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ACT II OF 2019 ACT II OF 2019 BALOCHISTAN SALES TAX ON SERVICES (AMENDMENT) ACT, 2019. An Act to amend the Balochistan Sales Tax on Services Act, 2015 (Act No. VI of 2015) [Gazette of Balochistan Extraordinary, 15th January, 2019] No. PAB / Legis; V (37) / 2018, dated 15.1.2019.--- The Balochistan Sales Tax on Services (Amendment) Bill No. 37 of 2018 having been passed by the Provincial Assembly of Balochistan on 24th December, 2018 and assented to by the Acting Governor of Balochistan, on 3rd January 2019 is hereby published as an Act of the Balochistan Provincial Assembly. Preamble.---WHEREAS, it is expedient to amend the Balochistan Sales Tax on Services Act, 2015 for the purposes hereinafter appearing; It is hereby enacted as follows: - 15. Insertion of new Sections 16A, 16B and 16C, Act VI of 2015.---In the aforesaid Act, after section 16 as so amended, the following new sections shall be inserted. "16A. Certain Transactions Not Admissible.---(1) Notwith-standing anything contained in this Act or any other law for the time being in force, payment of the tax amount for a transaction exceeding value of fifty thousand rupees, shall be made by a crossed cheque drawn on a bank or by crossed bank draft or crossed pay order or any other crossed banking instrument showing transfer of the amount of the sales tax invoice in favour of the service provider from the business bank account of the service recipient. (2) Online transfer of payment from the business account of service recipient to the business account of service provider as well as payments through credit card shall be treated as transactions through the banking channel, subject to the condition that such transactions are verifiable from the bank statements of the respective service provider and the service recipient. (3) The service recipient shall not be entitled to claim input tax credit, adjustment or deduction, or refund, repayment or zero-rating of tax under this Act if payment for the amount is made otherwise than in the manner prescribed in subsection (1), provided that payment in case of a transaction on credit is transferred within one hundred and eighty days of issuance of the tax invoice. (4) The amount transferred in terms of this section shall be deposited in the business bank account of the service provider; otherwise, the service provider shall not be entitled to claim input tax credit, adjustment or deduction, or refund, repayment or zero-rating of tax under this Act. Explanation: For purposes of this section, the term "business bank account" means a bank account utilized by the registered person for business transactions, declared to the Authority in the prescribed manner. 16B. Input Tax Credit Not Allowed.---(1) Notwithstanding anything contained in this Act, a registered person shall not be entitled to claim, reclaim, adjust or deduct input tax in relation to- (a) the goods 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 suppliers of goods; (c) the services in respect of which the Provincial sales tax has not been deposited in the treasury of the respective Provincial Government, and the services in respect of which the Islamabad Capital Territory sales tax has not been deposited in the treasury of the Federal Government; (d) further tax, extra tax or value addition tax levied under the Sales Tax Act, 1990, and the rules or notifications issued thereunder; (e) fake, false, forged, flying or fraudulent invoices or the invoices issued by persons black-listed or suspended by Authority or FBR or any other Provincial Sales Tax Authority/Board; (f) capital goods and fixed assets not exclusively used in providing or rendering of taxable services; (g) goods and services acquired for personal or non-business consumption, excluding the following ones directly used and consumed in the economic activity of a registered person in provision of the services paying sales tax at a rate not less than fifteen per cent ad valorem, such as - (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, footwear, hand wear, head wear for the employees; (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 registers), 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 not below the rank of Assistant Commissioner; (i) 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) goods or services used or consumed in a service liable to sales tax at ad valorem rate lesser than fifteen per cent or at specific rate or fixed rate or at such other rates not based on value; (k) goods or services as are liable to sales tax, whether a federal sales tax or a provincial sales tax, at specific rate or at fixed rate or at such other rates not based on value or at a rate lesser than fifteen per cent ad valorem and are used or consumed as inputs in the provision of a taxable service under the Act: Provided that in case of telecommunication services paying sales tax at a rate not less than nineteen and a half per cent ad valorem, the amount of sales tax paid on goods and services at ad valorem rates not exceeding seventeen per cent, can be claimed by the person providing the taxable telecommunication services. (l) the amount of sales tax paid on the telecommunication services in excess of nineteen and a half per cent ad valorem and the amount of sales tax paid on other taxable goods or services in excess of fifteen per cent ad valorem; (m) such goods or services as are notified by the Authority to be in-admissible for input tax claim or reclaim or credit or adjustment or deduction; (n) goods and services already in use on which the tax is not paid, or, where paid, the input adjustment has been taken before the commencement of the Act or where the input related goods and services were purchased or acquired before such commencement; (o) carry forward of the input tax adjustment relating to the period prior to the commencement of the Act; (p) goods and services in respect of which input tax adjustment is barred or disallowed under the respective federal and provincial sales tax laws; and (q) goods and services which, at the time of filing of return by the buyer or service recipient, have not been declared by the supplier or service provider in his return. (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 services in such manner as may be prescribed by the Authority. (3) No person other than a person registered under sections 25, 26 and 27 of the Act shall claim or adjust or deduct 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. 16C. Adjustment of Input Tax Paid on Certain Goods and Services.---Notwithstanding anything contained in this Act and without prejudice to provisions of section 16A, the input tax paid on the acquisition of such of the capital goods, machinery and fixed assets as are classified under section XVI, Chapters 84 and 85 of the First Schedule to the Customs Act, 1969 (Act No. IV of 1969), shall be adjustable against the output tax in twelve equal monthly installments."