to non NWD or vice versa) and similar other services
9813.2000 Band width services (including copper-line/fiber-optic/co-axial
cable/microwave/satellite-based, IP services, teleconferencing,
3G/4G/5G/LTE or similar other services)
9813.3000 Telegraph and other services relating there to
9813.4000 Tele fax including store and forward fax and similar other services
9813.4010 Internet services including e-mail, dial-up and other allied services
9813.4020 Broad band services for DSL connection (including copper-line/ fiber-
optic/co-axial cable/wireless/satellite-based, internet/e-mail/
data/SMS/MMS services on WLL or cellular mobile networks) and
similar other services
9813.4030 Data communication network services (DCNS including copper-
line/co-axial, cable/fiber-optic/wireless/radio/satellite-based, services
relating to value-added data, virtual private network (VPN) and digital
signature) and similar other services
9813.5000 Long distance international (LDI) services
9813.6000 Local loop or other similar services
9813.7000 Audio text services (including tele-text, trunk radio, paging or similar
other services)
9813.8000 Voice paging services (including radio paging, vehicle or other object
(whether or otherwise) tracking and burglar alarm etc.) and other
similar services
9813.9000 Other similar, allied or ancillary services

9814.0000 Services provided by banks or banking companies, insurance

companies, cooperatives and foreign exchange companies or dealers
(including similar institutions or entities)

63
9814.1000 Banks or banking companies, cooperatives or similar institutions or
entities (their all services including bank guarantee, brokerage, letter
of credit, pay order or demand draft, bill of exchange, transfer of
money in any manner, bill discounting, lockers and safe vaults,
credit/debit cards, foreign exchange dealings, ATMs, issue-banking,
provision of loans, business or investment financing or advances,
leasing or releasing whether financial, equipment/commodity-related,
musharakah financing etc.)

9814.2000 Insurance companies (their all services including goods, fire, theft,
marine, travel, life, health, industrial, business-related, moveable or
immoveable property insurance and other insurance and reinsurance
services)
9814.3000 Services of cooperatives and cooperative societies (including producer
cooperatives, worker cooperatives, consumer cooperative, credit
unions, retail or purchasing cooperatives, social cooperatives,
industrial service cooperatives, manufacturing cooperatives,
marketing cooperatives, cooperative farming societies, housing
cooperatives and credit cooperatives etc.)

9814.4000 Service of foreign exchange companies, dealers and money changers

or similar businesses
9814.9000 Other similar banking, insurance, cooperative or money exchange
services

9815.0000 Services provided by architects, civil engineers, construction

consultants, construction contractors, town or real estate or property
promoters, developers or planners including interior decorators or
allied or ancillary professions
9815.1000 Architects and civil engineers or town promoters, developers or
planners
9815.2000 Town, real estate or property promoters, developers or planners
9815.3000 Construction contractors including contractors of allied work such as
electrical or gas fittings, plumbing, water boring, wood work,
plastering, flooring, steel work, paint and other finishing work
9815.4000 Landscape or land development designers including land surveyors
9815.9000 Other similar, allied or ancillary services

9816.0000 Services provided by practitioners, professionals, consultants and

advisers (by whatever name called) in their respective fields or
disciplines
9816.1000 Medical, dental or allied health fields or disciplines including para-
medics and specialized technicians
9816.2000 Veterinary and allied sciences including pet care
9816.3000 Law and allied fields or disciplines
9816.4000 Financial, accountancy, cost accountancy, tax management or tax
affairs and similar other fields or disciplines
9816.5000 Human resource management or development
9816.6000 Business planning, business management, business reforms, business
communication including hospitality administration and similar other
fields or disciplines
9816.9000 Other similar services

64
9817.0000 Services provided by laboratories engaged in lab work like
examination, analysis, testing, verification, experimentation,
innovation and product development etc., in relevant domain so
knowledge
9817.1000 Scientific including medical, health or health care labs
9817.2000 Mechanical including engineering labs
9817.3000 Chemical including materials or goods testing labs
9817.4000 Electrical or electronic labs
9817.5000 Forensic labs
9817.6000 Petro-chemical labs
9817.9000 Other similar labs

9818.0000 Services provided by specialized agencies

9818.1000 Security agencies including security alarm services
9818.2000 Credit rating or similar evaluation agencies
9818.3000 Market research or market survey agencies
9818.4000 Private detective or intelligence service providing agencies
9818.5000 Project including business project planning or preparation agencies
9818.9000 Other similar agencies

9819.0000 Services provided by specified persons or businesses

9819.1000 Stock brokers, future brokers and commodity brokers
9819.1100 Underwriters
9819.1200 Indenters and similar other commission agents
9819.1400 Packers and movers not falling under classification heading9812.0000
9819.1500 Distribution agents
9819.2000 Money exchangers not falling under classification heading 9814.0000
9819.3000 Rent-a-car and automobile rental services
9819.4000 Survey or other than those falling under classification headin
9815.0000 g
9819.5000 Designers other than those falling under classification headi
9815.0000 ng
9819.6000 Outdoor photographers and video graphers including studios services
other than those falling under classification heading 9803.0000
9819.7000 Video tape, sound record, program producers and production services
other than those falling under classification heading 9803.0000
9819.8000 Art painters including services provided by art galleries (excluding sale
of their own pre-made—not made to order—art products
9819.9000 Cable TV operators including private radio channel operators
9819.9100 Auctioneers other than those who pay tax as customs agent
9819.9200 Public relations services other than those who pay tax as practitioner,
professional, consultant or advisor of business communication
9819.9300 Technical testing and analysis services other than those classifiable
under heading 9817.0000

65
9819.9400 Service provided by a registrar to an issue
9819.9500 Services relating to processing for registration or protection of copy
rights or other IPRs
9819.9900 Other similar services

9820.0000 Services provided by specialized workshops or under takings

9820.1000 Auto-workshops whether or not providing other allied or extended
services
9820.2000 Workshops for industrial, construction, earth moving or other similar,
heavy duty or special purpose machinery
9820.3000 Workshops for electric or electronic equipments or appliances
including computer hardware
9820.4000 Car washing or similar service stations
9820.9000 Other similar workshops or businesses

9821.0000 Services provided in specified fields not clubbed with other

(taxable) services classified elsewhere in this Schedule
9821.1000 Health care centers, health clubs, gyms or physical fitness centers
9821.2000 Indoor sports and games centers
9821.3000 Baby care centers
9821.4000 Body massage centers
9821.5000 Pedicure centers
9821.9000 Other similar services

9822.0000 Services provided for specified purposes

9822.1000 Fumigation or decontamination of commercial, industrial or
residential buildings, warehouses, godowns, storage houses or storage
places, parks, gardens and other buildings or places including business
places
9822.2000 Maintenance or cleaning services in respect of buildings or other
places whether or not wholly or partly constructed including places
having only civil infrastructure
9822.3000 Janitorial services
9822.4000 Dredging or de-silting services
9822.5000 Salvage or similar other recovery services
9822.9000 Other similar services

9823.0000 Franchise services either on giving or on receiving ends including

royalties or similar financial benefits arising out of intellectual
property rights or other factors of business good will

9824.0000 Brokerage (whether traditional, discount. commodity or other

category) services (other than stock or securities brokers)

9825.0000 Exhibition, convention or carnival services including renting of

purpose-specific property or space for such events

66
9826.0000 Services of computer software engineers including provisioning of
information, data feeding, data processing, data cleaning, data
storage, data transfer or data management etc.
9827.0000 Services relating to handling, storage or ware housing of goods
whether or not movement or transport of such goods is
undertaken or conducted by the same service provider

9828.0000 Services of fashion designers not engaged in designing,

manufacturing and selling their own products or goods through
their regular paid employees

9829.0000 Services of internet café including businesses providing facilities

for playing computer games as separate activity of in conjunction
or along with such café services

9830.0000 Airport services (including passenger facilitation, car parking,

cargo handling, aviation support services, flight kitchen supplies,
Renting of special purpose machinery, equipment, vehicles, porter
age, quarantine and other fumigation or vaccination, janitorial
services, jet or other fuel supply services etc.)

