Sindh Revenue Board Karachi

LETTER FROM LETTER FROM SINDH REVENUE BOARD, KARACHI TO SHAFQAT M. SAGAR, ADVOCATE & TAX CONSULTANT, KARACHI (Re: Amendments notified in the Sales Tax Special Procedure (Withholding) Rules, 2007, through S.R.O. 98(1)/2013 dated 14-2-2013) Shafqat M. Sagar, Advocate & Tax Consultant, S.M. Law Associates, E-39, Executive Floor Glass Tower, Main Clifton Road, Clifton, Karachi-75600. SUBJECT: AMENDMENTS NOTIFIED IN THE SALES TAX SPECIAL PROCEDURE (WITHHOLDING) RULES, 2007, THROUGH S.R.O.98(I)/2013 DATED 14-2-2013. Dear Sir, Kindly refer to your letter No.SML/13193/MFEASRD-FBR/ 2013 dated 18-2-2013 addressed, on the above subject, to the Revenue Division, FBR, and copy endorsed to SRB. 2. With the enactment of the Sindh Sales Tax on Services Act, 2011 ("the 2011-Act") and the notification of the Sindh Sales Tax Special Procedure (Withholding) Rules, 2011 ("the 2011-Withholding Rules"), the administration, collection, withholding and deposit of the Sindh Sales Tax (SST) is not governed by the provisions of the Sales Tax Act, 1990 ("the 1990-Act") and the rules made thereunder, including the Sales Tax Special Procedure (Withholding) Rules, 2007 (the 2007-Withholding Rules).The provisions of Article 270-AA(7) of the Constitution are relevant in this regard and the Sindh Government has not issued any authorization under section 14 of the said 2011 Act, to FBR to administer, regulate, collect or demand the amounts (including the withheld amounts) of Sindh Sales Tax. As correctly stated in paragraph 1(second time 'a') of your letter under reference, the confusion and ambiguity created under FBR's letter No.1/23-STB/2010(Pt)/177755-R dated 30-12-2011 stand clarified under FBR's withdrawal letter No. 1/23-STB/2012(Pt)/105231-R dated 27-7-2012. 4. As stated in rule 3 of the FBR-prescribed 2007-Withholding Rules, it relates to the tax invoices issued under section 23 of the 1990-Act to the FBR's Withholding Agents. The tax invoices of the SRB-registered service providers are not issued in terms of section 23 of the 1990-Act but are issued under Rule 29(1) of the Sindh Sales Tax on Services Rules, 2011. 5. Your clients, and all others concerned, may be informed accordingly to ensure that withheld amounts of Sindh Sales Tax on the services provided or rendered by SRB-registered persons are duly deposited in Sindh Government's head of account "B-02384" against SRB-prescribed PSID/Challan (Form SST-04 or Form SSTW-04, as the case may be) in the manner prescribed under the Sindh Sale Tax Special Procedure (Withholding) Rules, 2011, by the prescribed due date. Payments of Sindh Sales Tax (including the withheld amounts of Sindh Sales Tax) in any head of account other than "B02384" and against any PSID/Challan other than SST-04 or SSTW-04 shall be treated as invalid payments and non-payment of Sindh Sales Tax. Consequently, SRB will take recovery action, in the prescribed manner, in such cases. 6. In case you have any further query to make or any further clarification to seek in this regard, you may call SRB helpline 111-778-000 or visit SRB helpdesk at 9th floor of Shaheen Complex, M R Kayani Road, Karachi, or contact SRB at info@srb.gos.pk at your convenience.