Act XLII of 2012 · 64 pages
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THE PUNJAB SALES TAX ON SERVICES ACT 2012
(Act XLII of 2012)
CONTENTS
SECTION HEADING
CHAPTER I
PRELIMINARY
1. Short title, extent and commencement.
2. Definitions.
3. Taxable service.
3A. Tax-free services.
4. Application of principles of origin and reverse charge in certain situations.
5. Amendment in Second Schedule.
6. Economic activity.
7. Value of a taxable service.
8. Open market price.
9. Provision of services over a period of time.
CHAPTER II
SCOPE OF TAX
10. Scope of tax and allied matters.
10A. Option to charge tax at standard rate.
11. Person liable to pay tax.
11A. Liability of a registered person.
12. Exemptions.
13. Effect of change in the rate of tax.
14. Special procedure and tax withholding provisions.
14A. Special procedure for collection of tax, etc.
15. Delegation of power to collect, administer and enforce tax on certain services.
16. Deduction and adjustment of tax on inputs to the business.
16A. Certain transactions not admissible.
16B. Tax credit not allowed.
16C. Extent of adjustment of input tax.
16D. Refunds.
CHAPTER III
PAYMENT AND COLLECTION OF TAX
ON TAXABLE SERVICES
17. Collection of excess tax.
18. Time, manner and mode of payment.
19. Joint and several liability of registered persons where tax unpaid.
20. Sales of taxable activity or transfer of ownership.
21. Estate of deceased person.
22. Estate in bankruptcy.
23. Liability for payment of tax in case of private companies or business enterprises.
24. Assessment of tax.
24A. Determination of minimum tax liability
CHAPTER IV
REGISTRATION
25. Registration.
2 The Punjab Laws
26. Voluntary registration.
27. Compulsory registration.
28. Suspension of registration.
29. De-registration.
29A. Restoration of registrations.
CHAPTER V
BOOK KEEPING AND AUDIT PROCEEDINGS
30. Issuance of tax invoices.
31. Records.
32. Retention and production of records and documents.
33. Audit proceedings.
34. Special audit by chartered accountants or cost accountants.
CHAPTER VI
RETURNS
35. Return.
36. Special returns.
37. Final return.
38. Return deemed to have been made.
CHAPTER VII
APPOINTMENT OF AUTHORITIES
AND THEIR POWERS
39. Appointment of authorities.
40. Powers.
41. Distribution of powers.
42. Special Judges.
43. Cognizance of offence.
44. Application of the Code of Criminal Procedure, 1898.
45. Exclusive jurisdiction of Special Judge.
46. Place of sitting.
47. Persons who may conduct prosecution.
CHAPTER VIII
OFFENCES AND PENALTIES
48. Offences and penalties.
49. Default surcharge.
50. Exemption from penalty and default surcharge.
51. Compounding of offences.
52. Recovery of tax not levied or short-levied.
53. Power to summon persons to give evidence and produce documents.
54. Power to arrest and prosecute.
55. Procedure to be followed on arrest of a person.
56. Authorized officers to have access to premises, stocks, accounts and records.
57. Obligation to produce documents and provide information.
58. Searches under warrants.
59. Posting of an officer to business premises.
59A. Power to Seal the Business Premises.
59B. Monitoring or Tracking by Electronic or other Means.
The Punjab Sales Tax on Services Act 2012 (XLII of 2012) 3
60. Powers of adjudication.
61. Revision by the Commissioner.
62. Revision by the Authority.
CHAPTER IX
APPEALS
63. Appeals.
64. Procedure in appeal.
65. Decision in appeal.
66. Appeal to the Appellate Tribunal.
67. Disposal of appeals by the Appellate Tribunal.
67A. Reference to the High Court.
68. Deposit of the tax demand while appeal is pending.
69. Alternate dispute resolution.
CHAPTER X
RECOVERY OF ARREARS
70. Recovery of arrears of tax.
CHAPTER XI
AGENTS, REPRESENTATIVES
AND E-INTERMEDIARIES
71. Agent.
72. Liability and obligations of agents.
73. Liability of the registered person for the acts of his agent.
74. Appearance by authorized representative.
75. E-intermediaries to be appointed.
CHAPTER XII
GENERAL ADMINISTRATION
76. Power to make rules.
76A. Power to restrain certain authorities.
77. Computerized system.
78. Service of orders and decisions.
79. Correction of clerical errors.
80. Issuance of duplicate of the tax documents.
81. Power to issue orders, instructions and directions.
82. Officers of the Authority to follow orders.
CHAPTER XIII
MISCELLANEOUS
83. Computation of limitation period.
84. Condonation of time-limit.
85. Bar of suits, prosecution and other legal proceedings.
86. Removal of difficulties.
87. Repeal and savings.
88. Prize schemes to promote tax culture.
89. Reward to whistleblowers.
FIRST SCHEDULE
SECOND SCHEDULE
1
THE PUNJAB SALES TAX ON SERVICES ACT 2012
(Act XLII of 2012)
[27 June 2012]
An Act to provide for the levy of a tax on services provided, rendered, initiated, received,
originated, executed or consumed in the Punjab.
Preamble.– Whereas it is expedient to provide for the levy of a tax on services provided,
rendered, initiated, originated, executed, received or consumed in the Punjab and to deal with
ancillary matters;
It is enacted as follows:-
CHAPTER I
PRELIMINARY
1. Short title, extent and commencement.– (1) This Act may be cited as the Punjab Sales
Tax on Services Act 2012.
(2) It shall extend to the whole of the Punjab.
(3) This Act shall come into force on and from such date as the Government may, by a
notification in the official Gazette, specify.
(4) Notwithstanding sub-section (3), the Government may, by notification in the official
Gazette, specify services or class or classes of services in respect of which tax shall be
collected and paid with effect from the date subsequent to and different from the date of the
commencement of this Act.
2. Definitions.– In this Act–
2
[(1) “active taxpayer” means a registered person:
(i) whose registration has not been suspended or blacklisted by the Authority; and
(ii) who has filed his tax return for at least one of the preceding three consecutive
tax periods;]
3 4
[ [(1A)] “Additional Commissioner” means a person appointed as Additional
Commissioner of the Authority;
5
[(1B)] “Appellate Tribunal” means the Appellate Tribunal established under the Punjab
Revenue Authority Act 2012 (XLIII of 2012);]
(2) “arrears”, in relation to a person, shall mean, on any day, the tax due and payable by
the person under the Act or the rules before that day but which has not yet been
paid;
(3) “Assistant Commissioner” means a person appointed as an Assistant Commissioner
of the Authority;
(4) “associates” or “associated persons” refer to–
(a) two persons, where the relationship between them is such that one may reasonably
be expected to act in accordance with the intentions of the other, or both persons
1
This Act was passed by the Punjab Assembly on 21 June 2012; assented to by the Governor of the Punjab on 26 June 2012; and, was
published in the Punjab Gazette (Extraordinary), dated 27 June 2012, pages 41901-35.
2
Inserted by the Punjab Finance Act 2021 (XIX of 2021); effective from 1st July 2021.
3
Substituted by the Punjab Finance Act 2015 (XXIX of 2015) for the following clause (1):
“(1) “Appellate Tribunal” means the Appellate Tribunal established under any law and notified by the Government as the
Appellate Tribunal for purposes of the Act;”
4
Renumbered by the Punjab Finance Act 2021 (XIX of 2021); effective from 1st July 2021.
5
Renumbered by the Punjab Finance Act 2021 (XIX of 2021); effective from 1st July 2021.
6 The Punjab Laws
may reasonably be expected to act in accordance with the intentions of a third
person but two persons shall not be associates solely by reason of the fact that one
person is an employee of the other or both persons are employees of a third
person;
(b) without prejudice to the generality of paragraph (a) and subject to paragraph (c),
the following persons shall always be treated as associates:-
(i) an individual and a relative of that individual;
(ii) members of an association of persons;
(iii) a member of an association of persons and the association, where the
member, either alone or together with an associate or associates under
another application of this section controls fifty percent or more of the rights
to income or capital of the association;
(iv) a shareholder in a company and the company, where the shareholder, either
alone or together with an associate or associates under another application of this
section, controls either directly or through one or more interposed persons–
a. fifty percent or more of the voting power in the company;
b. fifty percent or more of the rights to dividends; or
c. fifty percent or more of the rights to capital; and
(v) two companies, where a person, either alone or together with an associate or
associates under another application of this section, controls either directly or
through one or more interposed persons–
a. fifty percent or more of the voting power in both companies;
b. fifty percent or more of the rights to dividends in both companies;
c. fifty percent or more of the rights to capital in both companies; and
(c) two persons shall not be associates under sub-paragraph (i) or (ii) of paragraph (b)
where the Commissioner is satisfied that neither person may reasonably be
expected to act in accordance with the intentions of the other.
Explanation.– The expression `relative in relation to an individual‟ means–
(i) an ancestor, a descendant of any of the grandparents, or an adopted child of
the individual or of a spouse of the individual; or
(ii) a spouse of the individual or of any person specified at (i);
(5) “association of persons” includes a firm, any artificial or juridical person and body
of persons formed under a foreign law, but does not include a company;
1
(6) “Authority” means Punjab Revenue Authority established under [the Punjab
Revenue Authority Act 2012 (XLII of 2012)];
(7) “banking company” means a banking company as defined in the Banking
Companies Ordinance, 1962 (LVII of 1962) and includes any body corporate which
transacts the business of banking in the Punjab;
(8) “Commissioner” means a person appointed as Commissioner of the Authority;
(9) “Commissioner (Appeals)” means a person appointed as Commissioner (Appeals) of
the Authority;
2
[(9A) “commission" includes any consideration in whatever form, received or receivable
directly or indirectly, by a person acting on behalf of another person for services
rendered, not being professional services, in the course of buying or selling of goods
or services or in relation to any transaction relating to any asset, valuable article or
thing, not being securities;
1
Substituted for the words “any law”, by the Punjab Finance Act 2014 (XVII of 2014).
2
Inserted by the Punjab Finance Act 2018 (XXX of 2018); effective from 1st November 2018.
The Punjab Sales Tax on Services Act 2012 (XLII of 2012) 7
(9B) “commission agent” means a person who acts for consideration on behalf of another
person for sale or purchase of goods or provision or receipt of services, and includes
any person who, while acting on behalf of another person:
(a) deals with goods, services or documents of title of such goods or services;
(b) collects payment in lieu of such goods or services;
(c) guarantees for collection or payment for such goods or services; or
(d) undertakes any activity relating to sale or purchase of such goods or provision
or receipt of services.]
(10) “common taxpayer identification number” means the registration number or any
other number or identification code allocated to a registered person;
(11) “company” means–
1
(a) a company as defined in [the Companies Act, 2017 (XIX of 2017)];
(b) a body corporate formed by or under any law;
(c) a modarba and any other Islamic financial institution;
(d) a body incorporated outside Pakistan;
(e) a trust, a co-operative society or a finance society or any other society
established or constituted by or under any law; or
(f) a foreign association, whether incorporated or not, which the Authority has, by
general or special order, declared to be a company for purposes of the Act;
(12) “computerized system” means any comprehensive information technology system,
including its development, upgradation or updation, to be used by the Authority or any
other office as may be notified by the Authority, for carrying out the purposes of the
Act;
(13) “default surcharge” means the default surcharge levied under the Act;
(14) “defaulter” means a person and, in the case of company or firm, every director of the
company or partner of the firm and includes guarantors or successors, who fail to
pay the arrears of tax under the Act and the rules;
(15) “Deputy Commissioner” means a person appointed as a Deputy Commissioner of
the Authority;
(16) “document” includes any electronic data, computer programmes, computer tapes,
computer disks, micro-films or any other medium or mode for the storage or
conveyance of such data;
(17) “due date” in relation to the furnishing of a return under Chapter VI means the 15th
day of the month following the end of the tax period, or such other date as the
Authority may, by notification in the official Gazette, specify 2[and different dates
may be so specified for furnishing different parts or annexures of the return];
(18) “economic activity” shall have the meaning given to it in section 6;
(19) “e-intermediary” means a person appointed as e-intermediary under the Act;
(20) “exempt service” means a service which is exempt from the tax under section 12;
(21) “FBR” means the Federal Board of Revenue established under the Federal Board of
Revenue Act, 2007;
(22) “financial year” means the period from 1st July of a year to 30th June of the following
year;
(23) “firm” means the relation between persons who have agreed to share the profits of a
business carried on by all or any of them acting for all;
1
Substituted for the expression “the Companies Ordinance, 1984 (XLVII of 1984)”, by the Punjab Finance Act 2021 (XIX of 2021),
effective from 1st July 2021.
2
Inserted by the Punjab Finance Act 2017 (XII of 2017).
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(24) “goods” include every kind of movable property other than actionable claims,
money, stocks, shares and securities but does not include a service defined under the
Act;
(25) “Government” means Government of the Punjab;
(26) “inter-bank rate” means the Karachi inter-bank offered rate prevalent on the first day
of each quarter of a financial year;
1
[“(26A) “non-banking financial institution” includes a company licensed by the Securities
and Exchange Commission of Pakistan to carry out any one or more of the following
forms of business:
(i) investment finance services;
(ii) leasing;
(iii) housing finance services;
(iv) venture capital investment;
(v) discounting services;
(vi) investment advisory services;
(vii) asset management services; and
(viii) any other form of business which the Federal Government may, from time to
time, by notification in the official Gazette specify;]
(27) “officer of the Authority” means any officer of the Authority;
(28) “open market price” shall have the meaning as given to it in section 8;
(29) “person” means–
(a) an individual;
2
[(aa) an association of persons;]
(b) a company;
(c) Federal Government;
(d) a Provincial Government;
(e) a local authority or local government; or
(f) a foreign government, a political subdivision of a foreign government, or public
international organization;
Explanation.– The use of the word “he” in the Act shall be taken to refer to any
or all mentioned from (a) to (f) as required in the context of the relevant
provision;
(30) “place of business” means that a person–
(a) owns, rents, shares or in any other manner occupies a space in the Punjab from
where he carries on an economic activity whether wholly or partially; or
3
[(b) carries on an economic activity, wholly or partially, either through any other
person such as an agent, associate, franchise, branch, office, or otherwise in the
Punjab or through virtual presence or a website or a web portal or through any
other form of e-Commerce by whatever name called or treated;]
(31) “prescribed” means prescribed by the rules;
(32) “registration number” means the number allocated to a registered person for
purposes of the Act;
(33) “registered person” means a person who is registered or is liable to be registered
under the Act but the person liable to be registered and has not registered shall not be
1
New clause inserted by the Punjab Finance Act 2015 (XXIX of 2015).
2
Inserted by the Punjab Finance Act 2014 (XVII of 2014).
3
Substituted by the Punjab Finance Act 2017 (XII of 2017) for the following:
“(b) carries on an economic activity whether wholly or partially through any other person such as an agent, associate, franchise,
branch, office, or otherwise in the Punjab but does not include a liaison office;”.
The Punjab Sales Tax on Services Act 2012 (XLII of 2012) 9
entitled to any benefit available to a registered person under any of the provisions of
the Act or the rules;
(34) “return” means any return required to be furnished under Chapter VI of the Act;
(35) “resident” means–
(a) an individual who, in a financial year, has–
(i) a place of business, whole or part thereof, in the Punjab in any mode, style
or manner; or
(ii) his permanent address, as listed in the individual‟s national identity card,
in the Punjab; or
(iii) a permanent representative to act on his behalf or to provide service on his
behalf in the Punjab.
(b) an association of persons or a company which, in a financial year, has–
(i) its registered office in the Punjab; or
(ii) its place of business, whole or part thereof, in the Punjab in any mode,
style or manner; or
(iii) a permanent representative to act on its behalf or to provide service on its
behalf in the Punjab; or
(iv) the control or management of the affairs of the association of persons is
situated in the Punjab at any time during the financial year;
(36) “rules” means the rules made under the Act;
(37) “Schedule” means a Schedule appended to the Act;
(38) “service” or “services” means anything which is not goods or providing of which is
not a supply of goods and shall include but not limited to the services listed in First
1
[or Second] Schedule;
Explanation.– A service shall remain and continue to be treated as service
regardless whether or not rendering thereof involves any use, supply 2[, disposition]
or consumption of any goods either as an essential or as an incidental aspect of such
rendering;
(39) “short-paid” means where a registered person pays an amount of tax less than the tax
due owing to miscalculation or incorrect assessment of the tax amount due for a tax
period;
(40) “similar service” means any other service which is the same as, or closely resembles
with, the other service in character, quality, quantity, functionality, materials, or
reputation;
(41) “Special Judge” means a Special Judge appointed under section 42;
3
[(41A)“Standard Rate” means sixteen percent;]
(42) “tax” means and includes–
(a) the tax, additional tax, or default surcharge levied under the Act;
(b) a fine, penalty or fee imposed or charged under the Act; and
(c) any other sum payable or recoverable under the Act or rules;
4
[(42A) "taxpayer" means any person who, in the course of an economic activity, provides
taxable services for consideration;]
(43) “tax fraud” means knowingly, dishonestly or fraudulently and without any lawful
excuse–
(a) doing of any act or causing to do any act; or
1
Inserted by the Punjab Finance Act 2025 (LVIII of 2025), effective from 1st July 2025.
2
Inserted by the Punjab Finance Act 2014 (XVII of 2014).
3
Inserted by the Punjab Finance Act 2021 (XIX of 2021); effective from 1st July 2021.
4
New clause inserted by the Punjab Finance Act 2015 (XXIX of 2015).
10 The Punjab Laws
(b) omitting to take any action or causing the omission of any action, including
providing of taxable services without being registered under the Act; or
(c) falsifying or causing falsification of tax invoices or other tax documents or
records; or
(d) acting in contravention of the duties or obligations imposed under the Act or
rules or instructions issued thereunder –
with the intention of understating or suppressing the tax liability or underpaying
1
[or not paying] the tax liability;
(44) “tax period” means a period of one month or such other period as the Authority may,
by notification in the official Gazette, specify;
(45) “taxable service” shall have the meaning as given to it in section 3; and
(46) “value of a taxable service” shall have the meaning as given to it in section 7.
