Tax Rates for Sindh Revenue Board

The Sindh government in Pakistan has implemented a revised sales tax structure for the 2024-25 fiscal year, aiming to increase revenue generation. Here's a breakdown of the key changes:

Sales Tax Increase:

• Effective July 1, 2024, the standard Sindh Sales Tax (SST) rate has risen from 13% to 15%.
• Telecommunication Services are taxed at 19.5%

Affected Businesses:

• This increase applies to various sectors, including restaurants, cafes, bakeries, wedding halls, hotels, guest houses, farmhouses, and cleaning services. Businesses in these sectors will need to collect and remit the new tax rate.

Incentive for Electronic Payments:

• To encourage digital transactions, the government offers a special benefit for customers using debit or credit cards.
• When paying with these cards, customers will enjoy a reduced sales tax rate of 8%. This translates to a 7% discount on their bills compared to the standard 15% rate.

Sales Tax Exemption for Small Restaurants in Sindh

The Sindh government has introduced a sales tax exemption for small restaurants with an annual turnover not exceeding Rs. 2.5 million. However, this exemption comes with certain conditions.

Who Qualifies for the Exemption?

To be eligible for the sales tax exemption, restaurants must meet the following criteria:

• Annual turnover: Less than Rs. 2.5 million
• Location: Not located within hotels, motels, guest houses, farmhouses, or clubs.
• Not a franchise: Neither a franchisor nor a franchisee.
• Single outlet: Only one outlet in Sindh.
• Utility bills: Total utility bills (gas, electricity, and telephone) should not exceed Rs. 40,000 per month.

SST Rates for Marriage Halls and Certain Exemptions:

The Sindh government has imposed a 15% sales tax on marriage halls and lawns. However, there are specific exemptions and conditions that determine the tax liability of these businesses.

Exemption Criteria

Marriage halls and lawns located on plots measuring 800 square yards or less are generally exempt from sales tax. However, this exemption does not apply to:

• Halls or lawns that are air-conditioned.
• Halls or lawns located within hotels, motels, guest houses, farmhouses, restaurants, or clubs.
• Halls or lawns owned, managed, or operated by caterers.
• Franchise operations.
• Businesses with multiple halls or lawns in Sindh.

Additional Conditions

To qualify for the exemption, marriage halls and lawns must meet specific criteria related to utility bills. The total electricity, gas, and telephone bill should not exceed Rs. 40,000 per month.

This article was published at SRB Tax Rates for Professionals & Consultants