9831.0000 Forward contract services whether for property, commodity or

other purposes

9832.0000 Coaching, training, vocational or tuition centers (whether or not

called academies)

9833.0000 Tracking services

9834.0000 Quality control services (ISO certification authority)

9835.0000 Debt collection agencies

9836.0000 Amusement parks services

9837.0000 Call centers

9838.0000 Film and drama studios including mobile stage shows or cinemas

9839.0000 Entertainment services including services provided for planning,

arranging or managing sports activities, games or matches etc.

9840.0000 Services provided in respect of manufacturing or processing on

toll or charges basis(out of main or major inputs owned by

67
9841.0000 Container terminal, container handling or container storage
services regardless whether the containers are empty or stuffed
with cargo
9842.0000 Man power recruitment including recruitment for overseas jobs and
labour supply services regardless the labour charges are given by
these vice provider or the service recipient

9843. 0000 Dry port services including operation of a dry port and other
provided a torin respect of dry port such as inward/out ward
transportation/movement of goods, cargo handling, cargo storage or
warehousing, loading/unloading of cargo, booking or discharge of
cargo etc.

9844.0000 Public bonded ware house services

9845.0000 Services provided in respect of exploration or mining of minerals, oil

and gas including surveys and other activities related or allied
thereto

9846.0000 Event management services whether covering all or any of the

processes like planning, budgeting, scheduling, site selection,
acquiring necessary permits, coordinating transportation and
parking, arranging for speakers or entertainers, arranging decor,
event security, catering or any other allied or connected task

9847.0000 Electric power and gas transmission (including wheeling) or

distribution services

9848.0000 Valuation or assessment services including competency and

eligibility testing services

9849.0000 Transportation, carriage, haulage or transmission of cargo whether

dry, liquid or otherwise

9850.0000 Digital or IT-based services in whatever form or manner or under

whatever arrangement including but not limited to web design and
development, mobile app development, server management, page-
speed optimization, UX/UI optimization, PPC marketing, blogging,
Google Ad Words, Face book advertising, Insta-gram advertising,
custom software development, assessment and road map
development, software maintenance and support services, supply of
any other software or soft ware product or products through any
medium and online digital marking services such as search engine
optimization (SEO), so cal media marketing, content marketing,
affiliate marketing, influencer marketing, email marketing, viral
marketing services etc.

9851.0000 Ride-hailing or ride-hail services like Uber, Cream, Biker and Lifted.
Regard less of the mode, manner or dynamics of the business system
involved in such services.

68
 9852.0000 Online Market Place (OMP) including online platform or portal
services by whatever name called.

9853.0000 Services relating to or in respect of the installation, erection,

commissioning or other permanent structure-affixed/ linked/ tied
placement (whether full or in part) of any industrial, mechanical or
electrical plant, machinery or equipment (excluding installation of
domestic equipment etc. for residential use)

9854.0000 Services relating to or involving collection, provision, organization,

digitization, processing, analysis, safety, preservation, sharing,
verification, validation, decontamination or any other treatment of
data including granting access to data for the purposes of information-
gathering, information-verification, information- authentication or
similar other purposes.

9855.0000 Visa processing or visa acquisition services including advisory or

consultancy services for foreign education or migration provided by
persons in their private business or professional capacity.

[9856.0000 Education services including technical and vocational education services

provided by private sector.
9856.1000 Pre-primary education services.
9856.2000 Primary education services.
9856.3000 Lower secondary education services.
9856.4000 Secondary education services.
9856.5000 Upper secondary education services.
9856.6000 Post-secondary non-tertiary education services.
9856.7000 First stage tertiary education services.
9856.8000 Second stage tertiary education services.
9856.9000 Other education and training services and educational support services.
9857.000 Management Services, including fund and asset management services.] 25

25
Added through Finance Act, 2024 (assented on: 06th June 2024)

69
 SECOND SCHEDULE
(Taxable Services)
[see sections 3 (1) & (4), 9 (1), 12, 17 (1)(j) & (k) & 18 (1)]

S# Description of Services Headings Rate of

Tax

1. Services provided or rendered by hotels, motels, guest 9801.0000 [Thirteen percent

houses, resorts, accommodation – and/or – food service 9801.1000 (13%) with the
providing farm-houses, motorway–or–highway-side 9801.2000 facility of input
accommodation – and/or – food provisioning/food 9801.3000 tax adjustment as
servicing or food supply facilities, restaurants (including 9801.4000 allowed under
food service supply chains), ice cream parlors, marriage 9801.5000 this Act, rules
or wedding halls, marques, lawns, clubs and caterers, 9801.6000 and
suppliers of prepared eatables and drinkables, pandals and 9801.7000 regulations]27
shamianas, clubs including such clubs as, though run on 9801.8000
mutuality basis, are operated in commercial mode, 9801.9000
manner or style, messes, hostels and similar entities,
enterprises or undertakings including all such services,
facilities, utilities, entertainments, comforts, enjoyments
or amusements etc., as are allied, auxiliary or ancillary
thereto.

Exemptions and Reduced Tax Rates:

(i) Full exemption shall be available to the services of
hostels exclusively meant for providing
accommodation and allied facilities to students.

(ii) The rate of tax in case of services (whole range of

services including accommodation, food supplies
and laundry etc.) provided or rendered by all other
categories of hostels shall be Five Percent (5%)
without any input tax adjustment.

(iii) [Services provided or rendered by local non-

corporate stand-alone hotels or chains of such hotels
(including guest houses, clubs and lodges etc.) and
restaurants shall be charged to tax at the rate of six
percent (06%) without input tax adjustment;
provided that the Restaurant Invoice Management
System (RIMS) shall compulsorily be installed and
working properly on regular basis on all restaurants
registered with the Authority:
Provided that in case of traditional type restaurants
usually called as dhaba or conventional hut-type or
similar other road/street side non-air-conditioned
restaurants usually serving limited range of pre-
cooked or pre-prepared food items with informal
seating environment (located or operating anywhere
in the the Province), the tax shall be charged and paid
at the rate of two percent (02%).]26

26
Substituted through Finance Act, 2024 (assented on: 06th June 2024) for the following: “(iii)Services provided or rendered
by local non-corporate stand-alone hotels or chains of such hotels (including guest houses, clubs and lodges etc.) and
restaurants shall be charged to tax at the rate of Eight Percent (8%) without input tax adjustment; provided that where in any
case of such restaurant, the Restaurant Invoice Management System (RIMS) is installed and working properly on regular basis,
the rate of tax shall be further reduced to Five Percent (5%) without any input tax adjustment:
Provided that in case of traditional type restaurants usually called as dhaba or conventional hut-type or similar other road/street
side non-air-conditioned restaurants usually serving limited range of pre-cooked or pre-prepared food items with informal
seating environment (located or operating anywhere in the tariff areas of the Province) the tax shall be charged and paid at the
rate of One Percent (1%).”
27
Substituted through Finance Act, 2024 (assented on: 06th June 2024) for the words, brackets, figure and expression “Fifteen
Percent (15%)”.
70
 (iv) In case of traditional accommodation facilities like

sarrayae or inns or open air over night bed

provisioning services generally located or available
around or in the vicinity of railway stations, bus or
wagon stands (stations), the rate of tax shall be [two
percent (02%)]28. without any input tax adjustment if
the charges for overnight stay do not exceed rupees
three hundred per bed.