3. Taxable service.– (1) Subject to 2[section 3A, all services are taxable under this Act,
including but not limited to the services] listed in Second Schedule, which is provided by a
person from his office or place of business in the Punjab in the course of an economic
activity, including the commencement or termination of the activity.
Explanation.– This sub-section deals with services provided by a person regardless
whether such services are provided to a resident person or a non-resident person.
(2) If a service 3[, including but not limited to the services] listed in Second Schedule is
provided to a resident person by a non-resident person in the course of an economic activity,
including the commencement or termination of the activity, it shall be treated as a taxable
service.
Explanation.– This sub-section deals with services provided by a non-resident person to
a resident person whether or not the end consumers, if any, of such services are identifiable
for purposes of this Act or the rules.
(3) For purposes of sub-section (2), where a person has a registered office or place of
business in the Punjab and another outside the Punjab, the registered office or place of
business in the Punjab and that outside the Punjab shall be treated as separate legal persons.
(4) The Authority may, with prior approval of the Government, by notification in the
official Gazette, prescribe rules for determining the conditions under which a particular
service or class of service shall be considered to have been provided by a person from his
registered office or place of business in the Punjab.
(5) For purposes of this Act and the rules, providing of service shall, where the context so
requires, include rendering, supply, initiation, origination, execution, reception, consumption
or termination of a service whether in whole or in part.
4
[* * * * * * * *]
5
[3A. Tax-free services.– Notwithstanding anything contained in this Act and subject to
any condition and to the extent specified therein; all services mentioned in the First Schedule
shall be tax-free services under this Act.]
1
Inserted by the Punjab Finance Act 2014 (XVII of 2014).
2
Substituted for “such exclusion as mentioned in Second Schedule, a taxable service is a service” by the Punjab Finance Act 2025 (LVIII of
2025), effective from 1st July 2025.
3
Inserted by the Punjab Finance Act 2025 (LVIII of 2025), effective from 1st July 2025.
4
The following sub-section was inserted by the Punjab Finance Act 2015 (XXIX of 2015), and omitted by the Punjab Finance Act 2025
(LVIII of 2025), effective from 1st July 2025:
“(6) The services mentioned in the First Schedule are not exhaustive and all the services mentioned in the Second Schedule,
rules and circulars shall be taxable services.”
5
Inserted by the Punjab Finance Act 2025 (LVIII of 2025), effective from 1st July 2025.
The Punjab Sales Tax on Services Act 2012 (XLII of 2012) 11
4. Application of principles of origin and reverse charge in certain situations.– (1)
Where a person is providing taxable services in a Province other than the Punjab but the
recipient of such services is resident of the Punjab or is otherwise availing such services in
the Punjab and has charged tax accordingly, the person providing such services shall pay the
amount of tax so charged to the Government.
(2) Where the recipient of a taxable service is a person registered under the Act, he shall
deduct the whole amount of tax in respect of the service received and pay the same with the
Government.
(3) Where a person is providing taxable services in more than one Province or territory in
Pakistan including the Punjab, such person shall be liable to pay tax to the Government to the
extent the tax is charged from a person resident in the Punjab or from a person who is
otherwise availing such services in the Punjab.
(4) Where rendering of a taxable service originates from the Punjab but terminates
outside Pakistan, such person shall be required to pay tax on such service to the Government.
(5) Where a taxable service originates from outside Pakistan but is received or terminates
in the Punjab, the recipient of such service shall be liable to pay the tax to the Government.
(6) The persons who are required to pay the tax to the Government in terms of sub-
sections (1), (2), (3), (4) and (5) shall be liable to registration for purposes of this Act and the
rules.
(7) All questions or disputes relating to the application of the principle of origin given in
this section shall be resolved in terms of the already recorded understanding between the
Federal Government and the Provincial Governments on the implementation of reformed
General Sales Tax provided that pendency of any such question or dispute shall not absolve
the concerned person from his obligation to deposit the tax.
(8) The provisions of this section shall apply notwithstanding any other provision of this
Act or the rules and the Government may specify special procedure to regulate the provisions
of this section.
5. Amendment in 1[*] Schedule.– (1) The Government may, by notification in the official
Gazette, make an amendment in 2[First or] Second Schedule by modifying, adding or deleting
any entry or entries with reference to the classification, if any, description of any service or
class of services and the rate or rates of tax chargeable on any service or class of services not
exceeding the maximum rate prescribed in 3[Serial No. 1 of the Part-I of] Second Schedule.
(2) A notification issued under sub-section (1) shall be effective from such date as may be
specified in the notification but such date shall not be prior to the date on which the notification is
published in the official Gazette.
(3) The Government shall at the time of presenting the Annual Budget Statement for the
next financial year, lay before the Provincial Assembly of the Punjab all the notifications
relating to the amendments in the Second Schedule during the current financial year.
6. Economic activity.– (1) An economic activity means any activity carried on whether
continuously, regularly or otherwise by a person that involves or is intended to involve the
provision of services to another person and includes–
1
The word “Second” omitted by the Punjab Finance Act 2025 (LVIII of 2025), effective from 1st July 2025.
2
Inserted by the Punjab Finance Act 2025 (LVIII of 2025), effective from 1st July 2025.
3
Inserted by the Punjab Finance Act 2025 (LVIII of 2025), effective from 1st July 2025.
12 The Punjab Laws
(a) an activity carried on in the form of a business, including a profession, calling,
trade, or undertaking of any kind, whether or not the activity is undertaken for any
consideration or profit;
(b) the supply of movable 1[or immovable] property by way of lease, license or such
similar arrangement; and
(c) a one-time transaction or concern in the nature of a business or trade.
(2) Anything done or undertaken during the commencement or termination of an
economic activity shall be construed as part of the economic activity.
(3) An economic activity does not include–
(a) the activities of an employee providing services in that capacity to an employer; or
(b) a private recreational pursuit or hobby of an individual.
7. Value of a taxable service.– (1) The value of a taxable service is the 2[gross amount of]
consideration (by whatever name called such as charges or price) in money including all the
Federal and the Provincial duties, taxes or charges, if any, which the person providing a
service receives from the recipient of the service but does not include the amount of the tax.
(2) In case the consideration for a service is in kind or is partly in kind and partly in money,
the value of the service shall mean the open market price of the service as determined under
section 8 excluding the amount of the tax.
(3) In case the person who provides the service and the recipient of the service are
associated persons and the service is supplied for no consideration or for a consideration
which is lower than the price at which the person provides the service to other persons who
are not associated persons, the value of the service shall mean the price at which the service is
provided to such other persons but does not include the tax.
(4) In case a person provides a service for no consideration or for a consideration which
is lower than the price at which such a service is provided by such person, the value of the
service shall mean the open market price for such a service.
(5) In case of trade discounts, the value of the service shall mean the discounted price,
excluding the amount of the tax, provided the invoice shows that the discounted price and the
related tax and the discount allowed is in conformity with customary business practice.
(6) In case there is reason to believe that the value of a service has not been correctly
declared in the invoice or for any special nature of transaction it is difficult to ascertain the
value of a service, the value of the service shall be the open market price.
(7) Notwithstanding anything in sub-sections (1) to (6), where the Authority deems it
necessary, it may, by notification in the official Gazette, fix the value of any service or class
of services and for that purpose fix different values for different classes or descriptions of the
same or similar types of services but if the value at which the service is provided is higher
than the value fixed by the Authority, the value of the service shall, unless otherwise directed
by the Authority, be the value at which the service is provided.
Explanation.– For the purpose of this section, the value of the utilities or facilities, if
any, ancillary to providing of taxable services shall be included in the value of such services.
(8) The Authority may, by notification in the official Gazette, issue valuation rules for any
service or class of services for purposes of assessment or determination and payment of tax under
this Act and prescribe threshold, parameters, standards, methods, formula, criteria or bases for the
determination of value of any taxable service or class of taxable services and the assessment of
the tax on any service or class of services.
1
Inserted by the Punjab Finance Act 2018 (XXX of 2018); effective from 1st November 2018.
2
Inserted by the Punjab Finance Act 2014 (XVII of 2014).
The Punjab Sales Tax on Services Act 2012 (XLII of 2012) 13
8. Open market price.– (1) The open market price of a service is–
(a) the price, the service would fetch in an open market transaction freely entered into
between persons who are not associated persons; or
(b) if it is not possible to determine an amount under paragraph (a), the price a similar
service would fetch in an open market transaction freely made between persons who
are not associated persons, adjusted to take account of the differences between the
similar service and the actual service,
(c) determined on the basis of the market conditions prevailing at the time and place at
which the service is provided.
(2) If the open market price of a service cannot be determined under sub-section (1), it
may be determined by using any method or formula specified by the Authority for calculating
an objective approximation of the price, the service would fetch in an open market
transaction freely made between persons who are not associates.
9. Provision of services over a period of time.– (1) Where a service is provided over a
period of time and payment for the same is made on a periodic basis, the service shall be
treated as comprising two or more separate and distinct services each corresponding to the
part of the service to which each separate part of the consideration relates.
ILLUSTRATIONS
(a) Where services are provided for a two year period and payment is made on a semi-
annual basis, the provision of services for each six month period constitutes a separate
service.
(b) Where an insurance company provides an insurance policy over a five year period and
receives a premium on an annual basis, each premium relates to a separate service.
Note: The above illustrations are merely explanatory and shall not be construed as
conclusive in any manner whatsoever.
(2) This section does not apply to services for which payment is made on installments
basis.
CHAPTER II
SCOPE OF TAX
10. Scope of tax and allied matters.– (1) Subject to the provisions of this Act and the rules,
there shall be charged, levied, collected and paid the tax on the value of a taxable service at
the rate or rates specified in the Second Schedule.
(2) The Government may, on the recommendation of the Authority and subject to such
conditions and restrictions as the Government may impose, by notification in the official
Gazette, declare that in respect of any taxable service provided by a registered person or a class
of registered persons, the tax shall be charged, levied and collected at such higher, lower, fixed
or specific rate or rates as may be specified in the said notification.
(3) Notwithstanding other provisions of this Act, the Authority may, with the prior approval
of the Government and by notification in the official Gazette and subject to the conditions,
restrictions, limitations or otherwise, fix the limit or threshold of annual turnover of any service or
class of services provided by any person or class of persons below which such person or class of
persons shall be exempt from payment of tax under the Act.
14 The Punjab Laws
1
[(4) * * * * * * * * * *
(5)* * * * * * * * * * *]
2
[10A. Option to charge tax at standard rate.─ (1) Where any service or class of services
is chargeable at a reduced rate under 3[Part-III of] the Second Schedule, any person or class
of persons providing such service or services may, with the permission of the Authority, opt
to charge sales tax at the standard rate subject to such conditions, restrictions and limitations
as may be specified by the Authority.
(2) The permission granted under subsection (1) shall be irrevocable except with the
permission of the Authority.
(3) Where the Authority has reasons to believe that the taxpayer has misused the option,
the Authority may withdraw the permission granted under subsection (1) at any time after
affording an opportunity of being heard.]
11. Person liable to pay tax.– (1) Where a service is taxable by virtue of sub-section (1) of
section 3, the liability to pay the tax shall be on the registered person providing the service.
(2) Where a service is taxable by virtue of sub-section (2) of section 3, the liability to pay
the tax shall be on the person receiving the service.
(3) The Authority may, by notification in the official Gazette, specify the service or
services in respect of which the liability to pay tax shall be on any person, other than the
person providing the taxable service, or the person receiving the taxable service.
(4) Nothing contained in this section shall prevent the collection of tax from a different
person if that person is made separately or jointly or severally liable for the tax under section
19.
4
[11A. Liability of a registered person.– Subject to the provisions of subsection (1) of
section 11, where a registered person receiving the taxable service fails to make payment of
the tax to a service provider within one hundred and eighty days from the date of the tax
invoice and such service provider has also not made the payment thereof within the
prescribed due date, the person providing and the person receiving taxable service shall,
jointly and severally, be liable for payment of such tax.
Explanation I: The tax shall include the total amount of the tax and also the tax as was liable
to be withheld or deducted by service recipient as notified under section 14 of the Act.
Explanation II: The registered person shall include a person covered by the “withholding
agent” as notified under section 14 of the Act.]
12. Exemptions.– (1) Notwithstanding the provisions of sections 3 and 10, the Authority
may, with the approval of the Government and subject to such conditions, limitations or
restrictions as it may impose, by notification in the official Gazette, exempt–
1
The following subsections (4) and (5) omitted by the Punjab Finance Act 2016 (XXXV of 2016):
“(4) A person required to pay tax under this Act shall be entitled to deduct from the payable amount, the amount of tax already
paid by him on the receipt of taxable services used exclusively in connection with taxable services provided by such person
subject to the condition that he holds a true and valid tax invoice not older than six tax periods, showing the amount of tax earlier
charged and paid under the Act on the services so received but the Authority may, by notification in the official Gazette,
disallow or restrict such deduction in case of any service or services as it may deem appropriate.
(5) For purposes of subsection (4), the amount of tax entitled to be deducted shall not include any amount of additional tax,
default surcharge, fine, penalty or fee imposed or charged under the Act.”
2
New section inserted by the Punjab Finance Act 2021 (XIX of 2021), effective from 1st July 2021.
3
Inserted by the Punjab Finance Act 2025 (LVIII of 2025), effective from 1st July 2025.
4
Inserted New Section 11A by the Punjab Finance Act 2017 (XII of 2017).
The Punjab Sales Tax on Services Act 2012 (XLII of 2012) 15
(a) taxable service or services from the whole or any part of the tax;
(b) taxable service or services provided by a person or class of persons from the whole or
any part of the tax;
(c) recipient or recipients of service or services, including international organizations and
institutions, from the payment of the whole or any part of the tax; and
(d) a class of persons, any area or areas of the Punjab from the whole or any part of the
tax.
(2) The exemption under sub-section (1) may be allowed from any previous date
specified in the notification issued under sub-section (1).
13. Effect of change in the rate of tax.– If there is a change in the rate of tax, the taxable
services shall be charged to tax at such rate as is in force at the time the service is provided.
14. Special procedure and tax withholding provisions.– (1) Notwithstanding anything
contained in this Act, the Authority may, by notification in the official Gazette, prescribe a
special procedure for the payment of tax, registration, book keeping, invoicing or billing
requirements, returns and other related matters in respect of any service or class of services,
as may be specified.
(2) Notwithstanding other provisions of this Act, the Authority may require any person or
class of persons whether registered or not for the purpose of this Act to withhold full or part
of the tax charged from such person or class of persons on the provision of any taxable
service or class of taxable services and to deposit the tax so withheld, with the Government
within such time and in such manner as it may, by notification in the official Gazette, specify.
1
[Explanation: The word “charged” used in this subsection means and includes the tax
liable to be charged under this Act or the rules made thereunder.]
2
[(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 to the Government in the prescribed manner.]
3
[14A. Special procedure for collection of tax, etc.– (1) Notwithstanding anything
contained in this Act, the Authority may require any other person or class of persons, not
necessarily being a service provider or a service recipient in a particular transaction, to collect
full or part of the tax charged from another person or class of persons on the provision of any
taxable service or class of taxable services and to deposit the tax so collected, in the
Government treasury within such time and in such manner as the Authority may, by
notification in the official Gazette, specify.
(2) For purposes of subsection (1), the special procedure prescribed for collection and
payment of tax may also provide for registration, book keeping, invoicing or billing
requirements, returns and other related matters in respect of any service or class of services,
as may be specified.
(3) Where a person or class of persons is required to collect full or part of the tax on the
provision of any taxable service or class of taxable services and either fails to collect the tax
or having collected the tax, fails to deposit the tax in the Government treasury, such person or
1
Added by the Punjab Finance Act 2019 (XV of 2019).
2
New subsection inserted by the Punjab Finance Act 2016 (XXXV of 2016).
3
Inserted by the Punjab Finance Act, 2017 (XII of 2017).
16 The Punjab Laws
class of persons shall be personally liable to pay the amount of tax to the Government in the
prescribed manner.]
15. Delegation of power to collect, administer and enforce tax on certain services.– (1) The
Government may, in accordance with Article 147 of the Constitution of the Islamic Republic of
Pakistan, authorize the Federal Board of Revenue or any other Federal agency or person to
administer, collect and enforce the levy of tax on such taxable services as it may notify and in
such mode and manner and for such period as may be prescribed and subject to such limitations,
restrictions and conditions as it may deem appropriate.
(2) The Government may, by notification in the official Gazette, authorize any Provincial
agency, department, organization or person to administer, collect and enforce the levy of tax
on such taxable services as it may notify in such mode and manner and for such period as it
may prescribe and subject to such restrictions and conditions as it may impose.
(3) At the end of the period prescribed under sub-section (1), the tax on taxable services
notified under sub-section (1) shall be administered, collected and enforced by the Authority
in the same mode and manner as all other taxable services.
1
[16. Deduction and adjustment of tax on inputs to the business.– (1) A person required to
pay tax under this Act shall be entitled to deduct from the payable amount, the amount of tax
payable or already paid by him on the receipt of taxable services exclusively used in
connection with the taxable services he provides, subject to the condition that he holds a true
and valid tax invoice not older than six tax periods, showing the amount of tax charged under
the Act on the services so received, but the Authority may disallow or subject to additional
conditions may restrict such deduction in cases or with respect to taxable services or goods
specified in section 16A or section 16B or the rules.
2
[(2) Subject to provisions of section 16A or section 16B or to such conditions and
restrictions as may be prescribed, the Authority may allow a registered person to claim
adjustment, deduction, or refund in respect of the tax paid or payable under any other law in
for any taxable service or goods or class of taxable service or goods used in connection with
the provision of a taxable service by such person, 3[if he holds a valid tax invoice or
declaration of import of goods not older than six tax periods bearing his name and National
Tax Number].]
(3) For purposes of subsection (2), the Authority may adopt the principles or concepts
laid down in such other law in respect of adjustments, deductions or refunds including zero-
rating principle.
1
Substituted by the Punjab Finance Act 2016 (XXXV of 2016) for the following section 16:
“16. Adjustments.– (1) The Authority may, subject to such conditions and restrictions as it may specify, allow registered persons to
claim adjustments or deductions, including refunds arising as a result thereof, in respect of the tax paid under any other law on any
account in respect of any taxable service or goods or class of taxable services or goods provided by them.
