TIPU ASSOCIATES

(TAX, FINANCE AND CORPORATE CONSULTANTS)

DISCUSSION SESSION
ON
FINANCE BILLS, 2019-2020

97/8-B BABAR BLOCK, NEW GARDEN TOWN, LAHORE.

PHONE NO. 042-111-9210-10 EMAIL: INFO@TIPUASSOCIATES.COM
 IMPORTANT AMENDMENTS PROPOSED IN
ISLAMABAD CAPITAL TERRITORY (TAX ON
SERVICES) ORDINANCE, 2001
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• AMENDMENT:

Before Finance Bill 2019-20 rate of tax for Call centres was 18.5% which has been reduced to 17%
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 IMPORTANT AMENDMENTS PROPOSED IN
PUNJAB SALES TAX ON SERVICES ACT, 2012
 SECTION 16B: TAX CREDIT NOT ALLOWED
SUBSECTION (g) AND (h) SUBSTITUTED
• PREVIOUS TEXT
(g) goods and services liable to a tax rate
lesser than sixteen percent of the charges
or to a specific rate of tax not based on
value when used for providing or rendering
any service;
(h) goods and services used or consumed in
a service liable to a rate of tax lesser than
the sixteen percent of the charges or to a
specific rate of tax not based on value;
• SUBSTITUTED TEXT
(g) goods and services liable to a tax rate
lesser than fifteen percent of the charges or to
a specific rate of tax not based on value when
used for providing or rendering any service;
(h) goods and services used or consumed in a
service liable to a rate of tax lesser than the
fifteen percent of the charges or to a specific
rate of tax not based on value;

• IMPACT OF AMENDMENT:
Input tax shall not be allowed against services liable to tax rate less than 15%
 SECTION 16B: TAX CREDIT NOT ALLOWED
SUBSECTION (n) SUBSTITUTED

• PREVIOUS TEXT • SUBSTITUTED TEXT

(n) goods and services not related to (n) goods and services not related to
the taxable supplies made by the the taxable supplies made or services
registered person; rendered by the registered person;

• IMPACT OF AMENDMENT:
Input tax shall not be allowed against services provided by unregistered person.
SECTION 24A: DETERMINATION OF MINIMUM TAX LIABILITY
NEW SECTION INSERTED
• PREVIOUS TEXT • INSERTED TEXT
N/A Notwithstanding anything contained in section
24, where a registered person fails to file a
return, an officer of the Authority, shall,
subject to such conditions as specified by the
Authority, determine the minimum tax liability
of the registered person.

• IMPACT OF AMENDMENT:
In case of non-filing of return, minimum tax liability shall be determined by PRA.
 SECTION 48: OFFENCES AND PENALTIES
NEW SERIAL NUMBERS INSERTED FROM SR. NO. 17 TO 20
• PREVIOUS TEXT • INSERTED TEXT
N/A

• IMPACT OF AMENDMENT:
New penalties imposed
 SECTION 48: OFFENCES AND PENALTIES
NEW SERIAL NUMBERS INSERTED FROM SR. NO. 17 TO 20

• PREVIOUS TEXT • INSERTED TEXT

N/A

• IMPACT OF AMENDMENT:
New penalties imposed
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*Toll manufacturing is
subject to GST @ 17%
U/S 2(46)(f) of STA, 1990

*text printed in Bold has been inserted vide Punjab Finance Act, 2019-20
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*text printed in Bold has been inserted vide Punjab Finance Act, 2019-20
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NEW SERIAL NO. INSERTED FROM 64 TO 68
 IMPORTANT AMENDMENTS PROPOSED IN
SINDH SALES TAX ON SERVICES ACT, 2011
 SECTION 2: DEFINITIONS
NEW SUB-CLAUSE (13B) INSERTED - AUDITOR
• PREVIOUS TEXT • INSERTED TEXT
N/A (13B) “Auditor” means a person appointed as
an Auditor of Sindh Revenue Board under
section 34

• IMPACT OF AMENDMENT:
Definition of “Auditor” provided in the ACT.
 SECTION 2: DEFINITIONS
NEW SUB-CLAUSE (19A) INSERTED
• PREVIOUS TEXT • INSERTED TEXT
N/A (19A) “cab aggregator” means a person who is an
aggregator or operator or intermediary or online
marketplace who canvasses or solicits or facilitates
passengers for travel by motor vehicles like taxi, cab,
car, van, motorcycle and rickshaw, and who connects
the passenger or the intending passenger to a driver of
any of the aforesaid motor vehicles through telephone,
cellular phone, internet, web-based services or GPS or
GPRS-based services, electronic or digital means,
whether or not he charges or collects any fee, fare,
commission, brokerage or other charges or
• IMPACT OF AMENDMENT: consideration for providing or rendering such services;

Definition of “Cab Aggregator” provided in the ACT.