(v) In case of marriage or wedding halls including

pandals and shamiana and similar other businesses
including food services provided therein, the rate of
tax shall be [eleven percent (11%)]29 without any input
tax adjustment.

[(v-a) Tax shall be charged on fixed rate basis in respect

of wedding/ marriage/ shadi halls as per the following
categories:

CATEGORY-A: Where the wedding hall is having a

28
Substituted through Finance Act, 2024 (assented on: 06th June 2024) for the words, brackets, figure and expression “One
Percent (01%)”.
29
Substituted through Finance Act, 2024 (assented on: 06th June 2024) for the words, brackets, figure and expression “Eight
Percent (08%)”.
71
 capacity of 500 or above persons and located in posh
area of a major city, its rate of fixed tax shall be rupees
25,000 per function.

CATEGORY-B: Where the wedding hall is having a

capacity of more than 300 but less than 500 persons and
located in municipality, its rate of fixed tax shall be rupees
15,000 per function.

CATEGORY-C: Where the wedding hall is having a

capacity of less than 300 persons and located in suburb or
roadside outside main city, its rate of fixed tax shall be
rupees 10,000 per function.

Note: The registered person may opt one of the tax

regimes, as specified at under clauses (v) and (v-a) above.
The existing registered person shall be bound to give his
option till 25th June, 2024; provided that the person, liable
to be registered in future, shall give such option at the time
of registration with the Authority.] 30
(vi) In case of caterers whether stand-alone or otherwise,
the rate of tax shall be Ten Percent (10%) without
any input tax adjustment.

(vii) In case of non-corporate sector hospitality

businesses, including hotels, guest houses, rest
houses, lodges, restaurants and similar other
accommodations and food serving businesses,
located in the tourist spots of Galiyat and Kaghan
Valleys, the tax shall be charged and paid at the rate
of Five Percent (5%), without any input tax
adjustment, subject to the compliance to all such
conditions and procedures, as may be prescribed by
the Authority, in this behalf.

Explanation: It is clarified for the removal of any doubt

that the services of this entry include “takeaway” or
“home or door-step delivery” transactions of the
restaurants or other categories or types of food serving
outlets either as a part of their overall services or as an
exclusive activity.
[1A Services provided by Health Care Centers etc. in Private 9821.1000 Five percent (05%)
Sector. (without input tax
adjustment) of the
charges (including
fixed charges, if
any) of such
centers or hospital
beds/ rooms:
Provided that the
said charges
exceed rupees
10,000/- per day
per bed/room.]31

30
Inserted through Finance Act, 2024 (assented on: 06th June 2024).
31
Inserted through Finance Act, 2024 (assented on: 06th June 2024).
72
2. Services provided or rendered by beauty parlors, beauty 9811.0000 Five Percent
clinics, health care centers, cosmetic or plastic surgery 9811.1000 (5%) without
centers/clinics, hair transplant centers or clinics, health 9811.2000 any input tax
clubs, gyms (including yoga centers with or without 9811.3000 adjustment
yoga teaching classes system or arrangements), physical 9811.4000
fitness centers, massage centers, pedicure/ manicure 9811.9000
centers, swimming pools and similar other 9821.1000
establishments, undertakings, enterprises or entities etc. 9821.4000
9821.5000
Exemption: Full exemption on:
(i) cosmetic treatment of burns or burned body parts; and

(ii) conventional or traditional barber shops provided

they do not render any high end beautician or
cosmetic services.
3. Services provided or rendered by stand-alone or other 9808.0000 Fifteen Percent
launderer sand dry cleaners including carpenters of a set 9808.1000 (15%)
or similar furniture items cleaners or washers. 9808.2000
9808.3000
Exemption: Full exemption to small size traditional 9808.4000
style stand-alone launderers and dry cleaners operating 9808.9000
without any branded or registered business name and
without the involvement or use of any electrical or
mechanical apparatus, equipment or machinery for
washing or cleaning purposes.

Reduced Rate of Tax: Services provided or rendered by

medium sized stand-alone or other launderers and dry
cleaners including carpet or sofa set or similar furniture
items cleaners or washers shall be chargeable to tax at
the rate of Two Percent (2%) without any input tax
adjustment.

Explanation: No benefit of exemption or reduced rate

of tax shall be available or admissible to the laundries
and dry-cleaning or other similar businesses operating
under chain-business-system with or without any
business brand name or operating as a part of businesses
providing hotel or other accommodation services and in
all such cases, the rate of tax shall be Fifteen Percent
(15%).

73
4. Telecommunication and similar, allied or ancillary 9813.0000 Nineteen and a
services including: 9813.1000 half Percent
9813.1010 (19.5%)
a) Telephone services (including fixed line, wireless, 9813.1020
cellular, wireless local loop, video, pre-paid, post- 9813.2000
paid, pay phone cards and voicemail etc.); 9813.3000
9813.4000
b) Messaging services (including short message service 9813.4010
(SMS), multi media message service (MMS) and 9813.4020
messaging through other digital applications etc.); 9813.4030
9813.5000
c) Installation, provision, shifting, changing, 9813.6000
conversion and restoration of telephone connections 9813.7000
(including conversion of NWD connection to non 9813.8000
NWD or vice versa) and similar other services; 9813.9000

d) Bandwidth services (including copper-line/fiber-

optic/co-axial cable/microwave/satellite-based, IP
services, teleconferencing, 3G/4G/5G/LTE or
similar other services;

e) Telegraph and other services relating thereto;

f) Tele fax including store and forward fax and similar

other services; Internet services including e-mail,
dial-up and other allied services;

g) Broad band services for DSL connection (including

copper-line/fiber-optic/co-axial cable/ wireless/
satellite-based, internet/e-mail/ data/SMS/MMS
services on WLL or cellular mobile networks) and
similar other services;

h) Data communication network services (DCNS

including copper-line/co-axial cable/fiber-optic/
wireless/radio/satellite-based, services relating to
value added data, virtual private network (VPN) and
digital signature) and similar other services;

i) Long distance international (LDI) services;

j) Local loop or other similar services; Audio text

services (including tele-text, trunk radio, paging or
similar other services);

k) Voice paging services (including radio paging,

vehicle or other object (whether or otherwise)
tracking and burglar alarm etc.) and other similar
services;

l) Rental either full, partial or on sharing basis of space,

place or any other facility or arrangement on towers
or other structures or installations for any purposes;

d) Internet-based cable TV services whether as a single

service or otherwise; and

e) All other similar, allied, ancillary or auxiliary

services.