(2) For purposes of sub-section (1), the Authority may adopt the principles or concepts laid down in such other law in respect
of adjustments, deductions or refunds including zero-rating principle.
(3) For the purpose of removal of any doubt it is clarified that no adjustment or deduction of any tax payable under any other
law shall be claimed by any person except in the manner and to the extent specified in the notification issued under sub-section
(1).”
2
Substituted by the Punjab Finance Act, 2017 (XII of 2017) for the following:
“(2) The Authority may, subject to section 16A or section 16B or to such conditions and restrictions as may be prescribed,
allow registered persons to claim adjustments or deductions, including refunds arising as a result thereof, in respect of the tax
paid or payable under any other law in respect of any taxable service or goods or class of taxable services or goods used in
connection with the taxable services such persons provide.”
3
Substituted for the words “on his furnishing a tax invoice or declaration of import of goods in his name which bears his National Tax
Number” by the Punjab Finance Act 2020 (VIII of 2020), effective from 1st July 2020.
The Punjab Sales Tax on Services Act 2012 (XLII of 2012) 17
1
[(4) Notwithstanding anything contained in this Act or the rules made thereunder, the
Authority, with the approval of the Government, may, by notification in the official Gazette
and subject to such conditions, limitations or restrictions as may be specified therein, allow a
registered person or class of persons to deduct such amount of input tax from the output tax
as may be specified in the notification.]]
2
[(5) For purposes of subsection (1) or subsection (2), the amount of tax to be deducted
or adjusted shall not include any amount of additional tax, further tax, extra tax, default
surcharge, fine, penalty or fee imposed or charged under this Act or any other law.]
3
[16A. Certain transactions not admissible.– (1) Notwithstanding anything contained in
this Act or any other law for the time being in force, 4[payment of amounts of one or more
transactions made to the same person in one tax period where the aggregate of such amounts
exceeds fifty thousand rupees including the amount of sales tax but excluding any payments
made on account of utilities], 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 recipient and the service
provider.
(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. Tax credit not allowed.– (1) Notwithstanding anything contained in this Act or the
rules, a registered person shall not be entitled to claim input tax adjustment in respect of:
(a) capital goods (plant, machinery, equipment and others) not exclusively useable or
used in providing taxable services;
(b) 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
1
Substituted by the Punjab Finance Act, 2017 (XII of 2017) for the following:
“(4) For purposes of subsections (1) and (2), the amount of tax to be deducted or adjusted shall not include any amount of
additional tax, default surcharge, fine, penalty or fee imposed or charged under this Act or any other law.”
2
Inserted by the Punjab Finance Act, 2017 (XII of 2017).
3
New sections 16A and 16B inserted by the Punjab Finance Act 2016 (XXXV of 2016).
4
Substituted for the words “payment of the tax amount for a transaction exceeding value of fifty thousand rupees” by the Punjab Finance
Act 2022 (IX of 2022), effective from 1st July 2022.
18 The Punjab Laws
the input related goods and services were purchased or acquired before such
commencement;
(c) utility bills not in the name of registered person with reference to his registered
premises unless evidence of consumption is produced in the matter of such
claims;
(d) the tax claimed as input tax on services where such tax amount has not been
deposited by the supplier or the service provider or where the evidence of such
payment is not produced;
(e) carry forward of the input tax adjustment relating to the period prior to the
commencement of the Act;
(f) goods and services received against false, fake, forged, flying, untrue, unreal or
unrelated invoices or against purchases from the persons black listed or suspended
by the Authority or by the Federal Board of Revenue or by any other Provincial
authority;
(g) goods and services liable to a tax rate lesser than 1[fifteen] per cent 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 2[fifteen] per cent of the charges or to a specific rate of tax not based on value;
(i) vehicles including three and two wheelers;
(j) food, beverages, garments, fabrics or others and consumption on entertainment,
amusement, recreation or enjoyment;
(k) gift and giveaway;
(l) goods or services used or to be used for any purpose other than for taxable
supplies made or to be made by him;
(m) goods and services acquired for personal or non-business consumption;
3
[(n) goods and services not related to the taxable supplies made or services rendered
by the registered person;]
4
[(nn) tax free services including rendering and consumption of goods or services;]
(o) goods and services in respect of which input tax adjustment is barred under the
respective federal and provincial sales tax law;
(p) sales tax paid to the Federal Government or any other Provincial Government for
supply of goods or provision of services, if the sales tax law of the Federation or
the Province concerned does not allow adjustment of tax paid under this Act;
(q) from the date to be notified by the Authority, such goods and services which, at
the time of filing of return by the buyer, have not been declared by the supplier in
his return;
(r) further tax, extra tax and value addition tax levied under the Sales Tax Act, 1990,
and the rules or notifications issued thereunder;
5
[(rr) amount of sales tax paid on:
(i) telecommunication services in excess of nineteen and a half percent ad
valorem;
(ii) carriage of goods by rail or road in excess of fifteen percent ad valorem; and
1
Substituted for the word “sixteen” by the Punjab Finance Act 2019 (XV of 2019).
2
Substituted for the word “sixteen” by the Punjab Finance Act 2019 (XV of 2019).
3
Substituted by the Punjab Finance Act 2019 (XV of 2019) for the following:
“(n) goods and services not related to the taxable supplies made by the registered person;”
4
Inserted by the Punjab Finance Act 2025 (LVIII of 2025), effective from 1st July 2025.
5
Inserted by the Punjab Finance Act 2025 (LVIII of 2025), effective from 1st July 2025.
The Punjab Sales Tax on Services Act 2012 (XLII of 2012) 19
(iii) other services in excess of sixteen percent ad valorem;]
(s) goods used in, or permanently attached to, immoveable property, such as building
and construction material, paints, electrical and sanitary fittings, pipes, wires,
cables, glass products and furniture, furnishings, office equipment, excluding
those directly used in the economic activity of registered persons paying sales tax
at a rate of not less than sixteen per cent; and
(t) such goods or services as are notified or specified by the Authority to be
inadmissible for input tax adjustment.
(2) No person other than a registered person shall make any deduction or reclaim input
tax in respect of taxable services made or to be made by him.
(3) Notwithstanding anything contained in any other law for the time being in force or
any decision of any court, for purposes of this section, no input tax credit shall be allowed to
the persons who paid fixed tax under any provisions of this Act or under the respective
federal or provincial sales tax law.]
1
[16C. Extent of adjustment of input tax.– (1) Notwithstanding anything contained in this
Act, a registered person shall not be allowed to adjust input tax in a tax period in excess of
2
[ninety] percent of the output tax for that tax period.
(2) The Authority may by notification in the official Gazette exclude any person or class of
persons from the purview of sub section (1).]
3
[16D. Refunds.- Notwithstanding anything contained in this Act and subject to the
conditions and restrictions as may be prescribed, the Authority or any officer authorized by
the Authority, may allow a registered person refund of the tax claimed to have been paid
through inadvertence, error or misconstruction.]
CHAPTER III
PAYMENT AND COLLECTION OF TAX ON TAXABLE SERVICES
17. Collection of excess tax.– (1) Any person who has collected or collects the tax or charge,
whether under misapprehension of any provision of this Act or otherwise, which was not
payable as tax or charge or which was in excess of the tax or charge actually payable and the
incidence of which had been passed on to the person to whom the service was provided, shall
pay the amount of tax or charge so collected to the Government.
(2) Any amount payable to the Government under sub-section (1) shall be deemed to be
an arrear payable under the Act and shall be recovered accordingly.
(3) The burden of proof that the incidence of tax or charge referred to in sub-section (1)
has been or has not been passed to the person to whom the service is provided shall be on the
person collecting the tax or charge.
18. Time, manner and mode of payment.– 4[(1) Notwithstanding anything to the contrary
contained in this Act or any other law for the time being in force, tax in respect of a taxable
1
Inserted by the Punjab Finance Act, 2017 (XII of 2017), and substituted by the Punjab Finance Act 2020 (VIII of 2020), for the following,
effective from 1st July 2020:
“16C. Adjustment of input tax paid on certain goods and services.- Notwithstanding anything contained in this Act, the input
tax paid on 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 of the Customs Act, 1969 (IV of 1969) shall be adjustable against the output tax in twelve equal
monthly instalments.”
2
Substituted for the word “eighty” by the Punjab Finance Act 2022 (IX of 2022), effective from 1st July 2022.
3
Inserted by the Punjab Finance Act 2020 (VIII of 2020), effective from 1st July 2020.
4
Substituted for the following by the Punjab Finance Act 2018 (XXX of 2018); effective from 1st November 2018:
20 The Punjab Laws
service provided during a tax period shall be paid by a person at the time of filing the return
in respect of that period under Chapter VI.]
(2) For purposes of sub-section (1), a taxable service shall be considered to have been
provided in the tax period during which–
(a) it was provided to the recipient;
(b) an invoice for the value of the taxable service was issued or was due to be issued or
sent or due to be sent to the recipient; or
(c) consideration for the same was received–,
whichever is earlier.
(3) Notwithstanding anything contained in sub-section (1), the Authority may, by a
notification in the official Gazette, direct that the tax in respect of any taxable service or such
class of taxable services shall be charged, collected and paid in any other way, mode, manner
or time as may be specified in the notification.
(4) The tax due on taxable services shall be paid by any of the following modes:-
(a) through deposit in a bank designated by the Authority; or
(b) through such other mode and manner as may be specified by the Authority.
19. Joint and several liability of registered persons where tax unpaid.– (1) Where a
registered person receiving a taxable service from another registered person is in the
knowledge of or has reasonable grounds to suspect that some or all of the tax payable in
respect of that taxable service provided would go unpaid as against the requirements of this
Act, such person as well as the person providing the taxable service shall be jointly and
severally liable for payment of such unpaid amount of the tax.
(2) The Authority may, by notification in the official Gazette, exempt any person, service
or transaction or class of persons, services or transactions from the provision of sub-section
(1).
20. Sales of taxable activity or transfer of ownership.– (1) Where the ownership of any
business providing taxable services is sold, transferred or otherwise disposed of as an
ongoing concern or activity, the fact of such sale, transfer or other disposition shall be
intimated to the Commissioner within one month of the occurrence of such fact by the former
owner.
(2) The tax chargeable on the taxable services provided in the business referred to in sub-
section (1) shall be accounted for and paid by the person to whom sale or other disposition of
such business is made or ownership thereof is transferred and every such person shall be
liable to registration under this Act.
21. Estate of deceased person.– The tax liability of a deceased registered person under this
Act shall be the first charge on his estate in the hands of his successors.
22. Estate in bankruptcy.– (1) Where a registered person is declared bankrupt, the tax
liability under this Act shall pass on to the estate in bankruptcy if it continues to operate the
business.
(2) Where the tax liability is incurred by an estate in bankruptcy, the tax shall be deemed
to be a current expenditure in the operations of the estate in bankruptcy and shall be paid
before the claims of all other creditors are settled.
“(1) The tax in respect of a taxable service provided during a tax period shall be paid by a person at the time of filing the return
in respect of that period under Chapter VI.”
The Punjab Sales Tax on Services Act 2012 (XLII of 2012) 21
23. Liability for payment of tax in case of private companies or business enterprises.–
Where any private company or business enterprise is wound up and any tax chargeable on or
payable by the company or business enterprise, whether before, or in the course, or after its
liquidation, in respect of any tax period cannot be recovered from the company or business
enterprise, every person who was an owner of, or partner in, or director of the company or
business enterprise during the relevant period shall, jointly and severally with such persons be
liable for payment of such tax.
24. Assessment of tax.– (1) Where on the basis of any information acquired during an audit,
inquiry, inspection or otherwise, an officer of the Authority is of the opinion that a registered
person has not paid the tax due on taxable services provided by him or has made short payment,
the officer shall make an assessment of the tax actually payable by that person and shall impose a
penalty and charge default surcharge in accordance with sections 48 and 49.
(2) No order under sub-section (1) shall be made unless a notice to show cause is given to
the person in default within 1[eight] years from the conclusion of the tax period to which the
assessment relates 2[for tax periods ending before 1st of July 2022, and within five years from
the end of the financial year in which the tax period to which the assessment relates falls for
tax periods ending on or after 1st July 2022] specifying the grounds on which it is intended to
proceed against him and the said officer shall take into consideration the representation made
by such person and provide him with an opportunity of being heard if the person so desires.
3
[(3) An order under subsection (1) shall be made within one year from the end of the
financial year in which the show cause notice is issued.]
(4) In computing the period specified in sub-section (3), any period during which the
proceedings are adjourned on account of a stay order or proceedings under section 69 4[* * *
* * ** ] shall be excluded.
(5) An order passed by an officer under sub-section (1) may be further amended as may
be necessary when on the basis of any additional information acquired during an audit,
inquiry, inspection or otherwise, the officer is satisfied that–
(a) any tax has been under-assessed or assessed at a low rate; or
(b) any taxable service provided by the person has escaped assessment.
(6) The provisions of sub-sections (2), (3) and (4) shall be applicable to an order passed
under sub-section (5).
5
[24A. Determination of minimum tax liability.– 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.]
CHAPTER IV
REGISTRATION
1
Substituted for the word “five” by the Punjab Finance Act 2017 (XII of 2017).
2
Inserted by the Punjab Finance Act 2022 (IX of 2022), effective from 1st July 2022.
3
Substituted by the Punjab Finance Act 2022 (IX of 2022) , effective from 1st July 2022, for the following:
“(3) An order under sub-section (1) shall be made within one hundred and twenty days of issuance of the show cause notice or
within such extended period as the officer may, for reasons to be recorded in writing, fix provided that such extended period shall
ordinarily not exceed sixty days.”
4
The words “or the time taken through adjournments by the person” omitted by the Punjab Finance Act 2022 (IX of 2022) , effective from
st
1 July 2022.
5
Inserted by the Punjab Finance Act 2019 (XV of 2019).
22 The Punjab Laws
25. Registration.– (1) A person shall register under this Act, who–
(a) provides any taxable service from his office or place of business in the Punjab; or
(b) is otherwise required to be registered under any of the provisions of the Act or the
rules; or
(c) fulfills any other criteria or requirements which the Authority may prescribe under
sub-section (2).
(2) The registration under this section will be regulated in such manner and subject to
such conditions and restrictions as the Authority may, by notification in the official Gazette,
prescribe.
(3) A person who receives a service, which is a taxable service by virtue of sub-section (2) of
section 3, and is not a registered person shall be deemed to be a registered person for the purposes
of the tax period in which–
(a) such person receives the service;
(b) an invoice for the value of the service is issued or sent to or received by the
person; or
(c) consideration for the service is paid by the person –
whichever is earlier and all the provisions of this Act and the rules shall be applicable
to such person for that particular tax period and any matters relating to, arising out of,
or concerning that tax period as if that person had provided the service.
(4) The Authority may publish on its website a list of persons registered under this Act.
(5) It shall be reasonable for a person to believe that another person is registered under
this Act if that other person is on the list placed on the website of the Authority.
1
[Explanation.– Unless otherwise specified, no person shall be absolved of any tax liability
for want of registration under this Act or the rules.]
26. Voluntary registration.– (1) A person who carries on an economic activity but is not
required to be registered may apply for voluntary registration at any time.
(2) If a person who is not required to be registered applies for voluntary registration, the
Authority may register the person if the Authority is satisfied that–
(a) the person is providing, or shall provide a service that is taxable service if the
person was registered;
(b) the person has a place of business at which he carries on an economic activity;
(c) there are reasonable grounds to believe that the person shall keep proper records
and file regular returns as prescribed under this Act and the rules; and
(d) if the person has commenced carrying on an economic activity, the person has–
(i) kept proper records in relation to his economic activity; and
(ii) complied with his obligations under other applicable taxation laws.
27. Compulsory registration.– (1) If the 2[Commissioner] is satisfied that a person who is
required to be registered and has not applied for registration, the 3[Commissioner] shall
register the person and shall, not later than fifteen days before the day on which the
registration takes effect, notify the person of the registration, the day on which it takes effect,
and the registration number issued to the person.
(2) No person shall be registered compulsorily without being given an advance notice and
an opportunity of being heard in such manner as the 4[Commissioner] may specify.
1
Inserted by the Punjab Finance Act 2014 (XVII of 2014).
2
Substituted for the word “Authority” by the Punjab Finance Act 2018 (XXX of 2018); effective from 1st November 2018.
3
Substituted for the word “Authority” by the Punjab Finance Act 2018 (XXX of 2018); effective from 1st November 2018.
4
Substituted for the word “Authority” by the Punjab Finance Act 2018 (XXX of 2018); effective from 1st November 2018.
The Punjab Sales Tax on Services Act 2012 (XLII of 2012) 23
1
[(3) 2[The Commissioner may, by an order in writing], authorize any other officer to
perform any of the functions under this section relating to compulsory registration of a person
for any of the taxable services.]
28. Suspension of registration.– (1) Subject to sub-section (3), the Authority may
temporarily inactivate the registration of a person if it is satisfied that the person–
(a) is not entitled to be registered; or
(b) has failed to comply with obligations under this Act or the rules.
(2) The Authority shall give notice to a registered person stating the reasons for
temporary inactivation of the person‟s registration and the remedial actions required to be
taken by the person in such time as may be specified in the notice.
(3) In case the Authority is not satisfied with the response of the person or the remedial
action taken by him or does not receive any response in the specified time, the Authority may
suspend that person‟s registration.
(4) The suspension of registration shall be effected by removing the name of the person
from the list of registered persons published on the Authority‟s website.
(5) At any time within a period of sixty days of suspension, the Authority may withdraw
the suspension if it is satisfied with the remedial actions taken by the person.
(6) Where, after sixty days, the suspension has not been withdrawn, the Authority may–
(a) institute proceedings against the person in respect of the alleged non-compliance
under this Act;
(b) reinstate the person‟s registration; or
(c) if neither of the actions in clauses (a) and (b) is done, cancel the person‟s
registration.
(7) No registration shall be cancelled unless the Authority either through enquiry,
investigation or audit is satisfied that circumstances exist necessitating such cancellation and
under no circumstances, the cancellation of registration shall absolve the person of his other
obligations and liabilities under the Act or the rules.