 SECTION 2: DEFINITIONS
SUB-CLAUSE (42A) AMENDED – FASHION DESIGNER
• PREVIOUS TEXT • SUBSTITUTED TEXT
(42A) “Fashion Designer” means a person
providing or rendering the services of fashion
designing including the economic activities
relating to conceptualizing, outlining and
creating designs and preparing designs and
patterns for costumes, apparels, garments,
clothing, accessories, jewelry, foot wears or any
other services incidental or ancillary like
marketing, packing, delivery, display, and other
similar services to such fashion designing.
• IMPACT OF AMENDMENT:
Tailoring and stitching services are also brought under the definition of “Fashion Designer”
(42A) “Fashion Designer” means a person providing
or rendering the services of fashion designing
including the economic activities relating to
conceptualizing, outlining and creating designs and
preparing designs and patterns for fabrics,
costumes, apparels, garments, clothing, accessories,
jewelry, foot wears or any other services incidental
or ancillary like tailoring, stitching, marketing,
packing, delivery, display, and other similar
services to such fashion designing.
 SECTION 2: DEFINITIONS
NEW SUB-CLAUSE (51A) INSERTED
• PREVIOUS TEXT • INSERTED TEXT
N/A “(51B) “indoor sports and games center”, by
whatever name called, includes a person who
provides or renders the facility of indoor
sports or games whether for amusement,
recreation or otherwise, for a consideration in
its premises

• IMPACT OF AMENDMENT:
Definition of “indoor sports and games center” provided in the ACT.
 SECTION 2: DEFINITIONS
NEW SUB-CLAUSE (53A) INSERTED
• PREVIOUS TEXT • INSERTED TEXT
N/A (53A) “insurance agent” includes an agent as
defined in clause (a) of sub-rule (1) of rule 2
of the Insurance Rules, 2017 and also includes
an insurance broker as defined in clause
(xxviii) of section 2 of the Insurance
Ordinance, 2000 (Ordinance No. XXXIX of
2000)

• IMPACT OF AMENDMENT:
Definition of “insurance agent” provided in the ACT.
 SECTION 2: DEFINITIONS
NEW SUB-CLAUSE (60B) INSERTED
• PREVIOUS TEXT • INSERTED TEXT
N/A (60B) “online marketplace” means an
information technology platform run by e-
commerce entity or organization over an
electronic network that acts as a facilitator in
transactions that occur between a buyer and
a seller or between a service provider and
service recipient;

• IMPACT OF AMENDMENT:
Definition of “online marketplace” provided in the ACT.
 SECTION 2: DEFINITIONS
NEW SUB-CLAUSE (72CC) INSERTED
• PREVIOUS TEXT • INSERTED TEXT
N/A (72CC) “renting of machinery, equipment, appliances and other tangible
goods” means the services provided or rendered, to any person by
another person, by renting of machinery, equipment, appliances and other
tangible goods including bulldozers, excavators, road rollers and levelers,
cranes, construction machinery and equipment, earthmoving machinery
and equipment, scaffolding, generators, refrigerators or in relation to such
renting.
Explanation. The commodity or equipment leasing and the hire purchase
leasing, as classified under tariff heading 9813.3020 and 9813.3030,
respectively, and also the rent a car and automobile rental service, as
classified under tariff heading 9819.3000, shall be excluded from the
purview of this clause;”;
• IMPACT OF AMENDMENT:
Definition of “renting of machinery, equipment and other tangible goods” provided in the ACT.
 SECTION 2: DEFINITIONS
NEW SUB-CLAUSE (84A) INSERTED
• PREVIOUS TEXT • INSERTED TEXT
N/A “(84A) “site preparation and clearance, excavation and earth moving and
demolition services” means any service provided or rendered, to any person by
another person, in relation to site preparation and clearance, excavation and
earthmoving and demolition and such other similar activities, including –
(i) drilling, boring and core extraction services for construction, geophysical,
geological and similar purposes but not including the services in relation to mining
of minerals, oil or gas; or landfill, leveling, trench digging, rock removal, blasting
and similar services; or
(ii) soil stabilization; or
(iii) horizontal drilling for passage of cables or drain pipes; or
(iv) land reclamation work; or
(v) contaminated top soil stripping work; or demolition or wracking of building,
structure or road;
• IMPACT OF AMENDMENT:
Definition of “site preparation & related services” provided in the ACT.
 SECTION 2: DEFINITIONS
NEW SUB-CLAUSE (98AA) INSERTED
• PREVIOUS TEXT • INSERTED TEXT
N/A “(98AA) “training services” means the training services
provided or rendered by any person, institute or
establishment, by whatever name called, for imparting
skill or knowledge or lesson on any subject or field, with
or without issuance of a certificate, and includes the
services of vocational, professional, technical,
commercial or specialized trainings, courses, seminars,
workshops and lectures imparted for consideration but
does not include the services of coaching or training of
sports;

• IMPACT OF AMENDMENT:
Definition of “training services” provided in the ACT.
 SECTION 2: DEFINITIONS
NEW SUB-CLAUSE (100) INSERTED
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N/A “(100) “warehouses or depots for storage or cold
storages” means the facility or space provided or
rendered or let out on rent or otherwise for the storage,
cold storage or warehousing of goods including those in
the form of liquids and gases, but not including the
storage of food grains and fresh vegetables and fruits
not subjected to further processing and also not
including the storage in public bonded warehouses as
defined in clause (69);

• IMPACT OF AMENDMENT:
Definition of “warehouses and depots” provided in the ACT.
 SECTION 2: DEFINITIONS
NEW SUB-CLAUSE (101) INSERTED
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N/A (101) “waste collection, transportation, processing and
management services” means services provided in the
matters of collection, processing, transportation,
disposal, recycling and management of all kinds of
wastes, waste materials and garbage and includes
road and street cleaning services, whether manually,
mechanically or otherwise.