Explanation: In case of incoming international calls,

charges received by telecom service providers abroad
shall be taxed on tax fraction formula basis only to the
74
extent to which such charges are shared or received by
such domestic service providers treating the charges so
shared or received as tax-inclusive.

75
 5. Services provided or rendered by persons authorized to 9806.0000 Fifteen Percent
transact or deal with business in any manner on behalf 9806.1000 (15%)
of others such as customs agents, shipping agents 9806.2000
(including import/export cargo freight forwarders), stock 9806.3000
brokers, share transfer agents, business support or 9806.4000
business or asset management agents, tour operators, 9806.6000
travel agents, recruiting/recruitment agents, labour or 9806.7000
man power supply services, insurance agents, 9806.8000
commission agents, distribution agents and similar other 9806.9000
persons engaged in business transaction work or activity 9819.1000
against commission or similar charges. 9819.1500
9842.0000
Explanation:
(i) The persons falling in this category do not generally
have any investment or investment-related interest
in the business though they may have their own
infrastructure or other resources to carry out such
work or activity.

(ii) The persons covered in this category shall pay tax to

the Authority in all such cases where their clients,
customers or buyers are located in the province of
Khyber Pakhtunkhwa regardless of the location of
such person’s business or office elsewhere and
regard less whether or not documentation or other
related formalities of their transactions with such
clients, customers or buyers is done or are carried out
in the said Province or elsewhere.
Exemption: Full exemption in case of performance of
Hajj and Umrah.

Reduced Rate of Tax: Except the services falling under

the categories of labour or manpower supplies including
recruitments for overseas jobs or employment and such
services of this entry, as are provided by corporate sector
entities, all other services of this entry shall be charged
at the rate of Eight Percent (8%), without any input tax
adjustment; provided that business support services
other than those provided by corporate entities shall be
charged to tax at the rate Five Percent (5%).

[Fixed Rate of Tax: The Customs Agent shall pay tax at the fixed
rate of rupees 3,000/- per goods declaration.]32
6. Advertisements on TV including cable TV networks, 9802.0000 Ten Percent
radio, CCTV, newspapers, periodicals, magazines and 9802.1000 (10%) without
similar other publications, websites and internet, poles 9802.2000 any input tax
or similar structures, bill boards, electronic bill boards, 9802.3000 adjustment
hoarding boards, signboards and similar other medium 9802.4000
of advertisement display, lease or renting of space 9802.5000
whether on constructed or erected structure or otherwise 9802.6000
for the purposes of displaying advertisements in any 9802.7000
manner and other advertisement services including 9802.8000
services provided or rendered by advertising agents. 9802.9000
Explanation: 9806.5000
(i) In case of renting or leasing of space for
advertisements’ purposes by Government or public
sector or para-public sector development, housing or
other authorities, departments or institutions, the
whole amount of tax due shall be with held or
deducted and paid directly to the Authority by such
authorities, departments or institutions.

32
Added through Finance Act, 2024 (assented on: 06th June 2024).
76
 (ii) In case of advertisements relayed, telecasted or print-
media-circulated in more than one Provincial
jurisdictions, tax shall be paid to the Authority on
apportionment basis keeping in view the population
ratio of the province of Khyber Pakhtunkhwa in the
aggregate population of all such jurisdictions.

Exemption: Full exemption on such advertisements

carrying or conveying public service messages as are
funded by the Government or financed under foreign
grants-in-aid agreements signed with the Government.

Reduced Rate of Tax: In case of advertisements on or

through print media of all types and forms, tax shall be
charged at the rate of [ Two Percent (02%)]33 without
any input tax adjustment.
7. Courier services including speedy, fast, quick or urgent 9809.0000 Fifteen Percent
mail, parcel or cargo services provided either by courier 9809.1000 (15%)
companies or by other businesses, undertakings or 9809.2000
entities whether as a sole activity or in conjunction or 9809.3000
alongwith other business activity or activities 9809.9000
including:
a) Courier services (including parcels) by dedicated
businesses;
b) Urgent delivery cargo or parcel services as an
exclusive business activity;
c) Courier or urgent delivery cargo or parcel services
performed by other businesses or entities like air
lines, railways, postal service entities, road passenger
transport companies or entities; and
d) Other similar, allied or ancillary or ancillary
services.
8. Services provided or rendered in matters of sale, 9807.0000 Fifteen Percent
purchase, rent or hire (other than rent-a-car) under any 9807.1000 (15%)
kind or type of arrangements with the client or the 9807.2000
principal: 9807.3000
9807.3000
(a) Property dealers, property agents and realtors. 9807.9000

(b) Car and other automobile dealers (whether old or

new).

(c) Dealers of electrical or electronic equipments,

appliances or other similar goods (whether old
or new). Dealers of plant and machinery
including construction machinery and similar
capital goods.

(d) Dealers of other second hand goods.

(e) Renting services in respect of plant,

machinery including construction machinery
and other equipments etc.
Reduced Rate of Tax: All services covered in this entry
except services (whole range) rendered or provided by
corporate sector dealers and authorized automobile (all
categories of automobiles) dealers shall be chargeable to
tax at the rate of Two Percent (2%) without any input tax
adjustment

33
Substituted through Finance Act, 2024 (assented on: 06th June 2024) for the words, brackets, figure and expression “One
Percent (01%)”.
77
9. Services provided by specialized workshops or under 9820.0000 (i) Five Percent
takings: 9820.1000 (5%) without any
9820.2000 input tax
9820.3000 adjustment in
a) Auto-workshops whether or not providing other 9820.4000
case of industrial
allied or extended services. 9820.9000
workshops;
(ii) Two Percent
b) Workshops for industrial, construction, earth- (2%) without any
moving or other similar heavy duty or special Input tax
adjustment in
purpose machinery. case of all other
Categories or
c) Workshops for heavy or light duty electric, electrical types of
or electr o n ic machinery ( such as tr a n s f o r m er s , workshops;
generators, turbines, motors, pumps, rotators, power (iii)One Percent
accumulators, transmission networks or systems etc.) (1%) without any
equipments o r a p p l i a n c e s e t c . , including computer input tax
adjustment in
hardware and allied equipments or appliances case o f stand-
etc. alone car wash
(car wash station)
d) Services provided in respect of their pair or services; and
(iv)Ten Percent
maintenance of aircrafts, helicopters and other flying (10%) without any
objects. Input tax
adjustment in
e) Car washing (including compounding and polishing case of
etc.) or similar service stations. authorized
automobile
f) Other workshops or workshop-type businesses. dealers’
workshops
(whole range of
their workshop
services
including
Car wash etc.)
10. Franchise services either on giving or on receiving ends 9823.0000 Fifteen Percent
including royalties or similar financial benefits arising 9819.9500 (15%)
out of intellectual property rights or other factors of
business good will, market standing, popularity, image
or reputation etc.