29. De-registration.– (1) The 3[Commissioner] may de-register a registered person or such
class of registered persons not required to be registered under this Act.
(2) Where any person registered under this Act believes that he does not satisfy the
requirements for registration specified in section 25, he may make an application to the
4
[Commissioner] to be de-registered.
(3) If upon receiving such an application, the 5[Commissioner] is satisfied that the person
is not required to be registered under this Act and has fulfilled the obligations under the Act,
it shall de-register such person.
(4) Where the 6[Commissioner] receives an application under sub-section (2), it shall
dispose of the application within a period of three months from the date of the receipt of the
1
Substituted for the following by the Punjab Finance Act 2018 (XXX of 2018); effective from 1st November 2018:
“(3) The Authority may, by notification in the official Gazette, authorize any officer to perform any of the functions under this
section relating to compulsory registration of a person for any of the taxable services.”
2
Substituted for words “The Authority may, by notification in the official Gazette” by the Punjab Finance Act 2022 (IX of 2022) , effective
from 1st July 2022.
3
Substituted for word “Authority” by the Punjab Finance Act 2020 (VIII of 2020), effective from 1st July 2020.
4
Substituted for word “Authority” by the Punjab Finance Act 2020 (VIII of 2020), effective from 1st July 2020.
5
Substituted for word “Authority” by the Punjab Finance Act 2020 (VIII of 2020), effective from 1st July 2020.
6
Substituted for word “Authority” by the Punjab Finance Act 2020 (VIII of 2020), effective from 1st July 2020.
24 The Punjab Laws
application, or within such extended period, not exceeding sixty days, as the 1[Commissioner]
may, for reasons to be recorded in writing, fix.
2
[29A. Restoration of registrations.– The Authority may, subject to conditions as may be
prescribed, reactivate, revive, reinstate or restore any registration which has been de-
activated, suspended or cancelled for any reason or under any circumstances.]
CHAPTER V
BOOK KEEPING AND AUDIT PROCEEDINGS
30. Issuance of tax invoices.– (1) A registered person providing a taxable service shall issue
a numbered and dated tax invoice containing the following particulars:-
(a) name, address and registration number of the service provider;
(b) name, address and registration number, if any, of the service recipient;
(c) description of service or services;
(d) value exclusive of the tax;
(e) amount of the tax; and
(f) value inclusive of the tax.
3
[(2) The Authority may, by notification in the official Gazette, specify a format of
invoices to be issued by a registered person or a class of registered persons and prescribe a
procedure for authentication of such invoices.
(3) The Authority or an officer authorized by the Authority in this behalf, may require a
registered person or a class of registered persons to issue invoices electronically in such
manner as may be prescribed, and to transmit such invoices to the Authority, subject to such
conditions and restrictions as the Authority may specify by notification in the official
Gazette.]
31. Records.– (1) A registered person providing taxable service 4[or a person required to pay
tax under this Act or rules] shall maintain and keep at his business premises or registered
office in English or Urdu the following records of taxable service (including 5[exempt or tax
free services]) provided by him or by his agent acting on his behalf in such form and manner
as would permit ready ascertainment of his tax liability during a tax period–
6
[(a) record of services provided, including 7[exempt or tax free services],
indicating the description, quantity and value of service, name, registration
1
Substituted for word “Authority” by the Punjab Finance Act 2020 (VIII of 2020), effective from 1st July 2020.
2
Inserted by the Punjab Finance Act 2014 (XVII of 2014).
3
Substituted by the Punjab Finance Act 2020 (VIII of 2020), for the following, effective from 1st July 2020:
“(2) The Authority may, by notification in the official Gazette, specify such modified invoices for different services or persons
and prescribe the manner and procedure for regulating the issuance and authentication of tax invoices.
(3) A registered person providing a taxable service may, subject to such conditions and restrictions as the Authority may, by
notification in the official Gazette, specify, issue invoices to another registered person or other recipient of taxable service electronically
and transmit images or statements of such invoices to the Authority as well as to the Commissioner, as may be specified.”
4
Inserted by the Punjab Finance Act 2014 (XVII of 2014).
5
Substituted for the words “exempt service” by the Punjab Finance Act 2025 (LVIII of 2025), effective from 1st July 2025.
6
Substituted by the Punjab Finance Act 2020 (VIII of 2020), for the following, effective from 1st July 2020:
“(a) records of taxable service provided indicating–
(i) the description and type of service;
(ii) the value of the service;
(iii) the particulars of the person to whom the service was provided; and
(iv) any other information as may be specified by the Authority;
(b) records of exempt service; and
(c) such other records as may be specified by the Authority.”
7
Substituted for the words “exempt service” by the Punjab Finance Act 2025 (LVIII of 2025), effective from 1st July 2025.
The Punjab Sales Tax on Services Act 2012 (XLII of 2012) 25
number and address of the person to whom services were rendered and the
amount of tax charged;
(b) record of goods and 1[exempt or tax free services] received, including exempt
goods and services, indicating description, quantity and value of goods and
services, name, address and registration number of the service provider or
supplier of goods and the amount of the tax charged;
(c) record of goods imported indicating the description, quantity and value of
goods and the amount of tax paid on imports;
(d) double entry accounts;
(e) bank statements and banking instruments;
(f) inventory records, utility bills, salary and labor bills, rent deeds and
agreements;
(g) record required to be maintained and the declarations filed under any other law
for the time being in force; and
(h) such other record as may be specified by the Authority.]
(2) The Authority may, by notification in the official Gazette, require a registered person
or class of registered persons to declare and use as many number of business bank accounts
as may be specified by the Authority in such notification to make or receive payments on
account of providing 2[or receiving] services for the purpose of this Act and the rules and to
make payment of due tax from such accounts.
(3) The Authority may, by notification in the official Gazette, specify that any person or
class of persons registered under this Act shall use such electronic fiscal cash registers in
such manner as are approved by the Authority.
(4) The Authority may, by notification in the official Gazette, prescribe the procedure or
software for electronic invoicing or billing, maintenance of records, filing of tax returns and
for any other matter or approve any software for electronic invoicing or billing, maintenance
of records and filing of returns by a registered person or class of such persons under this Act.
(5) The registered persons, whose accounts are subject to audit under the 3[Companies
Act, 2017 (XIX of 2017)], shall be required to submit a copy of the annual audited accounts,
along with a certificate by the auditors certifying the payment of the tax due and any
deficiency in the tax paid by the registered person.
32. Retention and production of records and documents.– (1) A person, who is required to
maintain any record or documents under this Act, shall retain the record and documents for a
period of 4[eight] years after the end of the tax period to which such record or documents
relate 5[for tax periods before July 2022, and six years from the end of the financial year to
which such record or documents relate for tax periods after 1st July 2022] or till the final
decision in any proceedings including proceedings for assessment, appeal, revision, reference
or petition, whichever is later.
(2) A person who is required to maintain any record or documents under this Act or any
other law shall, as and when required by an officer not below the rank of the Assistant
Commissioner, produce records or documents which are in his possession or control or in the
possession or control of his agent, and where such records or documents have been stored as
1
Substituted for the words “services” by the Punjab Finance Act 2025 (LVIII of 2025), effective from 1st July 2025.
2
Inserted by the Punjab Finance Act 2014 (XVII of 2014).
3
Substituted for the expression “Companies Ordinance, 1984 (XLVII of 1984)” by the Punjab Finance Act 2018 (XXX of 2018); effective
from 1st November 2018.
4
Substituted for the word “six” by the Punjab Finance Act 2018 (XXX of 2018); effective from 1st November 2018.
5
Inserted by the Punjab Finance Act 2022 (IX of 2022), effective from 1st July 2022.
26 The Punjab Laws
electronic data, he shall allow to such officer full and free access to, and use of, such data of
any machine.
33. Audit proceedings.– (1) An officer authorized by the Authority or the Commissioner
may, on the basis of the return or returns submitted by a registered person or the records
maintained 1[or obtained] under this Act and the rules, conduct an audit of such person.
(2) In case the Authority or the Commissioner has any information showing that any
registered person is involved in tax fraud or evasion of tax, it or as the case may be, he may
authorize an officer not below the rank of the Assistant Commissioner, to conduct an inquiry or
investigation, which may or may not be in addition to any audit carried out for the same period.
(3) Where the officer is to conduct an audit under sub-section (1), he shall issue a notice
of audit to the person informing him of the audit proceedings and direct him to produce any
records or documents which such officer may require for conducting the audit.
2
[(3a) The officer authorized under subsection (1) may conduct audit proceedings
electronically through video links or any other facility as may be notified by the Authority.]
(4) The officer shall conduct audit and issue an audit observation or observations pointing
out the contraventions of this Act or the rules and the amount of the tax evaded or short paid,
and the registered person may, within a period of twenty one days of the receipt of the audit
observation, submit his reply in writing.
(5) If no reply is received within the specified time or the reply furnished by the
registered person is found unsatisfactory, the officer shall issue an audit report specifying the
amount of the tax or charge that has not been levied or has been short levied or any other
violation of any provision of the Act or the rules.
(6) After completion of the audit under this section or any other provision of this Act or the
rules, an officer having pecuniary jurisdiction in terms of section 60 shall, if required, pass an
order determining the correct amount of payable tax, charging default surcharge and imposing a
penalty.
(7) Notwithstanding the penalties prescribed in section 48–
(a) if a registered person wishes to deposit the amount of the tax short paid or evaded
along with default surcharge voluntarily, whenever it comes to his notice, he may,
before receipt of notice of audit, file a revised return and may deposit the amount of
tax short paid or evaded along with default surcharge, in which case no penalty shall
be recovered from him;
(b) if a registered person wishes to deposit the amount of the tax short paid or evaded
along with default surcharge during the audit, or at any time before issuance of
show cause notice in lieu of the audit report, he may file a revised return and may
deposit the short paid or evaded amount of the tax, default surcharge under section
49 and twenty percent of the penalty payable under section 48, in which case the
show cause notice in lieu of the audit report shall not be issued in the matter;
(c) if a registered person wishes to deposit the amount of tax short paid or evaded along
with default surcharge after issuance of show cause notice, he may file a revised
return and may deposit the short paid or evaded amount of the tax, default surcharge
under section 49, and fifty percent of the penalty payable under section 48 and,
thereafter, the show cause notice shall abate.
1
Inserted by the Punjab Finance Act 2015 (XXIX of 2015).
2
Added by the Punjab Finance Act 2020 (VIII of 2020).
The Punjab Sales Tax on Services Act 2012 (XLII of 2012) 27
34. Special audit by chartered accountants or cost accountants.– 1[(1) The Authority may,
by notification in the official Gazette, appoint a Chartered Accountant as defined under
Chartered Accountants Ordinance, 1961 (X of 1961) or a firm of Chartered Accountants or a
Cost and Management Accountant within the meaning of the Cost and Management
Accountants Act, 1966 (XIV of 1966), or a firm of Cost and Management Accountants or a
person or a firm having expertise in forensic audit, for conducting a special audit or forensic
audit or both of the records of any registered person.]
(2) Notwithstanding that the records of a registered person have been audited by an
officer appointed under section 39, the Authority or a Commissioner may direct an auditor
appointed under sub-section (1) to audit the records of any registered person for the same
period.
(3) An auditor appointed under sub-section (1), shall have such powers of an officer as
may be conferred by the Authority to such auditor under any of the provisions of this Act or
the rules.
2
[(3A) The Authority may require that such officers of the Authority as the Authority may
nominate, shall be associated in the special audit or the forensic audit conducted under
subsection (1) and the Authority may also get the special audit or the forensic audit
conducted jointly with similar audit of a registered person being conducted by FBR or any
other provincial administrations of sales tax on services.]
(4) For purposes of this section or section 33, the audit of records includes audit of the tax
affairs of the registered person under this Act and the rules.
CHAPTER VI
RETURNS
3
35. Return.– [(1) Every registered person shall furnish to the Authority, not later than the
due date, a true, correct and properly filled-up return in the form notified by the Authority,
indicating the tax due and paid during a tax period and such other information or particulars
as may be notified by the Authority.]
4
[(1A) A statement, in the prescribed manner, filed by a person who is only obliged to
withhold or deduct tax, shall be treated as a return of that person, provided that such a
statement shall not be a substitute for the return required to be filed by a person providing
taxable services.]
(2) Notwithstanding anything in sub-section (1), the Authority may, by notification in the
official Gazette, require any registered person or class of registered persons to submit returns
on a quarterly, six monthly or annual basis in lieu of monthly return.
(3) Notwithstanding anything in sub-section (1), the Authority may, by notification in the
official Gazette, require any registered person to submit such returns, as may be prescribed,
on any period basis in addition to other returns required to be filed by such person.
(4) A return filed electronically on the web or any magnetic media or any other computer
readable media as may be specified by the Authority shall be deemed to be a return for the
1
Substituted by the Punjab Finance Act 2015 (XXIX of 2015) for the following subsection (1):
“(1) The Authority may, by notification in the official Gazette, appoint a Chartered Accountant as defined under Chartered
Accountants Ordinance, 1961 (X of 1961) or a firm of Chartered Accountants or a Cost and Management Accountant within the
meaning of the Cost and Management Accountants Act, 1966 (XIV of 1966) or a firm of Cost and Management Accountants, for
conducting a special audit of the records of any registered person.”
2
New subsection inserted by the Punjab Finance Act 2015 (XXIX of 2015).
3
Substituted by the Punjab Finance Act 2020 (VIII of 2020), for the following, effective from 1st July 2020:
“(1) Every registered person shall furnish, not later than the due date, a true, correct and properly filled-up return in the
prescribed form to the Authority, indicating the tax due and paid during a tax period and such other information or particulars as
may be prescribed by the Authority.”
4
New subsection inserted by the Punjab Finance Act 2016 (XXXV of 2016).
28 The Punjab Laws
purpose of sub-sections (1), (2) or (3) and the Authority may, by notification in the official
Gazette, prescribe the criteria for eligibility of the data of such returns and e-intermediaries
who shall digitize the data of such returns and transmit the same electronically under their
digital signatures.
(5) If there is a change in the rate of the tax during a tax period, a separate return in
respect of each portion of tax period showing the application of different rates of tax shall be
furnished.
(6) 1[Subject to rules, a registered person may], after prior permission from the
Commissioner, file a revised return within one hundred and twenty days of filing a return
under sub-sections (1), (2) or (3), to correct any omission or wrong declaration made therein
and to deposit any amount of the tax not paid or short paid.
36. Special returns.– In addition to the return or returns specified under section 35, the
Commissioner may require any person, whether registered or not, to furnish a return (whether
on his own behalf or as an agent or trustee) in a prescribed form and such person shall furnish
the return not later than the date specified in this regard.
37. Final return.– If a person applies for de-registration in terms of section 29, he shall
before such de-registration, furnish a final return to the Authority or the Commissioner in the
specified form in such manner and at such time as may be directed by the Authority or the
Commissioner.
38. Return deemed to have been made.– A return purporting to be made on behalf of a
person by his duly appointed representative or agent shall, for all purposes of this Act or the
rules, be deemed to have been made by such person or under his authority unless proved to
the contrary.
CHAPTER VII
APPOINTMENT OF AUTHORITIES AND THEIR POWERS
39. Appointment of authorities.– (1) For purposes of this Act and the rules, the Authority
may, 2[* * * * *] by notification 3[* * * * *], appoint in relation to any area or cases specified
in the notification, any person to be a–
(a) Commissioner;
(b) Commissioner (Appeals);
(c) Additional Commissioner 4[*****];
(d) Deputy Commissioner;
(e) Assistant Commissioner;
(f) Audit Officer 5[*****];
6
[(ff) Audit-cum-Risk Compliance Officer;]
7
[(fff) Enforcement Officer 8[*****];]
1
Substituted for the words “A registered person may” by the Punjab Finance Act 2015 (XXIX of 2015).
2
The words “in the prescribed manner and” omitted by the Punjab Finance Act 2024 (VIII of 2024), effective from 1st July 2012.
3
The words “in the official Gazette” omitted by the Punjab Finance Act 2024 (VIII of 2024), effective from 1st July 2012.
4
The words “of the Authority” omitted by the Punjab Finance Act 2020 (VIII of 2020), effective from 1st July 2020.
5
The words “of the Authority” omitted by the Punjab Finance Act 2020 (VIII of 2020), effective from 1st July 2020.
6
Inserted by the Punjab Finance Act, 2017 (XII of 2017) and substituted by the Punjab Finance Act 2020 (VIII of 2020), for the following,
effective from 1st July 2020:
“(ff) Risk Compliance Officer of the Authority;”.
7
Inserted by the Punjab Finance Act, 2017 (XII of 2017).
8
The words “of the Authority” omitted by the Punjab Finance Act 2020 (VIII of 2020), effective from 1st July 2020.
The Punjab Sales Tax on Services Act 2012 (XLII of 2012) 29
(g) Inspector 1[*****]; or
(h) An officer of the Authority with any other designation.
(2) The Commissioner (Appeals) and the Commissioner shall be subordinate to the
Authority.
(3) The Additional Commissioners, Deputy Commissioners and the Assistant
Commissioners shall be subordinate to the Commissioner and unless otherwise directed by
the Authority or the Commissioner, both the Deputy Commissioner and the Assistant
Commissioner shall also be subordinate to the Additional Commissioner.
2
[(4) Risk Compliance Officers, Enforcement Officers, Audit Officers, Inspectors and
other officers of equal or lower designations, if any, shall be subordinate to the Deputy
Commissioner or, as the case may be, to the Assistant Commissioner or as the Authority may,
from time to time, specify.]
(5) The Authority may designate any Deputy Commissioner supervisory incharge of any
Assistant Commissioner either by name or by designation in any of its subordinate offices or
formations.
(6) The Authority may distribute the work and related functions amongst the above
designations in a manner it deems appropriate and make changes in such work distribution as
and when deemed proper.
(7) The Authority may, by notification in the official Gazette, prescribe uniform
including shoulder strips and badges for different classes of the officers or officials of the
Authority.
(8) All jurisdictional and competency issues arising under this Act or the rules shall be
decided by the Authority in such manner as it thinks fit.