• IMPACT OF AMENDMENT:
Definition of “waste collection and related services” provided in the ACT.
 SECTION 13: SPECIAL PROCEDURES AND TAX WITHHOLDING PROVISIONS
NEW SUB-SECTION (3) INSERTED
• PREVIOUS TEXT • INSERTED TEXT
N/A (3) Where a person or class of persons is required to
withhold or deduct full or part of the tax on the
provision of any taxable service or class of taxable
services and either fails to withhold or deduct the tax
or, having withheld or deducted the tax, fails to deposit
the tax in the Government treasury, such person or class
of persons shall be personally liable to pay the amount
of tax and the default surcharge thereon in the
prescribed manner.”

• IMPACT OF AMENDMENT:
Liability of withholding and payment of SST will be on “Withholding agent”
 SECTION 43: OFFENCES AND PENALTIES
NEW SERIAL NUMBERS INSERTED FROM SR. NO. 2A AND 2B
• PREVIOUS TEXT • INSERTED TEXT
N/A

• IMPACT OF AMENDMENT:
New penalties imposed
 SECTION 58: PROCEDURE IN APPEAL
SUB-SECTION (4) AMENDED
• PREVIOUS TEXT
The Commissioner may stay the recovery of any
sales tax due by virtue of the decision or order
being appeal against and any such order made
by the Commissioner (Appeals) shall remain
operative for no more than fifteen days during
which period a notice shall be issued to the
respondent and after hearing the parties, the
order staying recovery may be confirmed,
varied or vacated as the Commissioner
(Appeals) deems fit but the stay order so
confirmed or varied shall remain operative for
no more than sixty days, including any period
for which the recovery may have been stayed
prior to the confirmation or variation of the stay
order.
• IMPACT OF AMENDMENT:
Commissioner (Appeals) may grant stay for one hundred and twenty days.
• SUBSTITUTED TEXT
The Commissioner may stay the recovery of the
whole or any part of the sales tax due by virtue of
the decision or order being appeal against and
any such order made by the Commissioner
(Appeals) shall remain operative for no more than
fifteen days during which period a notice shall be
issued to the respondent and after hearing the
parties, the order staying recovery may be
confirmed, varied or vacated as the Commissioner
(Appeals) deems fit but the stay order so confirmed
or varied shall remain operative for no more than
one hundred and twenty days, including any
period for which the recovery may have been
stayed prior to the confirmation or variation of the
stay order.
 SECTION 66: RECOVERY OF ARREAR OF TAX
SECOND PROVISO INSERTED TO SUB-SECTION (1)
• PREVIOUS TEXT • INSERTED TEXT
N/A Provided further that in cases where assessment of tax
has been made under section 23 or where
determination of tax not levied or short levied has
been adjudged under section 47, action for the
recovery of the tax and the default surcharge and
penalty relating thereto shall not be made under this
section for a period of thirty days from the date of the
order of such assessment or determination.”;

• IMPACT OF AMENDMENT:
Restriction of Thirty days imposed on department for recovery of tax and default surcharge.
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NEW TARIFF HEADING INSERTED
• PREVIOUS TEXT • INSERTED TEXT
N/A

• IMPACT OF AMENDMENT:
New tariff heading inserted to services.
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TARIFF HEADING SUBSTITUTED
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• IMPACT OF AMENDMENT:
Tariff headings substituted.
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TARIFF HEADING SUBSTITUTED
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• IMPACT OF AMENDMENT:
Tariff headings substituted.
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TARIFF HEADING SUBSTITUTED

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OMITTED

• IMPACT OF AMENDMENT:
Descriptions under Tariff heading 9824.0000 omitted.
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DESCRIPTION OMITTED

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OMITTED

• IMPACT OF AMENDMENT:
Descriptions under Tariff heading 9824.0000 omitted.
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NEW DESCRIPTIONS INSERTED
• PREVIOUS TEXT • INSERTED TEXT
N/A

• IMPACT OF AMENDMENT:
Descriptions under Tariff heading 9824.0000 inserted.
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• IMPACT OF AMENDMENT:
9806.6000* added vide Sindh Finance Bill 2019-20
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• AMENDMENT:
New Tariff headings inserted.
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• IMPACT OF AMENDMENT:
Tariff headings substituted.
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• IMPACT OF AMENDMENT:
9821.2000* added vide Sindh Finance Bill 2019-20
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• AMENDMENT:
New Tariff headings inserted.
TEAM TIPU ASSOCIATES