Exemption: Full exemption on or in respect of

franchises relating to the services in the fields of health
and education.
11. Services provided or rendered by specialized agencies: 9818.0000 Ten Percent
a) Security agencies including their activities relating 9818.1000 (10%) without
but not limited to providing cash or precious articles’ 9818.2000 any input tax
transportation or movement security, tracking 9818.3000 adjustment
services and security alarm services. 9818.4000
9818.5000
b) Credit rating or similar evaluation or revaluation 9818.9000
agencies.

c) Project including business project planning or

preparation agencies.

d) Market research or market survey agencies.

e) Private detective or intelligence service providing

agencies.
f) Other similar agencies.

78
 12. Services provided or rendered in respect of 9840.0000 Five Percent
manufacturing or processing on toll or charges basis (5%) without
(out of main or major inputs owned by others). any input tax
adjustment
Explanation:
(i) The terms, expressions or concepts “industrial
vending, contractor third party manufacturing,
contract production, contract processing, contract
milling, contract machining, contract conversion,
contract processing, contract printing” for any
industrial or allied purposes are covered in and liable
to tax under this entry.

(ii) The expression “processing” includes processes

involving specialized working (whether initial,
intermediary or finishing), washing, cleaning,
coloring (dyeing), printing, packing or pack ageing
etc., for industrial or allied purposes.

(iii) The exclusive services of printing or publication of

written materials or products performed on contract
basis by businesses like printing presses or printing/
publication houses shall also be covered in and taxed
under this entry.

Exemption: Full exemption on text books printed on

contract printing basis meant for free distribution to the
students by or through the Government.
13. Services provided by persons engaged in contractual 9810.0000 [Fifteen
execution or performance of works (including but not 9810.1000 Percent
limited to, repair, maintenance, and renovation, up- 9810.2000 (15%)]34
gradation, cleaning, fumigation and decontamination 9810.9000 without any
services or janitorial works) or furnishing supplies 9822.1000 input tax
(excluding transactions involving contractual supply of 9822.2000 adjustment
goods only, without any component of service relating 9822.3000
to such goods).

14. Services provided by construction contractors, 9815.0000 Five Percent

architects, civil engineers, land or property surveyors, 9815.1000 (5%) except
construction consultants, designing and supervision 9815.2000 Government
consultants, town or real estate or property promoters, 9815.3000 funded
developers or planners including interior decorators or 9815.4000 construction
allied or ancillary professions: 9815.9000 projects
9819.5000 including
(f) Construction services rendered or provided in
respect of the construction of structures, buildings, ADP/PSDP
roads, bridges, under passes or flyovers (and other civil funded projects
works), electro-mechanical works, turn-key and and
Engineering, Procurement and Construction construction of
(EPC)projects and similar other works involving hydropower
construction activity. projects on
which the rate
(g) Architects and civil engineers or town promoters, of tax shall be
developers, planners. Two Percent
(2%).

34
Substituted through Finance Act, 2024 (assented on: 06th June 2024) for the words, brackets, figure and expression “Five
Percent (05%)”.
79
 (h) Town, real estate or property promoters, developers
or planners.

(i) Services of contractors of allied works such as

electrical, mechanical, gas fittings, plumbing, water
boring, wood work, plastering, flooring, steel work,
paint and other finishing work or works.

(j) Interior decorators.

(k) Landscaping or land development designers

including land surveyors.

(l) Other similar, allied or ancillary services.

Exemption: Full exemption on:
(i) The construction work in respect of development of
industrial estates/zones, consular buildings and
construction works under international tenders based
on and funded from foreign grants-in-aid agreements
or arrangements.

(ii) Residential construction and allied works in respect

of the Prime Minister’s Naya Pakistan Housing
Scheme.

(iii) The projects initiated or under taken under

Government’s Annual Development Programme
(ADP) provided either such projects have been
initiated or complete donor before 30thJune, 2021 or
payments, whether full or in part, in respect thereof
have been made on or before the said date (the
ongoing projects in respect of which agreements or
contracts were signed before the said date, shall been
titled to this exemption regardless of the schedule of
payments relating thereto).

(iv) To the extent of such portion or portions of the

construction work of the projects of Public Sector
Development Programme (PSDP), as were
undertaken and completed before 30thJune, 2021,
regardless of the dates of their approval or initiation;
provided that no such exemption shall be claimed or
available on such portion or portions of the work of
such project or projects as has/have not been
completed before 30th June, 2021.

(v) Construction services, including allied works,

provided or rendered in respect of low-cost housing
projects and schemes of the Provincial Housing
Authority of Khyber Pakhtunkhwa.

Condition: The exemption allowed under this part shall

not be construed or interpreted in any manner to claim
or take any refund, waiver, dispensation or relief of tax
already deposited, paid or recovered (including already
withheld or deducted but not deposited or paid) on or
before 30th June, 2021 on any ground whatsoever.

Explanation: For the purpose of this item, the

expression “initiated” shall, under no circumstances, be
construed to commence prior to the date of actual
signing of the agreements for Government sector
construction projects.

80
 Specific Rate of Tax:
(i) In case of land development, tax shall be charge at
the rate of one hundred rupees (Rs.100only) per
square yard of the total (aggregate or gross)
developed land without any segregation,
fragmentation, segmentation, splitting or slicing with
reference to the factual or intended use whether
immediate or subsequent and no input tax
adjustment shall be admissible in this regard.
(ii) In case of commercial construction of residential
buildings, flats or apartments, commercial plazas,
malls, towers or complexes etc., the rate of tax shall
be fifty rupees (Rs.50 only) per square foot of the
covered area without any input tax adjustment.

Clarification: For the purpose of removal of any doubt,

it is clarified that for the purpose of this serial number:

(iii)construction services shall also cover all such

construction and allied services as are financed and
funded either under Annual Development Program
(ADP) or under Public Sector Development Program
(PSDP); and

(iv) self-construction of residential houses for personal use

shall not be liable to tax.
(v) Construction services shall include construction
works of power (including hydropower) generation
projects.

(vi) Where fixed rates of rupee one hundred per square

yard, or as the case may be, rupees fifty per square
foot are applicable in case of land development and
commercial construction as per description specified
above, tax shall not be charged in respect of the areas
allocated, fixed or used exclusively for schools,
medical dispensaries, mosques, graveyards, parks,
public toilets, corridors (inside passages of buildings)
and stairs provided that these facilities are meant for
common use of the public at large without the
involvement of any commercial aspect including

(vii) intention or purpose for sale, leasing or renting.

81
15. Digital or IT-based services in whatever form or 9850.0000 Two Percent
manner or under whatever arrangement, including but (2%) without
not limited to: any input tax
adjustment
a) Web design and development;

b) Mobile app development;

c) Server management;

d) page-speed optimization, UX/UI optimization;

e) PPC marketing, blogging;

f) Google Ad Words, Face book advertising, Instagram

advertising;

g) Custom software development, assessment and road

map development, software maintenance and
support services, supply or sale of any other software
or software product or products through any
medium;

h) Online digital marking services such as search

engine optimization (SEO);
i) social media marketing, content marketing, affiliate
marketing, influencer marketing, email marketing,
viral marketing services, etc.

Explanation: This entry does not cover such persons

who are engaged in providing or rendering services
relating to software or IT-based system development or
management or similar other such fields in the ir-
individual capacity and are eligible to pay tax at reduced
rate under item (g) of entry No. 19.
16. Services relating to works or projects in respect of 9845.0000 Fifteen Percent
exploration and production (E&P) or mining of (15%)
minerals, oil and gas including licensing, renting or re-
renting, leasing or re-leasing, surveys, geo-map
development, equipment mobility, product evaluation,
product marketing and other services or activities
related or allied thereto.