40. Powers.– (1) An officer appointed under section 39 shall exercise such powers and
discharge such duties as are conferred on him under this Act and the rules and he shall also be
empowered and competent to exercise all powers and discharge all duties or functions
conferred upon any officer subordinate to him.
(2) The Authority may, by general or special order, impose such limitations, restrictions
or conditions on the exercise of such powers and discharge of such duties or functions as it
deems fit.
41. Distribution of powers.– (1) The Authority may, by notification in the official Gazette,
and subject to such limitations or conditions, empower by name or by designation–
(a) an Additional Commissioner to exercise or perform any of the powers or functions of
a Commissioner;
(b) a Deputy Commissioner to exercise or perform any of the powers or functions of an
Additional Commissioner;
(c) an Assistant Commissioner to exercise or perform any of the powers or functions of a
Deputy Commissioner; and
(d) any other officer to exercise or perform any of the powers or functions of an Assistant
Commissioner.
(2) The Authority may confer powers and functions of any officer as additional duties to
any officer of the same rank or a step senior or junior in rank.
1
The words “of the Authority” omitted by the Punjab Finance Act 2020 (VIII of 2020), effective from 1st July 2020.
2
Substituted by the Punjab Finance Act, 2017 (XII of 2017) for the following:
“(4) The Audit Officers and Inspectors and the officers of other such equal or lower designations, if any, shall be subordinate to
the Deputy Commissioner or to the Assistant Commissioner.”
30 The Punjab Laws
(3) An officer to whom any powers or functions are conferred under this section shall not
assign such powers or functions to any other officer except with the prior permission of the
Authority.
42. Special Judges.– (1) The Government may, by notification in the official Gazette, appoint
any person who is serving or has served as District and Sessions Judge for a period of at least
five years as Special Judge and, where it appoints more than one Special Judge, it shall specify
in the notification the headquarters of each Special Judge and the territorial limits within which
he shall exercise jurisdiction under this Act and the rules.
(2) If a Special Judge is, for any reasons, unable to perform his duties under this Act or
the rules, the District and Sessions Judge of the District shall perform the duties of the
Special Judge for the District.
43. Cognizance of offence.– (1) The Special Judge may, within the limits of his jurisdiction,
take cognizance of any offence punishable by him upon–
(a) a report in writing made by an officer, not below the rank of Assistant Commissioner
with the approval of the Commissioner or by an officer especially authorized in this
behalf by the Authority;
(b) receiving a complaint or information of facts constituting such offence made or
communicated by any person; or
(c) his knowledge acquired during any proceedings before him.
(2) If the Special Judge receives a report under clause (a) of sub-section (1), the Special
Judge shall proceed with the trial of the accused.
(3) If the Special Judge receives a complaint or information under clause (b) of sub-section
(1), on the basis of his own knowledge, the Special Judge shall, before issuing a summon or
warrant for appearance of the person hold a preliminary inquiry for purposes of ascertaining the
truth or falsehood of the complaint, information or knowledge or direct any Magistrate or any
officer to hold such inquiry and submit a report, and such Magistrate or officer, shall conduct
such inquiry and make a report accordingly.
(4) If, after conducting such an inquiry or after considering the report of such Magistrate
or officer, the Special Judge may dismiss the complaint if there are no grounds to proceed
further, or may decide to proceed against the person in accordance with law.
(5) A Special Judge or a Magistrate or an officer holding an inquiry under sub-section (3)
may hold such inquiry, as nearly as possible, in accordance with the provisions of section 202
of the Code of Criminal Procedure, 1898 (V of 1898).
44. Application of the Code of Criminal Procedure, 1898.– (1) The provisions of the Code
of Criminal Procedure, 1898 (V of 1898), so far as they are not inconsistent with the
provisions of this Act, shall apply to all proceedings of the court of a Special Judge and such
court shall be deemed to be a Court of Session for the purposes of the said Code and the
provisions of Chapter XXII-A of the Code, so far as applicable and with necessary
modifications, shall apply to the trial of cases by the Special Judge under the Act.
(2) For purposes of sub-section (1), the Code of Criminal Procedure, 1898 (V of 1898)
shall have effect as if an offence punishable under this Act was one of the offences referred to
in sub-section (1) of section 337 of the Code.
45. Exclusive jurisdiction of Special Judge.– No court other than the Special Judge having
jurisdiction, shall try an offence punishable by the Special Judge under this Act.
The Punjab Sales Tax on Services Act 2012 (XLII of 2012) 31
46. Place of sitting.– A Special Judge shall ordinarily hold sittings at his headquarters
provided that keeping in view the general convenience of the parties or the witnesses, he may
hold sittings at any other place.
47. Persons who may conduct prosecution.– (1) An officer not below the rank of an
Assistant Commissioner shall be competent to conduct prosecution before a Special Judge for
and on behalf of the Government.
(2) A prosecution conducted under this Act before the Special Judge may only be
withdrawn by the Authority on the direction or after concurrence of the Government.
CHAPTER VIII
OFFENCES AND PENALTIES
48. Offences and penalties.– (1) If a person commits any offence described in column 2 of
the Table below shall, in addition to and not in derogation of any punishment to which he
may be liable under any other law, be liable to the penalty mentioned against that offence in
column 3.
(2) The sections referred to in column 4 of the said Table shall be deemed to be meant for
illustrative purposes only and the corresponding offence described in column 2 may fall and
be prosecuted under other sections of this Act as well.
TABLE
S. Offences Penalties Section
No.
1 2 3 4
3
1. Any person who is required to apply for Such person shall be liable to pay a penalty [25 and 27]
registration under this Act fails to make of 1[fifty thousand] rupees or five percent of
an application for registration before the amount of the tax he would have been
providing any taxable services liable to pay had he been registered,
whichever is higher.
In the case of non-compliance of
compulsory registration, the minimum
penalty 2[for a company shall be one
hundred thousand rupees and for a person,
other than a company, shall be fifty
thousand rupees]:
If such person who is required to get himself
registered under this Act, fails to get
registered within ninety days of providing
taxable services, he shall be further liable,
upon conviction by a Special Judge, to
imprisonment for a term which may extend
to one year, or with fine which may extend
to the amount of the tax he would have been
liable to pay had he been registered, or with
both.
1
Substituted for the words “ten thousand”, by the Punjab Finance Act 2014 (XVII of 2014).
2
Substituted for the words “shall be ten thousand rupees” by the Punjab Finance Act 2015 (XXIX of 2015).
3
Substituted for “25” by the Punjab Finance Act 2015 (XXIX of 2015).
32 The Punjab Laws
S. Offences Penalties Section
No.
1 2 3 4
2. Where any person fails to furnish a Such person shall be liable to pay a penalty 35
return within the due date. of 1[ten] thousand rupees provided 2[further]
if a return is not filed within fifteen days of
the due date, a penalty of 3[two hundred]
rupees for each day of default shall be
levied.
3. Where any person fails to deposit the (a) Such person shall be liable to pay a 3, 4, 10, 11,
amount of the tax due or any part penalty of ten thousand rupees or five 17, 18 and
thereof in the time or manner laid down percent of the tax payable for that 68
under this Act or the rules. period, whichever is higher 4[:]
5
[Provided that if the amount of tax or
any part thereof is paid within ten days
from the due date, the defaulter shall
pay a penalty of five hundred rupees for
each day of default.]
(b) If the amount of the tax due is not paid
even after the expiry of a period of sixty
days of issuance of the notice for such
payment by an officer, not below the
rank of Assistant Commissioner, the
person shall be further liable, upon
conviction by a Special Judge, to
imprisonment for a term which may
extend to three years, or with fine which
may extend to the amount of the unpaid
tax, or with both.
(c) No penalty shall be levied if any
miscalculation is made for the first time
during a year.
6
4. Any person who fails to maintain [Such person shall be liable to pay a penalty 30, 31 and
records required under the Act or the which may range from ten thousand rupees 32
rules. to one hundred thousand rupees or five
percent of the total tax payable for the
period for which he has failed to maintain
the required record, whichever is higher.]
7 2
[5. Where a person, without any reasonable [Such person shall pay a penalty of twenty 30, 32, 53
cause, fails to produce the record or five thousand rupees for the first default and and 57]
information despite receipt of a notice one hundred thousand rupees for each
from the Authority or any officer of the subsequent default.]
Authority directing him to produce such
record or information8[:]
1
[Provided that if the record is not
produced despite issuance of three
notices, it shall be considered as
sufficient evidence that the person has
failed to maintain the record.]
1
Substituted for the word “five”, by the Punjab Finance Act 2016 (XXXV of 2016).
2
Inserted by the Punjab Finance Act 2019 (XV of 2019).
3
Substituted for the word “hundred”, by the Punjab Finance Act 2016 (XXXV of 2016).
4
Substituted for the full stop by the Punjab Finance Act 2022 (IX of 2022), effective from 1st July 2022.
5
Inserted by the Punjab Finance Act 2022 (IX of 2022), effective from 1st July 2022.
6
Substituted by the Punjab Finance Act 2022 (IX of 2022), effective from 1st July 2022, for the following:
“Such person shall pay a penalty of ten thousand rupees or five percent of the total tax payable for the tax period for which he
has failed to maintain the required record, whichever is higher.”
7
Substituted by the Punjab Finance Act 2015 (XXIX of 2015).
8
Substituted for the full stop by the Punjab Finance Act 2022 (IX of 2022), effective from 1st July 2022.
The Punjab Sales Tax on Services Act 2012 (XLII of 2012) 33
S. Offences Penalties Section
No.
1 2 3 4
6. Any person who knowingly or Such person shall be liable to pay a penalty General
fraudulently– of 5[fifty] thousand rupees or one hundred
(a) submits a false or forged document percent of the tax payable for the tax period
to any officer of the Authority; or to which the offence relates, whichever is
(b) destroys, alters, mutilates or higher.
falsifies the records; or Such person shall further be liable, upon
(c) makes a false statement, false conviction by a Special Judge, to
declaration, false representation, imprisonment for a term which may extend
false personification, or gives any to five years or with fine which may extend
false information 3[; or] to an amount equal to the tax payable for the
4
[(d) fails to pay, recover, or deposit the tax period to which the offence relates, or
actual amount of tax, or claims with both.
inadmissible tax credit or
adjustment or deduction or refund.]
7. Where any person who denies or Such person shall be liable to pay a penalty 31, 32 and
obstructs the access of an authorized of twenty five thousand rupees or one 56
officer to the business premises, hundred percent of the tax payable for the
registered office or to any other place tax period to which the offence relates,
where records are kept, or otherwise whichever is higher.
refuses access to accounts or records. Such persons shall, further be liable, upon
conviction by a Special Judge, to
imprisonment for a term which may extend
to five years, or with a fine which may
extend to an amount equal to the tax payable
for the tax period to which the offence
relates, or with both.
1
Inserted by the Punjab Finance Act 2022 (IX of 2022).
2
Substituted by the Punjab Finance Act 2022 (IX of 2022), effective from 1st July 2022, for the following:
“Such person shall pay a penalty of twenty five thousand rupees for the first default and fifty thousand rupees for each
subsequent default.”
3
Substituted for the full stop by the Punjab Finance Act 2022 (IX of 2022), effective from 1st July 2022.
4
Inserted by the Punjab Finance Act 2022 (IX of 2022), effective from 1st July 2022.
5
Substituted for the words “twenty five” by the Punjab Finance Act 2022 (IX of 2022), effective from 1st July 2022.
34 The Punjab Laws
S. Offences Penalties Section
No.
1 2 3 4
8. Where any person commits, causes to Such person shall be liable to pay a penalty of 2(43)
commit or attempts to commit tax fraud, up to five hundred thousand rupees, but not
or abets or connives in the commission of less than twenty five thousand rupees, or one
tax fraud equal to twenty five thousand hundred percent of the tax payable for the tax
rupees or more. period to which the offence relates, whichever
is higher.
Such person shall, further be liable, upon
conviction by a Special Judge, to
imprisonment for a term which may extend
to five years, or with fine which may extend
to an amount equal to the tax payable for the
tax period to which the offence relates, or
with both.
9. Where any person violates any embargo Such person shall be liable to pay a penalty of 70
placed on providing of service 1[or 2
[one hundred] thousand rupees or 3[equal to]
tempers a seal placed by an officer of the the amount of the tax sought to be recovered,
Authority]. whichever is higher.
Such person shall, further be liable, upon
conviction by a Special Judge, to
imprisonment for a term which may extend to
one year, or with fine which may extend to
amount equal to the amount of the tax sought
to be recovered, or with both.
7
10. Where any person obstructs any officer Such person shall be liable to pay a penalty [General
of the Authority in the performance of of 4[one hundred thousand] rupees or one and section
his official duties under this Act or the hundred percent of the tax payable for the tax 59 and
rules. period to which the offence relates, section 70]
whichever is higher.
Such person shall be further liable, upon
conviction by a Special Judge, to
imprisonment for a term which may extend to
one year or with fine not exceeding fifty
thousand rupees or with both 5[:]
6
[Provided that where any recipient of a
service does not pay the amount of tax due to
be paid to a service provider, such recipient
shall also be liable to action for obstruction
under this provision.]
11. Where any person who fails to fulfill any Such person shall be liable to pay a penalty General
of the conditions, limitations or of 8[ten thousand rupees or five per cent of
restrictions prescribed in a notification the amount of tax involved], whichever is
issued under any of the provisions of the higher.
Act or the rules.
1
Substituted for the words “in connection with recovery of the tax” by the Punjab Finance Act, 2019 (XV of 2019).
2
Substituted for the words “twenty five” by the Punjab Finance Act 2022 (IX of 2022), effective from 1st July 2022.
3
Substituted for the words “ten percent of” by the Punjab Finance Act 2022 (IX of 2022), effective from 1st July 2022.
4
Substituted for the expression “twenty five thousand” by the Punjab Finance Act, 2017 (XII of 2017).
5
Substituted for the full-stop by the Punjab Finance Act 2014 (XVII of 2014).
6
Proviso inserted by the Punjab Finance Act 2014 (XVII of 2014).
7
Substituted for the words “General and section 59” by the Punjab Finance Act, 2017 (XII of 2017).
8
Substituted for the words “five thousand rupees or three percent of the tax payable for the tax period to which the offence relates” by the
Punjab Finance Act 2022 (IX of 2022), effective from 1st July 2022.
The Punjab Sales Tax on Services Act 2012 (XLII of 2012) 35
S. Offences Penalties Section
No.
1 2 3 4
12. Where any person who contravenes any Such person shall be liable to pay a penalty General
provision of this Act or the rules for of ten thousand rupees or 1[five] percent of
which no penalty has specifically been the tax payable for the tax period to which
provided in this section. the offence relates, whichever is higher.
13. Where any person repeats an offence Such person shall be liable to pay twice the General
for which a penalty is provided under amount of penalty provided under the Act
this Act. for the said offence.
14. Where any person– Such person shall pay a penalty of twenty General
(a) knowingly and without lawful five thousand rupees or one hundred percent
authority gains access to or of the amount equal to the loss caused to the
attempts to gain access to the tax revenue.
computerized system; or Such person shall further be liable, upon
(b) unauthorizedly uses or discloses or conviction by the Special Judge, to
publishes or otherwise disseminates imprisonment for a term which may extend
information obtained from the to one year, or with fine which may extend
computerized system; or to an amount equal to the loss caused to the
(c) falsifies any record or information tax revenue, or with both.
stored in the computerized system;
or
(d) knowingly or dishonestly damages
or impairs the computerized
system; or
(e) knowingly or dishonestly damages or
impairs any duplicate tape or disc or
other medium on which any
information obtained from the
computerized system is kept or stored;
or
(f) unauthorizedly uses unique user
identifier of any other registered
user to authenticate a transmission
of information to the computerized
system; or
(g) fails to comply with or contravenes
any of the conditions prescribed for
security of unique user identifier.
2
[15 Where any person: Such person shall be liable to pay a penalty 59A
3
(a) avoids, denies or obstructs of up to one [million] rupees, but not less
installation of electronic invoice 4
than [four hundred] thousand rupees. In
monitoring system at a business case of three acts of commission or
premises; or omission, the business premises of such
(b) fails to comply with the electronic person may further be liable to be sealed for
invoice monitoring system or a period which may extend to one month.
issues invoices bypassing the
system.
1
Substituted for the word “three” by the Punjab Finance Act 2022 (IX of 2022), effective from 1st July 2022.
2
Inserted by the Punjab Finance Act 2018 (XXX of 2018); effective from 1st November 2018.
3
Substituted for the words “hundred thousand” by the Punjab Finance Act 2025 (LVIII of 2025), effective from 1st July 2025.
4
Substituted for the words “twenty five” by the Punjab Finance Act 2025 (LVIII of 2025), effective from 1st July 2025.
36 The Punjab Laws
S. Offences Penalties Section
No.
1 2 3 4
16 Where any person: Such person shall be liable to pay a penalty 59A]
(a) causes intentional damage to or of one hundred thousand rupees for each act
intervention in the electronic of commission. In case of three acts of such
invoice monitoring system; or commission, the business premises of such
(b) impedes or obstructs transmission of person shall be liable to be sealed for a
invoice data to the Authority. period which may extend to one month and
such person shall further be liable, upon
conviction by a Special Judge, to
imprisonment for a term which may extend
to one year, or with fine which may extend
to the amount equal to the tax payable for
the tax period to which the offence relates,
or with both.
1
[17 Where any person fails or refuses to Such person shall be liable to pay a penalty 30
issue a tax invoice. of twenty thousand rupees on first default
and fifty thousand rupees for each
subsequent default.
In case of three acts of such default, the
business premises shall be liable to be
sealed for a period which may extend to one
month.
3
18 Where any person fails to intimate any [Such person shall be liable to a penalty 25
change in particulars of registration which may range from fifty thousand rupees
including the particulars relating to to one hundred thousand rupees.]
business address, 2[business bank
account, changes in taxable / economic
activity etc. in accordance with the
requirements prescribed under this Act
and rules made thereunder within
fourteen days of such change].
19 Where any person fails to declare, Such person shall be liable to pay a penalty 25
conceals any of business bank accounts which may range from one hundred
or gives misleading declaration or fails thousand rupees to five hundred thousand
to intimate any change in business bank rupees.
account within fourteen days of such
change.
