How to Register for Sales Tax with the Punjab Revenue Authority (PRA)
The government has been making efforts to increase business accountability and repair Pakistan’s wayward taxation system for quite some time now. A number of steps have been taken in order to tighten the tax net and encourage more people to submit taxes to the government. There are a variety of taxes applicable in Pakistan, just like in the rest of the world. The Punjab Revenue Authority (PRA) is a governmental body that is responsible for the collection and management of Sales tax on services. Sales tax on services is applicable to any business/individual who offers services in various sectors.
What is Sales Tax on Services?
The government collects taxes through a variety of channels in order to generate revenue. When collected and managed properly, revenue collected from taxation can be invested by the government for national development.
Sales tax on services is basically taxation that is applicable to businesses and individuals who work in the service sector. Every country has its own regulations for sales tax on services. In Pakistan, this tax is applicable to more or less all service providers. The standard sales tax on services rate that has been defined by the Pakistani government is 17%.
Who is Obligated to Pay Sales Tax on Services in Pakistan?
The government has provided clear outlines regarding the criteria which determines who is applicable for sales tax on services registration. Anyone who is providing services that are defined as taxable is obligated to register with the PRA. Parties that are providing more than one taxable service only need to apply for one registration. Parties dealing in multiple taxable services will have to mention all services being provided in their application and provide certificates of registration as well.
Parties that are offering taxable services in more than one province, they must register separately (in the case of Punjab, with the PRA) and pay tax for services being provided in Punjab. All registered parties are required to mention their registration number on all bills, invoices, vouchers, and similar documents generated by them.
As the accountability situation is beginning to improve in the country, it is recommended that everyone who is applicable for paying tax should register themselves as soon as possible. failure to do so can lead to you getting into trouble with the authorities.
Here’s a list of service sectors on which sales tax is applicable:
- Marketing companies
- Advertisement companies
- Financial consultancies (chartered accountants as well)
- Business and travel consultants
- Legal Profession
- Banking Services
- Cafes, hotels, and restaurants
- Call centers and IT businesses
- Construction services
- Catering services
- Telecommunication services
- Courier services
- Shipping and customs agents
- Property Builders and developers
- Insurance Companies
- Clinics, beauty parlors, and salons
- Tour operators and airline agents
- Transport services
- Automobile dealers
- Commissions and brokerage agents
- Dry cleaning and laundry services
- TV cable service providers
- Newspaper advertisements
- Car dealerships
- Car rentals
- Film makers and photographers
If you are operating in any of the above-mentioned service sectors, it is compulsory for you to submit a sales tax on services of 17% to the government. Keep in mind that the sectors on which sales tax is applicable can be revised by the government at any time.
Registering for Sales Tax on Services in Pakistan
In order to pay sales tax on services, you need to first register yourself with the PRA. This has become quite easy thanks to digitization. Once you register yourself with the PRA, you can monitor your tax payments and manage them through PRA’s online portal.
In order to register for sales tax, you need the following documents:
- PST 01 Form
- Personal NTN or company NTN (if applicable)
- Personal CNIC or company partners CNIC (if applicable)
- Email address and mobile number
- Form C is required for the registration of partnership firms
- Form II is required for the registration of private limited companies
- Partnership deed is required for the registration of partnership firms
- Incorporation certificate, AOA, and MOA is required for the registration of private limited companies
- Copy of paid electricity bill
- Copy of tenancy agreement and the business premises’ owner’s CNIC
- A certificate of bank maintenance
Once you have all the documents ready, you can begin the registration process.
The Registration Process
1) Go to PRA’s registration portal and if you already have an NTN, click on “e-registration”. After this, click on “new e-registration having NTN”.
2) You will now be prompted to enter your NTN number (if you’re registering as a new AOP company) or your CNIC (if you’re registering as a new individual)
a) Enter the required details and press okay.
b) Upon entering your information, you will be taken to a form in which all your information stored with the FBR will be pre-filled.
c) In case your registered NTN number is not recognized, you should:
i) Check whether you’ve entered it correctly
ii) Send an email to firstname.lastname@example.org in order to have your NTN manually entered into PRA’s database.
The email should have the following format:
– Subject: Add NTN in database
– NTN number
– Business name
– Service sector category
iii) For people who do not have an NTN number, you must first go to FBR’s website and register for an NTN
3) After entering your NTN/CNIC, you will now be prompted to fill out the registration form and provide details of your representative.
4) AOP companies will be required to provide details about their shareholders/directors as well.
5) After this, provide details about your business
6) Now, enter details about your bank account
7) Your application is now completed and you can get it printed for submission.
Once you have submitted your application along with all of your relevant documents, your application will be processed by the PRA. After being accepted, you will receive a passcode and activation details through email and SMS. Finally, the PRA will allot a PNTN to you and your registration is completed.
Keep in mind that the PRA may ask you for additional documentation if it deems necessary. Also, the PRA also has the authority to reject an applicant’s registration application for a valid reason. In this case, the authority will share the reason(s) for which the application was rejected within 30 days of the date on which the completed application was submitted to the authority.
The online portal makes the registration process a lot easier as you don’t have to take out time to go to PRA’s offices multiple times. If you stop providing a taxable service, you will have to de-register yourself as well. The details of the registration and de-registration process can be read in PRA’s notification regarding sales tax on services.