Explanation: In case of oil, gas and mining sector or

industry, tax shall be charged on both the fee (by
whatever name called) paid for the purposes of lease or
license including renewal thereof and on the royalty:

Provided that where such fee or royalty is received by a

government department or authority, the tax shall be
paid on receipt basis directly by such department or
authority.

Reduced Rate of Tax: The rate of tax on the leases

(including re-leasing by the lessees) and licenses
(including sub-contracting or license usage permissions
by license holder) granted or fees and royalties, received
by Government Departments, or as the case may be, by
the lessees or licensees, shall be Two Percent (2%)
without any input tax adjustment; provided that no tax
shall be demanded in case of the charges for such leases,
licenses, fees or royalties etc, received up to 30th June,
2021, if tax thereon has not been already withheld, paid
82
 or recovered (no refund or waiver of any such tax
amount shall be admissible under any circumstances).

17. Airport services (including passenger facilitation, car 9830.0000 Ten Percent
parking, cargo handling, cargo warehousing or storage, (10%) without
aviation support services, flight kitchen supplies, any input tax
renting of special purpose machinery, equipment, adjustment
vehicles, porter age, quarantine and other fumigation or
vaccination, janitorial services, aircraft cleansing
services, aircraft maintenance services, jet or other fuel
supply services etc.)
Explanation: The fee, taxes or similar other charges
received by Civil Aviation Authority as a regulatory
body for or in respect of its official functions shall not
be charged to tax even though such functions appear to
be of the nature or character of services.
18. Dry port services including operation of a dry port and 9843.0000 Ten Percent
other services provided at or in respect of dry port such (10%) without
as inward/out ward transportation/movement of goods, any input tax
cargo handling, cargo storage or ware housing, adjustment
loading/unloading of cargo, booking or discharge of
cargo, services relating to inspections, certification or
similar or other type of services-related activities in
respect of cargo etc.

83
 19. Services provided or rendered by practitioners, 9816.0000 Five Percent
professionals, consultants and advisers (by whatever 9816.1000 (5%) without
name called) in the irrespective fields or disciplines: 9816.2000 any input tax
a) Medical, dental or allied health fields or disciplines 9816.3000 adjustment:
including para-medics and specialized technicians of 9816.4000
medical fields. 9816.5000 Provided that
b) Human resource management or development 9816.6000 the above
(including training services) 9816.9000 reduced rate
c) Veterinary and allied sciences including pet care. 9826.0000 shall not be
d) Law and allied fields or disciplines. applicable to
e) Financial, accountancy, cost accountancy, audit, tax corporate
management or tax affairs and similar other fields or entities and to
disciplines. such other
f) Business planning, business management, business entities as are
reforms, business communication including operating in
hospitality administration and similar other fields or collaboration or
disciplines. as subsidiary or
g) Software or IT-based system development or branch of
management or similar other such fields. foreign service
h) Similar services in other fields, disciplines or providing
regimes. entities and all
Reduced Rate of Tax: In case of practitioners, such entities
professionals, consultants or advisers of medical shall pay tax at
(including dental) and legal professions or fields, the rate the rate of
of tax shall be Two Percent (2%) without any input tax Fifteen Percent
adjustment and in cases where regular compliance is (15%) and avail
made and continued to be so made, not ax demand for admissible
the period prior to the affectivity date of this entry, shall input tax
be raised or enforced. adjustment.
[Fixed Rate of Tax: In case of practitioners,
professionals, consultants or advisers of legal profession
or field, rupees five hundred (500) shall be deposited as
fixed sales tax at the time of filing of each case, appeal
or petition and proof ofwhich shall be attached with the
Power of Attorney] which shall be attached with the
Power of Attorney.]35

20. Cinematographic p r o d u c t i o n , photographic 9803.0000 [Two Percent

services, 9803.1000 (02%)]36
recording services an d telecasting or b r o ad c as tin g 9803.2000 Without any
services including: 9803.3000 input tax
a) Film making or film production including drama 9803.4000 adjustment
production whether in serials or otherwise. 9803.5000
b) Tele casting or broad casting services (other than TV 9803.9000
cable operators).
c) Videotape and recording services, sound recording
services. TV/Radio production house services.
d) Photographic services (services of photography or
photographers).
e) Other similar, allied, ancillary or auxiliary services.

Exemption: Full exemption on telecasting or broad

casting services of and by government-owned TV or
Radio stations or channels (this exemption shall not be
construed to cover any other service or services

35
Added through Finance Act, 2024 (assented on: 06th June 2024).
36
Substituted through Finance Act, 2024 (assented on: 06th June 2024) for the words, brackets, figure and expression “One
Percent (01%)”.
84
 including advertisements taxable under this Schedule).

21. Event management services whether cover in gall or any 9846.0000 [Ten Percent
of the processes like planning, budgeting, scheduling, (10%)]37
site selection, acquiring necessary permits, coordinating without
transportation and parking, arranging for speakers or any input tax
entertainers, arranging decor, event security, catering, adjustment
picturing, video filming, musical enjoyment so or any
other allied or connected task.
22. Exhibition, convention or carnival services and allied 9825.0000 [Five Percent
services including renting of purpose-specific property (05%)]38
or space for such events. without any
input tax
adjustment
23. Cable TV operators other than those providing internet- 9819.9000 Two Percent
based TV services whether composite, multiple, bundled (2%) without
or otherwise which are chargeable to tax under any input tax
telecommunication services. adjustment
24. Services of fashion designers not engaged in designing, 9828.0000 Five Percent
manufacturing and selling their own products or goods (5%)
through the irregular paid employees.
25. Services provided or rendered by call centers (by 9837.0000 Two Percent
whatever name called) engaged in mediating business, (2%) without
trade or sale/purchase transactions between the sellers any input tax
and buyers whether located inside or outside the country. adjustment.
26. Services provided or rendered by banks or banking 9814.0000 Fifteen Percent
companies, insurance companies, cooperatives and 9814.1000 (15%)
foreign exchange companies or dealers (including 9814.2000
similar institutions or entities besides microfinance 9814.3000
institutions): 9814.4000
9814.9000
a) Banks or banking companies, cooperatives or similar
institutions or entities (their all services including
bank guarantee, brokerage, letter of credit, pay order
or demand draft, bill of exchange, transfer of money
in any manner, bill discounting, lockers and safe
vaults, credit/debit cards, foreign exchange dealings,
ATMs, issue-banking, bank assurance, provision of
loans, business or investment financing or advances,
leasing or re-leasing whether financial,
equipment/commodity-related, musharakah
financing etc.).

b) Insurance companies (their all services including

goods, fire, theft, marine, travel, life, health,

37
Substituted through Finance Act, 2024 (assented on: 06th June 2024) for the words, brackets, figure and expression “Eight
Percent (08%)”.
38
Substituted through Finance Act, 2024 (assented on: 06th June 2024) for the words, brackets, figure and expression “Eight
Percent (08%)”.
85
 industrial, business-related, moveable or
immoveable property insurance and other insurance
and reinsurance services).

c) Services of cooperatives and cooperative societies

(including producer cooperatives, worker
cooperatives, consumer cooperatives, credit unions,
retail or purchasing cooperatives, social
cooperatives, industrial service cooperatives,
manufacturing cooperatives, marketing
cooperatives, cooperative farming societies, housing
cooperatives and credit cooperatives etc.).
d) Services of foreign exchange companies, dealers and
money changers or similar businesses.

e) Other similar banking, insurance, cooperative or

money exchange services.

f) Services of payment system operator or of payment

system provider as have always been or are rendered
or provided in any manner or mode.