4
20 Where any person either avoids, defies, Such person shall be liable to pay a penalty [59B]]
fails to comply with electronic of up to one hundred thousand rupees, but
invoicing system or issues invoices not less than twenty five thousand rupees.
bypassing the electronic invoicing In case of three consecutive defaults, the
system. business premises of such person may
further be liable to sealing for a period
which may extend to one month.
1
Inserted by the Punjab Finance Act 2019 (XV of 2019).
2
Substituted for the words “branches etc. within fourteen days” by the Punjab Finance Act 2022 (IX of 2022), effective from 1st July 2022.
3
Substituted by the Punjab Finance Act 2022 (IX of 2022), effective from 1st July 2022, for the following:
“Such person shall be liable to pay a minimum penalty of fifty thousand rupees.”
4
Substituted for the expression “59A”, by the Punjab Finance Act 2021 (XIX of 2021), effective from 1st July 2021.
The Punjab Sales Tax on Services Act 2012 (XLII of 2012) 37
S. Offences Penalties Section
No.
1 2 3 4
1 2
[21 Where a registered person charges sales [Such person shall be liable to pay a penalty 10]
tax in excess to the rate provided in the of twenty thousand rupees on first default
Second Schedule. and fifty thousand rupees for each
subsequent default:
Provided that in case of three defaults, the
business premises of such person may be
liable to sealing for a period which may
extend to one month.]
3
[22 Where any person unauthorizedly issues Such person shall be liable to pay a penalty 30
an invoice in which an amount of tax is of ten thousand rupees per invoice or five
specified. percent of the amount of tax involved,
whichever is higher.
23 Where a bank fails to attach, or delays Such bank shall be liable to pay a penalty of 70
in attaching the bank account of a one hundred thousand rupees or one
person, specified in the notice issued by hundred percent of the tax sought to be
an officer of the Authority, from whom recovered, whichever is higher. The
tax is sought to be recovered, or fails to concerned manager or officer in-charge of
pay or such bank shall further be liable, upon
conviction by a Special Judge, to
imprisonment, which may
24 Where any person refuses to receive Such person shall be liable to pay a penalty 78]
any notice or order issued by an officer of fifty thousand rupees or one hundred
of the Authority. percent of the tax payable for the tax period
to which the offence relates, whichever is
higher.
4
[25 where any person refuses to accept Such person shall be liable to pay a penalty General]
payments through digital means i.e. of up to one million rupees:
(debit/credit cards, mobile wallets or Provided that the penalty shall not be less
QR scanning). than four hundred thousand rupees on first
and three hundred thousand rupees on each
subsequent default:
Provided further that in case of three acts of
commission or omission, the business
premises of such person may further be
liable to be sealed for a period which may
extend to one month.
49. Default surcharge.– (1) Notwithstanding the provisions of section 24, if a registered
person does not pay the tax due or any part thereof, whether willfully or otherwise, on time or
in the manner specified under this Act, rules or notifications or procedures issued thereunder,
he shall, in addition to the tax due and any penalty under section 48, pay default surcharge at
the rate mentioned below:-
(a) the person liable to pay any amount of tax or charge shall pay default surcharge at the
rate of inter-bank rate plus three percent per annum of the amount of the tax due; and
(b) in case, the default is on account of tax fraud, the person who has committed tax fraud
shall pay default surcharge at the rate of two percent per month, of the amount of tax
1
Added by the Punjab Finance Act 2021 (XIX of 2021), effective from 1st July 2021.
2
Substituted by the Punjab Finance Act 2022 (IX of 2022), effective from 1st July 2022, for the following:
“Such person shall be liable to pay a penalty of rupees ten thousand per invoice or ten percent of the invoice amount, whichever
is higher.”
3
Added by the Punjab Finance Act 2022 (IX of 2022), effective from 1st July 2022.
4
Added by the Punjab Finance Act 2025 (LVIII of 2025), effective from 1st July 2025.
38 The Punjab Laws
evaded, till such time the entire liability including the amount of default surcharge is
paid.
(2) For the purpose of calculation of default surcharge, the period of default shall be
reckoned from the sixteenth day following the due date of the tax period to which the default
relates, to the day preceding the date on which the tax due is actually paid.
Explanation: For purposes of this section, the tax due does not include the amount of
penalty.
50. Exemption from penalty and default surcharge.– The Government may, by a
notification in the official Gazette, exempt any registered person or any taxable service from
payment of the whole or any part of the penalty and default surcharge subject to such
conditions and limitations as may be specified.
51. Compounding of offences.– Notwithstanding anything contained in any other provision of
this Act, where any person has committed any offence warranting prosecution under the Act, the
Authority may, either before or after the institution of any proceedings for the prosecution of such
offence, compound the offence and terminate the proceedings if such person pays the amount of
the tax due along with such default surcharge and penalty as is determined by the Authority under
the provisions of this Act and the rules.
52. Recovery of tax not levied or short-levied.– (1) Where by reason of inadvertence, error,
misconstruction or for any other reason, any tax or charge has not been levied or has been
short levied, the person liable to pay such amount of the tax or charge shall be served with a
notice, within 1[eight] years of the relevant tax period 2[for periods before 1st of July 2022
and within five years from the end of the financial year in which the relevant tax period falls
for tax periods after 1st July 2022,] requiring him to show cause for payment of the amount
specified in the notice.
(2) Where by reason of some collusion, abetment, deliberate attempt, mis-statement,
fraud, forgery, false or fake documents–
(a) any tax or charge has not been paid or is, short paid, the person liable to pay such
tax shall be served with a notice within 3[eight] years of relevant tax period, 4[for
periods before 1st of July 2022 and within five years from the end of the financial
year in which the relevant tax period falls for tax periods after 1st July 2022,]
requiring him to show cause for non-payment of such tax; and
(b) any amount of the tax is refunded which is not due, the person obtaining such
refund shall be served with a notice within 5[five years from the end of the
financial year in which the refund was received] to show cause for recovery of
such refund.
(3) The officer shall, after considering the objections of the person served with a notice under
sub-sections (1) or (2) or if the objections are not received within the stipulated period, determine
the amount of the tax or charge payable by him and such person shall pay the amount so
determined.
1
Substituted for the words “five” by the Punjab Finance Act 2018 (XXX of 2018); effective from 1st November 2018.
2
Inserted by the Punjab Finance Act 2022 (IX of 2022), effective from 1st July 2022.
3
Substituted for the word “five” by the Punjab Finance Act 2018 (XXX of 2018); effective from 1st November 2018.
4
Inserted by the Punjab Finance Act 2022 (IX of 2022), effective from 1st July 2022.
5
Substituted for the words “eight years of the receipt of such refund” by the Punjab Finance Act 2022 (IX of 2022); effective from 1st July
2022.
The Punjab Sales Tax on Services Act 2012 (XLII of 2012) 39
1
[(4) Any order under subsection (3) shall be made within one year from the end of the
financial year in which the show cause notice is issued.]
(5) In computing the period specified in sub-section (4), any period during which the
proceedings are adjourned on account of a stay order or proceedings under section 69 2[* * **
* * ** ** ] shall be excluded.
53. Power to summon persons to give evidence and produce documents.– (1) An officer
may summon any person whose attendance he considers necessary either to tender evidence
or to produce documents or any other thing in any audit, inquiry, investigation or proceedings
which such officer is making for any of the purposes of this Act and the rules.
(2) Any person summoned under sub-section (1) shall be bound to attend either in person
or by an authorized agent, as the officer may direct.
(3) Notwithstanding anything in sub-sections (1) and (2), a person who is exempt from
personal appearance in a Court under sections 132 and 133 of the Code of Civil Procedure
1908 (V of 1908), shall not be required to appear in person.
(4) Any proceedings under this Act or the rules before an officer shall be deemed to be
judicial proceedings within the meaning of sections 193 and 228 of the Pakistan Penal Code
1860 (XLV of 1860).
54. Power to arrest and prosecute.– (1) An officer authorized by the Authority by
notification in the official Gazette in this behalf, who on the basis of material evidence has
reasonable cause to believe that any person has committed a tax fraud or any offence
warranting prosecution under this Act, may cause arrest of such person.
(2) All arrests made under this Act shall be carried out in accordance with the relevant
provisions of the Code of Criminal Procedure, 1898 (V of 1898).
(3) Where the person suspected of tax fraud or any offence warranting prosecution under
this Act is a company, every director or officer of that company whom the officer has reason to
believe is personally responsible for actions of the company contributing to the tax fraud or any
offence warranting prosecution under this Act shall be liable to arrest provided that such arrest
shall not absolve the company from the liabilities of payment of the tax, default surcharge and
any penalty imposed or due under this Act.
55. Procedure to be followed on arrest of a person.– (1) When an officer arrests a person
under section 54, he shall immediately intimate the fact of arrest of that person to the Special
Judge who may direct such officer to produce that person at such time and place and on such
date as the Special Judge considers expedient.
(2) Notwithstanding anything contained in sub-section (1), any person arrested under this
Act shall be produced before the Special Judge or, if there is no Special Judge within a
reasonable distance, to the nearest Magistrate within twenty-four hours of such arrest,
excluding the time necessary for the journey from the place of arrest to the court of the
Special Judge or of the Magistrate.
(3) When any person is produced under sub-section (2) before the Special Judge, the
Special Judge may, on the request of such person, after perusing the record, if any and after
1
Substituted by the Punjab Finance Act 2022 (IX of 2022); effective from 1st July 2022, for the following:
“(4) Any order under sub-section (3) shall be made within one hundred and twenty days of issuance of the notice to show cause or
within such extended period as the officer may, for reasons to be recorded in writing, fix provided that such extended period shall not
ordinarily exceed sixty days.”
2
The words “or the time taken through adjournments by the petitioner not exceeding thirty days” omitted by the Punjab Finance Act 2022
(IX of 2022); effective from 1st July 2022.
40 The Punjab Laws
giving the prosecution an opportunity of being heard, admit him to bail on his executing a
bond, with or without sureties, or refuse to admit him to bail and direct his detention at such
place as he deems fit.
(4) Nothing contained herein shall preclude the Special Judge from cancelling the bail of
any such person at a subsequent stage if, for any reason, he considers such cancellation
necessary, but before passing such order he shall afford such person an opportunity of being
heard, unless for reasons to be recorded he considers that the affording of such opportunity
shall defeat the purpose of this Act.
(5) When such person is produced under sub-section (2) before a Magistrate, such
Magistrate may, after authorizing his detention in such custody at such place and for such
period as he considers necessary or proper for facilitating his earliest production before the
Special Judge, direct his production before the Special Judge on a date and time to be fixed
by him or direct such person to be forthwith taken to, and produced before the Special Judge
and he shall be so taken or produced.
(6) Nothing in sub-sections (2), (3) and (4) shall preclude the Special Judge or the
Magistrate from remanding any such person to the custody of the officer holding an inquiry
or investigation against that person if such officer makes a request in writing to that effect,
and the Special Judge or the Magistrate, after perusing the record, if any, and hearing such
person, is of the opinion that for the completion of inquiry or investigation it is necessary to
make such order but the total period of such custody shall not exceed fourteen days.
(7) When any person is arrested under this Act, the arresting officer shall record the fact
of arrest and other relevant particulars in the register specified in sub-section (11) and shall
immediately proceed to inquire into the charge against such person and if he completes the
inquiry within twenty-four hours of his arrest, and he may, after producing such person
before the Special Judge or the Magistrate, make a request for his further detention in his
custody.
(8) While holding an inquiry under sub-section (7), the officer shall exercise the same
powers as are conferred upon or exercisable by an officer incharge of a police station under the
Code of Criminal Procedure, 1898 (V of 1898), but such officer shall exercise such powers
subject to the foregoing provisions of this section while holding an inquiry under this Act.
(9) If the officer, after holding an inquiry, is of the opinion that there is no sufficient evidence
or reasonable ground for suspicion against such person, he shall release him on his executing a
bond, with or without sureties, and shall direct such person to appear, as and when required,
before the Special Judge, and make a report to the Special Judge for the discharge of such person
and shall make a full report of the case to his immediate superior.
(10) The Special Judge to whom a report has been made under sub-section (8) may, after the
perusal of record of the inquiry, and hearing the prosecution, agree with such report and discharge
the accused or, if he is of the opinion that there is sufficient ground for proceedings against such
person, proceed with his trial and direct the prosecution to produce evidence.
(11) The officer holding an inquiry under this section shall maintain a register to be
called register of arrests and detentions in the form prescribed by the Government in which
he shall enter the name and other particulars of every person arrested under this Act, together
with the time and date of arrest, the details of the information received, the details of things,
goods or documents, recovered from his custody, the name of the witnesses and the
explanation, if any, given by him and the manner in which the inquiry has been conducted
from day to day; and, such register or authenticated copies of its entries shall be produced
before the Special Judge, whenever it is directed by the Special Judge.
The Punjab Sales Tax on Services Act 2012 (XLII of 2012) 41
(12) After completing the inquiry, the officer shall, as early as possible, submit to the Special
Judge a complaint in the same form and manner in which the officer incharge of a police station
submits a report before a Court.
(13) Any Magistrate of the first class may record any statement or confession during
inquiry or investigations under this Act in accordance with the provisions of section 164 of
the Code of Criminal Procedure, 1898 (V of 1898).
56. Authorized officers to have access to premises, stocks, accounts and records.– (1)
Any officer, authorized in this behalf by the Authority by notification in the official Gazette,
shall have free and full access to the business premises, registered office or any other place
where any business records or documents required under this Act and the rules are kept or
maintained by any registered person or a person liable for registration or whose business
activities are covered under this Act and the rules or who may be required for any inquiry or
investigation in any tax fraud committed by him or his agent or any other person; and such
officer may, at any time, inspect the records, data, documents, correspondence, accounts,
statements, utility bills, bank statements, information regarding nature and sources of funds
or assets with which his business is financed, and any other records or documents, including
those which are required under any other law maintained in any form or mode and may take
into his custody such records, statements, diskettes or documents, in original or copies, in
such form as the officer may deem fit against a signed receipt.
(2) The registered person, his agent or any other person specified in sub-section (1), shall
answer any question or furnish such information or explanation as may be asked by the
authorized officer.
(3) All other Government departments, local bodies, autonomous bodies, corporations or
such other institutions shall supply requisite information and render necessary assistance to
the authorized officer in the course of inquiry or investigation under this section.
57. Obligation to produce documents and provide information.– (1) Notwithstanding
anything contained in this Act or any other law, any person required to maintain any record
under this Act and the rules, shall, on demand by an officer, 1[*******] by notice in writing,
as and when specified in the notice–
(a) produce for examination, such documents or records which the officer considers
necessary or relevant to the audit, inquiry or investigation under this Act;
(b) allow the officer to take extracts from or make copies of such documents or records;
and
(c) appear before the officer and answer any question put to him concerning the
documents and records relating to the audit, inquiry or investigation referred to in
clause (a).
2
[(2) An officer conducting an audit, enquiry, investigation or otherwise for the purposes
of the Act or the rules may require in writing any person to furnish any information as is held
by the person.]
(3) The Authority 3[or an officer authorized by the Authority] may require, in writing, any
person, department, company or organization, to provide any information or data held by that
1
The expression “not below the rank of an Assistant Commissioner,” omitted by the Punjab Finance Act 2020 (VIII of 2020), effective from
1st July 2020.
2
Substituted by the Punjab Finance Act 2015 (XXIX of 2015) for the following:
“(2) An officer conducting an audit, inquiry or an investigation under the Act and the rules, may require in writing any person,
department, company or organization to furnish such information as is held by that person, department, company or
organization, which, in the opinion of the officer, is relevant to such audit, inquiry or investigation.”
3
Inserted by the Punjab Finance Act 2015 (XXIX of 2015).
42 The Punjab Laws
person, department, company or organization, which, in the opinion of the Authority, is
required for purposes of formulation of policy or administering or implementing this Act and
the rules.
(4) Every person, department, company or organization shall furnish the information
requisitioned by the Authority or the officer under sub-sections (2) or (3), within the time
specified in the notice issued by the Authority.
58. Searches under warrants.– (1) Where any officer has reason to believe that any
documents or things which in his opinion, may be useful for, or relevant to, any proceedings
under this Act are kept in any place, he may after obtaining a warrant from the Magistrate or
from the Commissioner, enter that place and cause a search to be made at any time.
(2) All searches made under sub-section (1) shall be carried out in accordance with the
relevant provisions of the Code of Criminal Procedure, 1898 (V of 1898).
59. Posting of an officer to business premises.– (1) Subject to such conditions and
restrictions as it deems fit to impose, the Authority may post an officer to the premises of a
1
registered person to monitor the provision [and receipt] of services by such registered
person.
(2) Notwithstanding anything contained in sub-section (1), if a Commissioner, on the
basis of material evidence, has reasonable cause to believe that a registered person is
involved in evasion of the tax or tax fraud, he may, by recording the grounds in writing, post
an officer of the Authority to the premises of such registered person to monitor provision
2
[and receipt] of services by such person.
(3) A person to whose premises, an officer of the Authority is posted under this section,
shall provide on his own cost, all facilities required to meet the departmental requirements of
such posting as determined by the Authority or the Commissioner.
3
[59A. Power to Seal the Business Premises.– When an officer of the Authority not below
the rank of Commissioner has reason to believe that the Act or the rules made thereunder are
not obeyed and observed at a business premises, he may by an order in writing, seal that
premises for a period which may extend to one month upon giving a notice in writing to this
effect.]
4
[59B. Monitoring or Tracking by Electronic or other Means.– (1) Subject to such
conditions, restrictions and procedures, as it deems fit to impose, the Authority may, by
notification in the official Gazette, determine any registered person or class of registered
persons or any of the services or class of services in respect of which monitoring or tracking
of provision of service or services may be enforced through electronic or other means.
(2) The Authority may, in the prescribed manner, devise and enforce an electronic system
for monitoring and capturing the transactions recorded or the invoices issued by a registered
person or a class of registered persons or a service or services or class of services, and for
transferring the electronic information so obtained to its computer system at such times as it
deems fit.
1
Inserted by the Punjab Finance Act 2021 (XIX of 2021); effective from 1st July 2021.
