Punjab Revenue Authority has issued Punjab Sales Tax on Services (Withholding) Rules, 2012 vide its notification No. PRA / Orders. 06 / 2012 (11) dated 27.08.2012. The following persons have been appointed as withholding agents in case they receive taxable services.
(a) Federal and Provincial Governments including local and district governments, government departments and offices;
(b) autonomous bodies;
(c) public sector organizations including public corporations, state-owned enterprises and regulatory bodies and authorities;
(d) organizations which are funded, fully or partially, out of the budget grants of the Federal or Provincial Government;
(e) taxpayers falling in the jurisdiction of Large Taxpayers Units (LTU) established by the Federal Board of Revenue;and
(f) recipients of service of advertisements who are registered for the Federal sales tax on goods or for the Punjab sales tax on services.
A withholding agent appointed under these rules shall deduct the amount of sales tax in the following terms:
(i) a withholding agent other than person registered in LTU and recipient of advertisement service who receives a taxable service from a registered person, will deduct 1/5th of the sale tax at the applicable rate.
(ii) a withholding agent other than recipient of advertisement service who receives taxable services from an unregistered person, will deduct sale tax at the applicable rate i.e. 16% at present.
(iii) a withholding agent registered in LTU will deduct 1% of the value of taxable services received by him.
(iv) recipient of service of advertisement will deduct sale tax at the applicable rate as i.e. 16% as at present.
In case the withholding agent is registered with PRA, he will file return and deposit the withheld amount of sale tax in the manner as provided in the rules, along with other tax liability.
In case the withholding agent is not registered with PRA, he will file the return in the form PST-04 as set out in the Annexure to the said rules and deposit the amount deducted at source under head of account “B-02382-Punjab Sales Tax on Services (Withholding)”