[Reduced Rate of Tax: In case of health insurance

services and services in respect of Government
sponsored Sehat Card Plus Programme, the tax shall be
charged at the rate of Ten Percent (10%) without any
input tax adjustment.]39
27. Storage and warehousing services including public 9844.0000 Ten Percent
bounded warehouses, cold storages and yard surplices (10%)without
used for storage of empty or loaded container son rental any input tax
or charges basis. adjustment

Reduced Rate of Tax: The tax on cold storage services

(including other forms of warehousing of agriculture
produce) regardless of their corporate or non-corporate
status shall be charged at the rate of [Two Percent
(02%)]40 without any input tax adjustment.
28. Container terminal services including services of storage 9841.0000 Ten Percent
or warehousing of containers either imported or meant for (10%) without
export including transshipment or transit. any input tax
adjustment
29. Service provided or rendered by persons exclusively, 9805.0000 Fifteen Percent
solely or principally engaged in (inland) inter-city 9805.4000 (15%)
transportation or carriage of goods (whether dry or liquid, 9805.5000
packed, packaged or otherwise) by road or through 9805.6000
pipeline or conduit or through any other modern or 9805.9000
advance technology-based conveyance system. 9812.0000
9812.1000
Explanation: The services provided or rendered by 9812.2000
packers and movers engaged in the transportation of 9812.9000
goods (whether intra-city or inter-city) with or without
prior packing shall be covered in and taxed under this
entry.

39
Substituted through Finance Act, 2024 (assented on: 06th June 2024) for the heading exemption, along with its content.
40
Substituted through Finance Act, 2024 (assented on: 06th June 2024) for the words, brackets, figure and expression “One
Percent (01%)”.
86
 [29A Services provided as facilities for intra-provincial and 9804.4000 Five Percent
. inter-provincial travel or transportation (including 9805.9000 (05%) without
carriage) of persons by road through buses, coaches, input tax
coasters, wagons, jeeps, cars, taxies and other motor adjustment]41
vehicles primarily meant for passengers’ transport or
other traveling or transportation services.

Clarification: In case of inter-provincial transportation

of persons by road through above means, the value for the
purposes of sales tax shall be reduced by 50% where such
services originate or terminate in the Province.

30. Services provided by laboratories, scientific laboratories, 9817.0000 Ten Percent

mechanical laboratories, chemical laboratories, electrical 9817.1000 (10%)without
or electronics laboratories, pathological laboratories, 9817.2000 any input tax
Forensic laboratories medical diagnostic laboratories 9817.3000 adjustment
including technical services relating to X-rays, CT Scan, 9817.4000
MR Imaging (MRI), ultrasound, echo etc. or other such 9817.5000
laboratories. 9817.6000
9817.9000
Exemption: Full exemption to:
(i) The laboratories sponsored, controlled and managed
either by the Government or its autonomous bodies.

(ii) The labor other medical tests carried out against a

valid medical prescription issued by a competent
medical practitioner aimed at medical diagnosis or
medical examination of a disease in any patient for
medical treatment purposes.
31. Visa processing or visa acquisition services including 9855.0000 Fifteen Percent
advisory or consultancy services for foreign education (15%)
or migration provided by persons in their private
business or professional capacity.

Explanation: Where any person providing services

under this entry is also helping or serving his client for
the issuance or renewal of the client’s passport, the actual
amount of fee charged by the Government for the
issuance or renewal of the passport shall not be included
in the value of services for the purposes of assessment of
tax.
32. Valuation or assessment services including competency 9848.0000 Five Percent
and eligibility testing services and services involving (5%) without
written tests with or without interviews for job or work any input tax
recruitment or selection for any other purposes. adjustment

Explanation: For the purpose of this entry, valuation or

assessment includes revaluation, reassessment or
repetition thereof.

41
Inserted through Finance Act, 2024 (assented on: 06th June 2024).
87
 33. Services provided for inland carriage of goods by air, 9805.2000 Fifteen Percent
railways or otherwise against freight or carriage charges: 9805.3000 (15%)

Reduced Rate of Tax:

The following services of Pakistan Railways whether

falling under this serial No. or elsewhere in this Schedule,
shall be liable to tax at the rate of Two Percent (2%)
without any input tax adjustment:

(i) courier services in relation to the speedy, fast, quick

or urgent mail, parcel or cargo services provided; and

(ii) services provided for inland carriage of goods against

freight or carriage charges.
34. Services provided or rendered by under writers including 9819.1100 [Two Percent
sponsorship services. (02%)]42 without
any input tax
adjustment
35. Services provided or rendered by indenters and similar 9819.1200 Two Percent
intermediaries. (2%) without
any input tax
adjustment
36. Services provided or rendered by auctioneers. 9819.9100 [Two Percent
(02%)]43 without
any input tax
adjustment
37. Dredging or desilting services including cleaning of 9822.4000 Fifteen Percent
canals, water channels/tunnels/ lines or reservoirs, pools, (15%)
fish ponds, lakes or dams in any manner.
38. Services relating to or involving collection, provision, 9854.0000 Fifteen Percent
organization, digitization, processing, analysis, safety, (15%)
preservation, sharing, verification, validation,
decontamination or any other treatment of data including
granting access to data for the purposes of information-
gathering, information-verification, information-
authentication or similar other purposes.
39. Services provided or rendered in respect of quality 9834.0000 [Two Percent
assurance, quality control, quality inspection (including (02%)]44 without
pre-inspection), quality verification or certification any input tax
including verification or certification of quality or adjustment
standards under ISO regime.
40. Rent-a-car or rent-a-cab services. 9819.3000 Five Percent
(5%)
Explanation: The persons engaged in providing or
rendering service so frent-a-car or cab shall pay tax
regardless of the category of the vehicle or logistics used
in respect of such services.
41. Ride-hailing or ride-hail services like Uber, Cream, 9851.0000 [Five Percent
Biker and Lyft etc. regardless of the mode, manner or (05%)]45 without
dynamics of the business system involved in such Input tax
services. adjustment
Saving:
In cases where regular tax compliance from the effectivity
date of this entry is made and continued to be so made,

42
Substituted through Finance Act, 2024 (assented on: 06th June 2024) for the words, brackets, figure and expression “One
Percent (01%)”.
43
Substituted through Finance Act, 2024 (assented on: 06th June 2024) for the words, brackets, figure and expression “One
Percent (01%)”.
44
Substituted through Finance Act, 2024 (assented on: 06th June 2024) for the words, brackets, figure and expression “One
Percent (01%)”.
45
Substituted through Finance Act, 2024 (assented on: 06th June 2024) for the words, brackets, figure and expression “Two
Percent (02%)”.
88
 no tax demand shall be raised or enforced for the period
prior to such date.
42. Online Market Place (OMP) including online platform or 9852.0000 Two Percent
portal services by whatever name called (other than ride- (2%) without
hailing or ride-hail services). any input tax
adjustment
43. Services relating to or in respect of (continuous, inter 9847.0000 Fifteen Percent
connected, networked or otherwise) infrastructural (15%)
system based transmission (wheeling) or distribution of
electric power (electricity) or gas by companies
including subsidiary companies of power generating
companies (or persons) other than companies (persons)
who directly transmit or distribute their own generated/
produced electricity or their own recovered/ produced
gas.