2
Inserted by the Punjab Finance Act 2021 (XIX of 2021); effective from 1st July 2021.
3
Inserted by the Punjab Finance Act 2018 (XXX of 2018); effective from 1st November 2018.
4
Inserted by the Punjab Finance Act 2018 (XXX of 2018); effective from 1st November 2018.
The Punjab Sales Tax on Services Act 2012 (XLII of 2012) 43
1
[(2A) The Authority may, in the prescribed manner, devise, implement and declare
mandatory an electronic invoicing system for issuance of tax invoices by a registered person
or a class of registered persons or a service or a class of services.]
(3) The Commissioner may order, as and when required, video vigilance of the economic
activity of a registered person or class of registered persons to monitor provision of taxable
services including counting of heads of visiting customers, occupancy of sitting space and
regularity of issuance of invoices.
(4) For the purpose of this section, the Authority shall, in the prescribed manner, take
measures for the security protection and processing of personal data of natural persons.
(5) From such date as may be specified by the Authority, the persons providing or
rendering taxable services shall compulsorily use such electronic means, modes or systems,
as may be prescribed by the Authority for issuance of tax invoice.]
60. Powers of adjudication.– (1) In respect of cases involving determination of tax liability,
assessment of the tax, charging of default surcharge, imposition of penalty and recovery of
amount erroneously refunded or any other contravention or violation including tax fraud
under this Act or the rules, the jurisdiction and powers of adjudication of the officers shall be
as follows:-
(a) Additional Commissioner: Cases without any restriction as to the amount of the tax
involved 2[* * * *];
3
[(b) Assistant Commissioner/Deputy Commissioner: Cases where the amount of the tax
involved does not exceed ten million rupees;]
4
[(c) Enforcement Officer/Audit-cum-Risk Compliance Officer: Cases where the
amount of the tax involved does not exceed five million rupees; and]
5
[(d) Other officers of the Authority: Such cases or class of cases as may be prescribed by
the Authority.]
(2) The Commissioner may adjudicate any case falling in the jurisdiction and powers of
any officer subordinate to him 6[or falling in jurisdiction specifically assigned to him by the
Authority] and appeal against the order passed by the Commissioner in such case shall lie to
the Appellate Tribunal.
(3) The Authority may regulate the system of adjudication including transfer of cases and
extension of time limit.
7
[(4) Notwithstanding the provisions of subsection (1), the Authority may assign a case or
class of cases to any of its officers involving any amount of tax involved.]
Explanation: For purposes of this section, the tax means the principal amount of the tax
other than default surcharge and in case where only default surcharge is involved, the amount
of default surcharge.
1
Inserted by the Punjab Finance Act 2019 (XV of 2019).
2
The words “or amount erroneously refunded” omitted by the Punjab Finance Act 2020 (VIII of 2020), effective from 1st July 2020.
3
Substituted by the Punjab Finance Act 2020 (VIII of 2020), for the following, effective from 1st July 2020:
“(b) Deputy Commissioner: Cases where the amount of the tax involved or the amount erroneously refunded does not exceed two
and a half million rupees;”
4
Substituted by the Punjab Finance Act 2020 (VIII of 2020), for the following, effective from 1st July 2020:
“(c) Assistant Commissioner: Cases where the amount of the tax involved or the amount erroneously refunded does not exceed one
million rupees; and”
5
Substituted by the Punjab Finance Act 2019 (XV of 2019) for the following:
“(d) other officers of the Authority: Such cases, other than those mentioned above, as may be prescribed.”
6
Inserted by the Punjab Finance Act 2020 (VIII of 2020), effective from 1st July 2020.
7
Inserted by the Punjab Finance Act 2020 (VIII of 2020), effective from 1st July 2020.
44 The Punjab Laws
61. Revision by the Commissioner.– (1) The Commissioner may, of his own motion or on
an application made in writing by a registered person for revision, call for and examine the
record of any proceedings under this Act in which an order has been passed by an officer
subordinate to him.
(2) If after examining the record under sub-section (1), the Commissioner is not satisfied
with the legality or propriety of any order passed by an officer, the Commissioner may make
such revision to the order as he may think fit.
(3) No order imposing or enhancing any penalty or fine requiring payment of a greater
amount of the tax than the originally levied amount shall be passed unless the person affected
by such order has been given an opportunity of showing cause and of being heard.
(4) The Commissioner shall not revise any order under sub-section (2) if–
(a) an appeal under section 63 is pending or the matter has been referred for
resolution under section 69;
(b) where an appeal against the order lies under section 63, the time within which
such appeal can be made has not expired or the person has not waived in writing
his right of appeal;
(c) in the case of an application made by a person, the application has not been made
within ninety days of the date on which such order was served on the person,
unless the Commissioner is satisfied that the person was prevented by sufficient
cause from making the application within the time allowed; and
(d) in the case where the Commissioner has on his own motion called for and examined
an order passed by a subordinate officer, more than five years have lapsed from the
date of the original order.
(5) No application for revision of an assessment shall be made under sub-section (1)
unless the amount of the tax due under the assessment, as is not in dispute, has been paid by
the taxpayer.
62. Revision by the Authority.– (1) The Authority may, of its own motion, call for and
examine the record of any departmental proceedings under this Act or the rules for the
purpose of satisfying itself as to the legality or propriety of any decision or order passed
therein by an officer.
(2) If after examining the record under sub-section (1), the Authority is not satisfied with
the legality or propriety of any decision or order passed by an officer, it may pass such order
as it may think fit.
(3) No order imposing or enhancing any penalty or fine requiring payment of a greater
amount of the tax than the originally levied amount shall be passed unless the person affected
by such order has been given an opportunity of showing cause and of being heard.
(4) No proceeding under this section shall be initiated in a case where an appeal under
section 66 is pending or the matter has been referred for resolution under section 69.
(5) No order shall be made under this section after the expiry of five years from the date
of the original decision or order of the subordinate officer referred to in sub-section (1).
CHAPTER IX
APPEALS
63. Appeals.– (1) Any person, other than the Authority or any of its employees, aggrieved by
any decision or order passed under section 60 by an officer of the Authority other than
Commissioner may, within thirty days of the date of receipt of such decision or order, prefer
an appeal to the Commissioner (Appeals).
The Punjab Sales Tax on Services Act 2012 (XLII of 2012) 45
(2) An appeal under sub-section (1) shall–
(a) be in the prescribed form;
(b) be verified in the prescribed manner;
(c) state precisely the grounds upon which the appeal is made;
(d) be accompanied by the fee specified in sub-section (3); and
(e) be lodged with the Commissioner (Appeals) within the time set out in sub-section
(4).
(3) The prescribed fee shall be–
(a) where the appellant is a company, one thousand rupees; or
(b) where the appellant is not a company, two hundred rupees.
1
[(4) An appeal under subsection (1) may be filed manually or electronically as may be
specified by the Authority.]
(5) The Commissioner (Appeals) may, upon application in writing by the appellant, admit an
appeal after the expiration of the period specified in sub-section (4) if the Commissioner
(Appeals) is satisfied that the appellant was prevented by sufficient cause from lodging the appeal
within that period.
64. Procedure in appeal.– (1) The Commissioner (Appeals) shall give notice of the day
fixed for the hearing of the appeal to the appellant and to the officer of the Authority against
whose order the appeal has been made.
(2) The Commissioner (Appeals) may adjourn the hearing of the appeal from time to
time.
(3) The Commissioner (Appeals) may, before the hearing of an appeal, allow the
appellant to file any new ground of appeal not specified in the grounds of appeal already filed
by the appellant where the Commissioner (Appeals) is satisfied that the omission of the
ground from the form of the appeal was not willful or unreasonable.
(4) The Commissioner (Appeals) may stay the recovery of any tax due by virtue of the
decision or order being appealed against and any such order made by the Commissioner
(Appeals) shall remain operative for not 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 not 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.
(5) The Commissioner (Appeals) may, before disposing of an appeal, call for such
particulars, documents, records or information as the Commissioner (Appeals) may require
respecting the matters arising in the appeal or cause further inquiry to be made by the officer
of the Authority.
65. Decision in appeal.– (1) In disposing of an appeal lodged under section 63, the
Commissioner (Appeals) may pass such order as he thinks fit, confirming, varying, altering,
setting aside or annulling the decision or order appealed against.
(2) In deciding an appeal, the Commissioner (Appeals) may make such further inquiry as
may be necessary provided that he shall not remand the case for de novo consideration.
1
Substituted by the Punjab Finance Act 2020 (VIII of 2020), for the following, effective from 1st July 2020:
“(4) An appeal shall be preferred to the Commissioner (Appeals) within thirty days of the receipt of the decision or order passed
under section 60.”
46 The Punjab Laws
(3) The Commissioner (Appeals) shall not increase the amount of any tax payable by the
appellant unless the appellant has been given an opportunity of showing cause against such
increase.
(4) The Commissioner (Appeals) shall communicate his order to the appellant and the
Authority.
(5) An order passed by the Commissioner (Appeals) under sub-section (1) shall be passed
not later than one hundred and twenty days from the date of filing of appeal or within such
extended period, not exceeding sixty days, as the Commissioner (Appeals) may, for reasons
to be recorded in writing, fix.
(6) In computing the aforesaid time period, any period during which the proceedings are
adjourned on account of a stay order or proceedings under section 69 or the time taken
through adjournments by the appellant shall be excluded.
1
[(7) * * * * * * * * * *]
2
[(8) * * * * * * * * * *]
(9) For purposes of sub-section (5), any period during which the hearing of an appeal is
adjourned on the request of the appellant shall be excluded in the computation of the period
mentioned in the sub-section.
66. Appeal to the Appellate Tribunal.– 3[(1) Any person including an officer of the
Authority not below the rank of an Additional Commissioner, aggrieved by any order passed
by the:
(a) Commissioner (Appeals) under subsection (4) of section 64 or section 65;
(b) Commissioner through adjudication under section 60 or 61; or
(c) Authority under section 62,
may, within 4[sixty] days of the receipt of such decision or order, prefer an appeal to the
Appellate Tribunal.]
(2) An appeal under sub-section (1) shall be–
(a) in the prescribed form;
(b) verified in the prescribed manner; 5[and]
(c) accompanied, except in case of an appeal preferred by an officer by the fee
specified in sub-section (3) 6[.]
7
[* * * * * * * * ** * * * * * * * *]
(3) The fee for an appeal shall be two thousand rupees.
1
The following subsection (7) omitted by the Punjab Finance Act 2021 (XIX of 2021), effective from 1st July 2021:
“(7) Where the Commissioner (Appeals) has not made an order under sub-section (1) before the expiration of one hundred and
eighty days from the end of the month in which the appeal was lodged, the Commissioner (Appeals) shall transfer his appeal to
the Appellate Tribunal and the Tribunal shall decide the appeal under this Act as if it has been filed against the order of the
Commissioner (Appeals).”
2
The following subsection (8) omitted by the Punjab Finance Act 2021 (XIX of 2021), effective from 1st July 2021:
“(8) While transferring the undecided appeal to the Appellate Tribunal, the Commissioner (Appeals) shall attach his
comprehensive report explaining the circumstances and reasons due to which the appeal could not be decided within time.”
3
Substituted by the Punjab Finance Act 2019 (XV of 2019) for the following:
“(1) Where the taxpayer or the officer not below the rank of Additional Commissioner objects to any order passed by the
Commissioner (Appeals), including an order under sub-section (4) of section 64, the taxpayer or the officer may appeal to the
Appellate Tribunal against such order.”
4
Substituted for the word “thirty” by the Punjab Finance Act 2020 (VIII of 2020), effective from 1st July 2020.
5
Inserted by the Punjab Finance Act 2020 (VIII of 2020), effective from 1st July 2020.
6
Substituted for the expression “; and” by the Punjab Finance Act 2020 (VIII of 2020), effective from 1st July 2020.
7
The following clause omitted by the Punjab Finance Act 2020 (VIII of 2020), effective from 1st July 2020:
“(d) preferred to the Appellate Tribunal within sixty days of the date of receipt of the order of the Commissioner (Appeals) by
the taxpayer or the officer.”
The Punjab Sales Tax on Services Act 2012 (XLII of 2012) 47
(4) The Appellate Tribunal may, upon application in writing, admit an appeal after the
expiration of the period specified in 1[subsection (1)] if it is satisfied that the person
appealing was prevented by sufficient cause from filing the appeal within that period.
67. Disposal of appeals by the Appellate Tribunal.– (1) The Appellate Tribunal may,
before disposing of an appeal, call for such particulars, documents, records or information as
it may require in respect of the matters arising from the appeal or cause further inquiry to be
made by the officer of the Authority.
(2) The Appellate Tribunal shall afford an opportunity of being heard to the parties to the
appeal and, in case of default by any of the parties on the date of hearing, the Tribunal may, if
it deems fit, dismiss the appeal in default, or may proceed ex-parte to decide the appeal on
the basis of the available record but the Appellate Tribunal shall decide the appeal within six
months from the date of filing of the appeal.
(3) The Appellate Tribunal may stay the recovery of any tax due by virtue of the decision
or order being appealed against and any such order made by the Appellate Tribunal shall
remain operative for no more than thirty 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 Appellate Tribunal deems fit but the stay order so confirmed or
varied shall remain operative for not more than ninety days including any period for which
the recovery may have been stayed prior to the confirmation or variation of the stay order.
(4) In deciding the appeal, the Appellate Tribunal may, without prejudice to the powers
specified in sub-section (2), make an order to–
(a) affirm, modify or annul the order being appealed against; or
(b) remand the case to the officer or the Commissioner (Appeals) for making such
inquiry or taking such action as the Tribunal may direct.
(5) The Appellate Tribunal shall not increase the amount of any tax payable, penalty or
default surcharge unless the taxpayer has been given a reasonable opportunity of showing
cause against such increase.
(6) The Appellate Tribunal shall communicate its order to the taxpayer and the
Commissioner.
(7) Save as provided in any other law, the decision of the Appellate Tribunal on an appeal
shall be final.
2
[67A. Reference to the High Court.– (1) A reference to the High Court shall lie only if a
question of law is involved in a case.
(2) Notwithstanding anything contained in section 67, a taxpayer or the officer not below
the rank of Additional Commissioner, aggrieved by any decision or order of the Appellate
Tribunal may, within sixty days of communication of such decision or order, prefer a
reference, in the prescribed form, along with a statement of the facts of the case and the
question of law involved in that case to the Lahore High Court Lahore.
(3) The reference under this section shall be heard by a Bench of at least two Judges of
the High Court and the provisions of section 98 of the Code of Civil Procedure 1908 (V of
1908) shall apply mutatis mutandis to such reference.
(4) The High Court shall send a copy of its judgment under the seal of the Court to the
Appellate Tribunal.
1
Substituted for the expression “clause (d) of sub-section (2)” by the Punjab Finance Act 2020 (VIII of 2020), effective from 1st July 2020.
2
Inserted new Section by the Punjab Finance Act 2018 (XXX of 2018); effective from 1st November 2018.
48 The Punjab Laws
(5) Notwithstanding a reference preferred in the High Court under this section, the tax
shall be paid in accordance with the order of the Appellate Tribunal.
(6) If the tax liability is reduced by the High Court and the Authority decides to seek
leave to appeal to the Supreme Court, the Authority may, within thirty days of the receipt of
the judgment in the reference, apply to the High Court to postpone the refund of tax until the
decision by the Supreme Court.
(7) Section 5 of the Limitation Act 1908 (IX of 1908) shall apply to a reference under this
section.
(8) A court fee of rupees one thousand shall be paid for a reference under this section
except when it is filed by the Authority.]
68. Deposit of the tax demand while appeal is pending.– Where in any appeal, the decision
or order appealed against relates to any tax demanded under this Act, the person who has
filed the appeal shall, pending the appeal, deposit the admitted amount of the tax based on the
return filed under section 35 or as may be determined by the Commissioner (Appeals) or the
Appellate Tribunal where such return has not been filed.
69. Alternate dispute resolution.– (1) Notwithstanding any other provisions of this Act or
the rules, any registered person aggrieved in connection with any dispute pertaining to–
(a) the liability of the tax against the registered person;
(b) the extent of waiver of default surcharge and penalty;
(c) relaxation of any procedural or technical irregularities and condonation of any
prescribed time limitation; and
(d) any other specific relief required to resolve the dispute, may apply to the Authority for
the appointment of a committee for the resolution of any dispute mentioned in detail
in the application.
(2) Notwithstanding anything contained in sub-section (1), the Authority shall not accept
an application under sub-section (1) where criminal proceedings have been initiated or where
the Authority is of the opinion that the interpretation of a question of law having a larger
impact on revenue or on a number of similar cases is involved.
(3) The Authority may, after examination of the application of a registered person,
appoint a committee of not less than three persons within thirty days of receipt of such
application, consisting of an officer of the Authority not below the rank of an Additional
Commissioner and nominees from the notified panel consisting of chartered or cost
accountants, advocates, representatives of trade bodies or associations, retired officers of the
rank of not less than BS-20, retired judges, or any other reputable taxpayers, for the
resolution of the dispute.
(4) The committee constituted under sub-section (3) shall examine the issue and may, if it
deems fit, conduct an inquiry, seek expert opinions, direct any officer of the Authority or any
other person to conduct an audit and shall make recommendations to the Authority within
ninety days of its constitution in respect of the dispute.
(5) If the committee fails to make recommendations within the said period, the Authority
may dissolve the committee and constitute a new committee which shall decide the matter
within a further period of ninety days and even if after the expiry of that period the dispute is
not resolved, the matter shall be taken up before the appropriate forum provided under this
Act for decision.
The Punjab Sales Tax on Services Act 2012 (XLII of 2012) 49
(6) The Authority may, on the recommendation of the committee, pass such order, as it
may deem appropriate within forty-five days of the receipt of the recommendations of the
committee.
(7) The registered person may make payment of the tax as determined by the Authority in
its order under sub-section (6), and such order of the Authority shall be submitted before the
forum, Appellate Tribunal or the Court where the matter is pending adjudication for
consideration of orders as deemed appropriate.