Explanation: The companies (persons) required to pay

tax only on the gross component/ amount of their
transmission or distribution charges (by whatever name
called).
44. Services relating to or in respect of the installation, 9853.0000 [Two Percent
erection, commissioning or other permanent structure- (02%)]46 without
affixed/ linked/ tied placement (whether full or in part) any input tax
of any industrial, mechanical or electrical plant, adjustment
machinery or equipment (excluding installation of
domestic equipments etc. for residential use).

Explanation: The factors like new, reconditioned,

repaired, over hauled or old status of the equipments or
carrying out any work/ process or works/processes
related thereto, shall not affect the levy of tax under this
heading.

Saving: Separate /new insertion of this entry shall under

no circumstances effect the tax liabilities already
discharged or yet to be discharged under the category or
class of services of contractual execution of works under
the substituted Schedule.
45. Amusement and entertainment services including 9836.0000 Five Percent
cinema(all categories), amusement parks, modeling 9839.0000 (5%)without
shows, music concerts etc. input tax
adjustment
46. Inspection and survey (including re-inspection and re- 9819.4000 Fifteen Percent
survey) services not specifically covered in any other (15%)
entry of this Schedule.
[46A Management services, including fund and asset 9857.0000 Fifteen Percent
. management services. (15%)]47

46
Substituted through Finance Act, 2024 (assented on: 06th June 2024) for the words, brackets, figure and expression “One
Percent (01%)”.
47
Inserted through Finance Act, 2024 (assented on: 06th June 2024).
89
47. Allallied, ancillary, auxiliary, related, substitutive, Rate of Tax as
comparable or matchable services not specifically, per the closest
directly or indirectly mentioned any wherein this respective entry
Schedule but fall in or are linked in any manner to the or entries
category or categories of services covered in any of the
class or classes of services mentioned or included in the
Schedule provided that no argument as to variation in
description shall be relevant or permissible for the
application of this entry regardless whether such allied
and other services are provided by the same person
(service provider) whose services are falling under other
serial number or numbers or by any other person
(service provider) to such same person or to any other
person.

90
Interpretation.

For the purposes of usage and application of the Second Schedule and for understanding
the matters related thereto, the following principles shall be binding and followed as an
integral part thereof:
1. Each serialized entry in the Second Schedule primarily reflects and covers distinct
class of services, which means the scope or coverage of tax runs through or
alongside the lines of the classes of services. Thus, the specific service descriptions
in any class of services does not mean that description of the service is exhaustive.
The service shall remain taxable even if it is not cited as such under the class of
services covered in the Second Schedule; such service shall be taxable as one of the
services of the relevant class of services.

2. Where by virtue of interpretation or otherwise, any service can be considered to be

classified or is otherwise found to be classifiable with matching or equal accuracy
under two or more entries of the Second Schedule, such service shall be classified
and taxed under or with reference to the entry appearing later in number regardless
whether the rate of tax under such later entry is lower or higher.

3. Due to changes in science and technology, the jargon or nomenclature of market

economics and business world is changing faster than changes or adjustments
which may be made in the legal instruments. But for the purposes of taxability
under the Second Schedule, if any service is liable to tax with reference to a
particular description mentioned in the Second Schedule, the service shall
continue to be taxable regardless of any sudden, unexpected or unanticipated
change in its commercial or business description, market name or appellation for
any reason, whatsoever.

4. Where a person is providing or rendering under the same business name two or
more services and all such services are liable to tax at the same rate, he may, if he so
desires or needs, use only one entry of the Second Schedule covering the major
portion of his business turnover, for the purposes of tax assessments and tax
declarations.

5. Where a character, nature, dynamic or purpose of any service exactly or

substantially resembles or matches with service taxable under the Second Schedule
and such service can be used as a perfect or close substitute of the scheduled service,
such service shall be considered and liable to tax under the Second Schedule.

6. Classifications of services given either in the First Schedule or in the Second

Schedule are just for reference and accounting purposes. They have no bearing on
the taxability of any service. The taxability of a service shall be determined with
reference to its description either mentioned separately or included in the class of
services under the Second Schedule read with these principles of interpretation.

7. Non-mentioning of a classification heading of any service in the Second Schedule

shall not in any manner effect the taxability of such service in the said Schedule,
nor such non-mentioning shall be taken as plea for non-charging, immunity or
exemption of tax.

8. Where in the Second Schedule, a description of the main or principal service or

services has been mentioned, it shall include all allied, ancillary, auxiliary, related or
connected services whether provided or rendered in the form of facility or utility as
a part of the main contract or transaction or otherwise and shall be considered as a
part and parcel of the main or principal service or services and its value shall
invariably be included in the valuation and assessment of tax of such main or
principal service or services.

9. Where under any entry, any service or services have been specifically excluded,
such service or services shall not be classified or claimed to be classifiable such
entry for the purpose of tax assessment or otherwise.

91
10. Nowhere in any entry “inclusion” of any service or services shall, unless the
context otherwise specifically requires, be construed as exclusion of other service or
services otherwise falling in or under such entry either by virtue of class of services
or otherwise.

11. Where any service is provided or rendered solely against commission or

commission charges, tax assessment shall be made on the basis of the gross amount
received or to be received on account of such commission or commission charges.

12. Where during providing of any services by a person who is providing his services
by virtue of his professional credentials, procures any durable and repeat-use goods
(not the consumable materials procured by the service provider with his own funds
as his own business inputs) purely on behalf of and for his client out of the funds
provided or to be provided by the client and title of such goods is on acquisition and
thereafter continues to be in the name of the client, value of such goods shall not be
included in the value of services despite their being meant for use or having been
used in the providing of services by such person provided that no input tax
adjustment in respect thereof shall be available or admissible under any
circumstances and as far the input tax adjustment in respect of the consumable
materials purchased as business inputs as aforesaid, it will be available or
admissible only if allowed under this Act or the rules made thereunder.

13. Unless otherwise specified elsewhere in the Second Schedule or under any
notification issued under this Act, the corporate sector entities providing or
rendering services liable to reduced rates of tax against serial numbers 9, 10, 11,
13, 17, 18, 21, 22, 27, 28 (other than public sector entities providing services
covered therein), 39 and 44 of the said Schedule shall not pay tax at any such
reduced rate. Such entities shall mandatorily pay tax at standard rate of 15% and all
benefits of the admissible input tax adjustment shall be available to them.

14. Subject to para 13, the services provided by or relating to dealers of agriculture
machinery and equipments, commission agents of agriculture produce, agriculture-
specific market research, human resource development or management in
agricultural fields, and exhibitions of agricultural products or products usable
exclusively in agriculture sector shall be charged to tax only at the rate of two
percent (2%) without any input tax adjustment.

92