CHAPTER X
RECOVERY OF ARREARS
70. Recovery of arrears of tax.– (1) Subject to sub-section (2), where any amount of the tax is
due from any person, the officer of the Authority 1[appointed under section 39] may–
(a) deduct the amount from any money owing to the person from whom such amount is
recoverable and which may be at the disposal or in the control of such officer or any
officer of the Authority;
(b) require by a notice in writing any person who holds or may subsequently hold any
money for or on account of the person from whom tax is recoverable to pay to such
officer the amount specified in the notice;
2
[(bb) require by a notice in writing payment of money owed to a taxpayer by any person
on account of legally enforceable relations created between the taxpayer and the other
person including but not limited to purchase contracts, contracts with credit or
financial institutions or with banking companies 3[including running and demand
finance], lease contracts, loan agreements, building loan contracts, life insurance
contracts, employment or work contracts;]
(c) require by a notice in writing any bank to attach that person‟s bank accounts 4[and
recover the amount payable or recover such amount without attachment];
(d) seal the person‟s business premises till such time as the amount of the tax is paid or
recovered in full;
(e) attach and sell or sell without attachment any movable or immovable property of the
person from whom the tax is due; and
(f) recover such amount by attachment and sale of any movable or immovable property
of the guarantor, person, company, bank or financial institution where a guarantor or
any other person, company, bank or financial institution fails to make payment under
5
such guarantee, bond or instrument [:]
6
[(g) arrest or cause to arrest a defaulter and cause his detention in prison for a period not
exceeding six months subject to the condition that the adjudged amount has been
upheld by the Appellate Tribunal.]
7
[Provided that no action shall be taken against the person during the pendency of the
appeal, if any, under section 63 of the Act if he deposits at least 8[ten] per cent the amount of
the tax demanded from him.]
(2) If any arrears of tax, default surcharge, penalty or any other amount which is payable
by any person cannot be recovered in any manner whatsoever, the Authority or the
1
Inserted by the Punjab Finance Act 2016 (XXXV of 2016).
2
Inserted by the Punjab Finance Act 2017 (XII of 2017).
3
Inserted by the Punjab Finance Act 2020 (VIII of 2020), effective from 1st July 2020.
4
Inserted by the Punjab Finance Act 2019 (XV of 2019).
5
Substituted for the full-stop by the Punjab Finance Act 2017 (XII of 2017).
6
Inserted by the Punjab Finance Act 2020 (VIII of 2020), effective from 1st July 2020.
7
Added by the Punjab Finance Act 2017 (XII of 2017).
8
Substituted for the words “twenty five” by the Punjab Finance Act 2020 (VIII of 2020), effective from 1st July 2020.
50 The Punjab Laws
Commissioner if so authorized by the Authority, may for reasons to be recorded in writing
write off the arrears or amount in the manner in the prescribed manner.
1
[(3) For the purpose of recovery of tax, penalty or any other demand or sum under this
Act or the rules, the Authority or the officer of the Authority may exercise the powers of a
Civil Court under the Code of Civil Procedure, 1908 (V of 1908) for recovery of an amount
due under a decree and, in such an eventuality, the Authority or the officer of the Authority
shall be deemed to be a Civil Court.]
CHAPTER XI
AGENTS, REPRESENTATIVES AND E-INTERMEDIARIES
71. Agent.– (1) For purposes of this Act and subject to sub-sections (2) and (3), the
expression „agent‟ in respect of a registered person, means–
(a) where the person is an individual under a legal disability, the guardian or manager
who receives or is entitled to receive income, financial gains or benefits, funds,
money or property on behalf, or for the benefit of, the individual;
(b) where the person is a company (other than a Trust, a Provincial Government, or local
authority in Pakistan), a director or a manager or secretary or accountant or any similar
officer of the company;
(c) where the person is a Trust declared by a duly executed instrument in writing, whether
testamentary or otherwise, any trustee of the trust;
(d) where the person is a Provincial Government, or local authority in Pakistan, any
individual responsible for accounting for the receipt and payment of money or funds
on behalf of the Provincial Government or the local authority;
(e) where the person is an association of persons, a director or a manager or secretary or
accountant or any similar officer of the association or, in the case of a firm, any
partner in the firm;
(f) where the person is the Federal Government, any individual responsible for
accounting for the receipt and payment of moneys or funds on behalf of the Federal
Government; or
(g) where the person is a public international organization, or a foreign government or
political sub-division of a foreign government, any individual responsible for
accounting for the receipt and payment of moneys or funds in Pakistan on behalf of
the organization, government, or political subdivision of the government; or
(h) when any person is expressly or impliedly authorized by a registered person to be his
agent for all or any of the purposes of this Act.
(2) Where Court of Wards, Administrator General, Official Trustee, or any receiver or
manager appointed by, or under any order of a Court receives or is entitled to receive income
on behalf, or for the benefit of any person, such Court of Wards, Administrator General,
Official Trustee, receiver or manager shall be the agent of the person for purposes of this Act.
(3) Notwithstanding anything in this section, any registered person may expressly or
impliedly authorize another person to be his agent for all or any of the purposes this Act.
72. Liability and obligations of agents.– (1) Every agent of a person shall be responsible for
performing any duties or obligations imposed by or under this Act and the rules on the person,
including the payment of the tax.
1
Inserted by the Punjab Finance Act 2014 (XVII of 2014).
The Punjab Sales Tax on Services Act 2012 (XLII of 2012) 51
(2) Subject to sub-section (5) of this section, the tax that by virtue of sub-section (1), is
payable by an agent of a registered person shall be recoverable from the agent only to the extent
of any assets of the registered person that are in the possession or under the control of the agent.
(3) Every agent of a registered person who pays any tax owing to the registered person
shall be entitled to recover the amount so paid from the registered person or to retain the
amount so paid out of any moneys of the registered person that are in the agent‟s possession
or under the agent‟s control.
(4) Any agent, or any person who apprehends that he may be assessed as an agent, may
retain out of any money payable by him to the person on whose behalf he is liable to pay the
tax (hereinafter in this section referred to as the „principal‟), a sum equal to his estimated
liability under this Act, and in the event of disagreement between the principal and such an
agent or a person as to the amount to be so retained, such agent or person may obtain from
the Commissioner a certificate stating the amount to be so retained pending final
determination of the tax liability and the certificate so obtained shall be his conclusive
authority for retaining that amount.
(5) Every agent shall be personally liable for the payment of any tax due by the agent if,
while the amount remains unpaid, the agent–
(a) alienates, charges or disposes of any moneys received or accrued in respect of
which the tax is payable; or
(b) disposes of or parts with any moneys or funds belonging to the registered person
that is in the possession of the agent or which comes to the agent after the tax is
payable, if such tax could legally have been paid from or out of such moneys or
funds.
(6) Nothing in this section shall relieve any person from performing any duties imposed
by or under this Act on the person which the agent of the person has failed to perform.
73. Liability of the registered person for the acts of his agent.– A registered person shall be
responsible for any and all acts done by his agent.
74. Appearance by authorized representative.– A registered person required to appear
before the Appellate Tribunal or an officer in connection with any proceedings under this Act
may, in writing, authorize any person having such qualification as may be prescribed by the
Authority, to represent him or appear on his behalf.
75. E-intermediaries to be appointed.– (1) Subject to such conditions, limitations and
restrictions as the Authority may impose, the Authority may, by a notification in the official
Gazette, appoint a person as e-intermediary to electronically file returns and other electronic
documents under this Act and the rules on behalf of a registered person.
(2) A registered person may authorize an e-intermediary to electronically file returns or
any other documents on his behalf as specified in sub-section (1).
(3) The return or such other documents filed by an e-intermediary on behalf of a
registered person shall be deemed to have been filed by that registered person.
(4) Where this Act requires anything to be done by a registered person and if such thing is
done by an e-intermediary authorized by the registered person under sub-section (2), unless
the contrary is proved, such thing shall be deemed to have been done with the knowledge and
consent of the registered person so that in any proceedings under this Act, the registered
person shall be liable as if the thing has been done by him.
52 The Punjab Laws
(5) Where an e-intermediary, authorized by a registered person under sub-section (2) to act
on his behalf, knowingly or willfully submits false or incorrect information or document or
declaration with an intent to avoid payment of the tax due or any part thereof, such e-
intermediary shall be jointly and severally responsible for recovery of the amount of tax short
paid as a result of such incorrect or false information or document or declaration, without
prejudice to any other action that may be taken against him or the registered person under the
relevant provisions of the law.
(6) The Authority may, by notification in the official Gazette, prescribe rules for the
conduct and transaction of business of e-intermediaries, including their appointment,
suspension and cancellation of appointment, subject to such conditions and restrictions as
specified in such rules.
CHAPTER XII
GENERAL ADMINISTRATION
76. Power to make rules.– (1) The Authority may, with the approval of the Government and
by notification in the official Gazette, make the rules for carrying out the purposes of any of
the provisions of this Act.
(2) All rules made under sub-section (1) during a financial year shall be laid in Provincial
Assembly of the Punjab at the time of presentation of the Annual Budget for the next
financial year.
(3) The rules made under this Act shall be collected, arranged and published along with
general orders and departmental instructions, directions, notifications and rulings, if any, at
appropriate intervals and sold to the public at a reasonable price.
1
[76A. Power to restrain certain authorities.– The Authority may, with the approval of the
Government and by notification in the official Gazette, require that any authority competent
to issue or renew a license or to grant permission to any person to engage in an economic
activity which is a taxable service, shall not issue or renew such license or grant permission
unless the licensee or the grantee furnishes the evidence that he is a duly registered person
under section 25, section 26 or section 27 of the Act.]
77. Computerized system.– (1) The Authority may prescribe the use of a computerized system
for carrying out the purposes of this Act and the rules including the receipt of applications for
registration, returns and such other declarations or information required to be provided under
this Act and the rules from such date and for such registered persons or class of persons as the
Authority may, by notification in the official Gazette, specify.
(2) The Authority may regulate the conduct and transaction of business in relation to the
submission of returns or other information to the Authority by the persons required to transmit
or receive any information through the computerized system, including matters such as the
grant of authorization, suspension and cancellation of authorization and for security of the
information transmitted or received through the computerized system.
(3) The information received in the computerized system from or on behalf of any registered
person shall, for all official and legal purposes, be deemed to have been furnished by and received
from such registered person.
(4) The business information gathered through computerized system shall be confidential
to be used only for official and legal purposes and no unauthorized person shall claim or be
provided any access to such information.
1
Inserted by the Punjab Finance Act 2017 (XII of 2017).
The Punjab Sales Tax on Services Act 2012 (XLII of 2012) 53
78. Service of orders and decisions.– (1) Subject to this Act, any notice, order or requisition
required to be served on an individual for the purposes of this Act shall be treated as properly
served on the individual if–
(a) personally served on the individual or, in the case of an individual under a legal
disability the agent of the individual;
(b) sent by registered post or courier service to the individual‟s usual or last known
address in Pakistan; or
(c) served on the individual in the manner prescribed for service of a summons under the
Code of Civil Procedure, 1908 (V of 1908).
(2) Subject to this Act, any notice order or requisition required to be served on any
person, other than an individual to whom sub-section (1) applies, for the purposes of this Act,
shall be treated as properly served on the person if–
(a) personally served on the agent of the person;
(b) sent by registered post or courier service to the person‟s registered office or
address for service of notices under this Act in Pakistan or where the person does
not have such office or address, the notice is sent by registered post to any office
or place of business of the person in Pakistan; or
(c) served in the manner prescribed for service of a summons under the Code of Civil
Procedure, 1908 (V of 1908).
(3) Where an association of persons is dissolved, any notice, order or requisition required
to be served under this Act, on the association or a member of the association may be served
on any person who was the principal officer or a member of the association immediately
before such dissolution.
(4) Where a business stands discontinued, any notice order or requisition required to be
served under this Act, on the person discontinuing the business may be served on the person
personally or on any individual who was the person‟s agent at the time of discontinuance.
(5) The validity of any notice issued under this Act or the validity of any service of a
notice shall not be called into question after the notice has been complied with in any manner.
(6) Any registered person may indicate, in the manner prescribed by the Authority, that he
wishes to electronically receive all or specific communications, including notifications, orders,
assessments and requisitions from the Authority, the Appellate Tribunal or any officer of the
Authority.
(7) The Authority may, by notification in the official Gazette, direct that all or specific
1
communications, including notifications, orders, assessments and requisitions [including
notices and show cause notices] from the Authority, the Appellate Tribunal or any officer to a
specific registered person or class of registered persons shall be made electronically.
(8) For purposes of sub-sections (6) and (7), a registered person shall be considered to
have received the electronic communication within seventy two hours of the sending of the
electronic communication by the Authority, Appellate Tribunal or the officer of the
Authority.
(9) For purposes of sub-sections (6), (7) and (8), an electronic communication includes a
communication sent by email.
79. Correction of clerical errors.– (1) Any clerical or arithmetical error in any assessment,
adjudication order or decision may, at any time, be corrected by the officer of the Authority
1
Inserted by the Punjab Finance Act 2017 (XII of 2017).
54 The Punjab Laws
who made the assessment or adjudication or passed such order or decision or by his successor
in office, through an order made under this section.
(2) Before any correction is made under sub-section (1), a notice shall be given to the
registered person likely to be affected by such correction.
80. Issuance of duplicate of the tax documents.– An officer of the Authority not below the
rank of the Assistant Commissioner may, on payment of one hundred rupees, issue an
attested copy of any document filed by a registered person with the Authority.
81. Power to issue orders, instructions and directions.– The Authority may issue such
orders, instructions and directions, not inconsistent with this Act and the rules, to all officers of
the Authority, as it may deem necessary to implement, administer or enforce the provisions of
this Act and the rules.
82. Officers of the Authority to follow orders.– (1) All officers of the Authority and other
persons employed in the administration of this Act and the rules shall observe and follow the
orders, instructions and directions of the Authority.
(2) No such orders, instructions or directions shall be given so as to interfere with the
powers or discretion of officers of the Authority in the exercise of their judicial or quasi-
judicial functions.
CHAPTER XIII
MISCELLANEOUS
83. Computation of limitation period.– In computing the period of limitation prescribed for
any appeal or application under this Act, the day on which the order complained of was
served and, if the concerned person was not furnished with a copy of the order, the time
requisite for obtaining a copy of such order shall be excluded.
84. Condonation of time-limit.– (1) Where any time or period has been specified under any
of the provisions of the Act or the rules within which any act or thing, including submission
of an application, filing of a return or payment of tax, is to be done, the Authority may permit
such application to be made or such act or thing to be done within such time or period as it
may consider appropriate.
1
[Explanation.– The expression “act or thing to be done” includes an act or thing to be
done by a registered person or by an authority specified in section 39 of the Act.]
(2) The Authority may, by notification in the official Gazette, and subject to such
limitations or conditions as may be specified therein, empower any Commissioner or the
officer of the Authority to exercise the powers under this section in any case or class of cases.
85. Bar of suits, prosecution and other legal proceedings.– (1) No suit shall be brought in
any civil court to set aside or modify any order passed, any assessment made, any tax levied,
any penalty or default surcharge imposed or collection of any tax made under this Act.
(2) No suit, prosecution or other legal proceeding shall lie against the Government or
against any public servant in respect of any order passed in good faith under this Act.
(3) Notwithstanding anything in any other law, no investigation or inquiry shall be
undertaken or initiated by any government agency against any officer or official for anything
done in his official capacity under this Act, except with the permission of the Authority.
1
Added by the Punjab Finance Act 2017 (XII of 2017).
The Punjab Sales Tax on Services Act 2012 (XLII of 2012) 55
86. Removal of difficulties.– (1) The Government may pass such order for removing any
difficulty or for bringing the provisions of this Act into effective operation direct that
provisions of this Act shall, during such period as may be specified in the order, have effect
subject to such adaptations whether by way of modification or addition or omission as it may
deem to be necessary or expedient.
(2) The power under this section shall not be exercised after the expiry of two years from
the commencement of this Act.
87. Repeal and savings.– (1) The Punjab Sales Tax Ordinance, 2000 (II of 2000) is hereby
repealed.
(2) Any proceeding under the repealed Ordinance pending on the date notified under sub-
section (3) of section 1 before any authority, forum or any court by way of adjudication,
assessment, appeal, reference, revision or prosecution shall be continued and disposed of as if
this Act has not come into force.
(3) Where the Government or the Authority takes any action, makes any decision or orders,
issues any instructions, directions, clarifications or notifications in pursuance of or in exercising
of powers conferred under any provision of any law in respect of any matter relating to the tax
and allied issues covered under this Act or the rules, such actions, decisions, orders,
instructions, directions, clarifications and notifications shall be deemed to have been validly
issued to serve the purposes of this Act and the rules.
(4) Where so directed by the Government, any tax payable but not paid under the Punjab
Sales Tax Ordinance, 2000 (II of 2000) may be recovered under this Act, but without
prejudice to any action already taken for the recovery of the amount under the said
Ordinance.
1
[88. Prize schemes to promote tax culture.– The Authority may, with the approval of the
Government, prescribe prize schemes to encourage the general public to make purchases only
from registered persons issuing tax invoices.]
2
[89. Reward to whistleblowers.– (1) The Authority may, with the approval of the
Government, sanction reward to a whistleblower.
(2) The Authority may, by notification, prescribe the procedure in this behalf and also
specify the apportionment of reward sanctioned under this section for a whistleblower.
(3) The claim for reward by the whistleblower shall be rejected if–
(a) the information provided is of no value;
(b) the Authority already had the information;
(c) the information was available in public records; or
(d) no collection of tax is made from the information provided by a
whistleblower.
(4) Where, after providing an opportunity of being heard, it is found that a
whistleblower has provided false, misleading or frivolous information, he shall be liable to a
penalty of one hundred thousand rupees.
(5) In this section, „whistleblower‟ means a person who reports concealment or
evasion of tax or tax fraud leading to detection or collection of the tax.]
1
New section 88 inserted by the Punjab Finance Act 2015 (XXIX of 2015).
2
New section 89 inserted by the Punjab Finance Act 2015 (XXIX of 2015).
56 The Punjab Laws
1
[FIRST SCHEDULE
Tax Free Services
(see section 3A)
S/N Description Conditions
(1) (2) (3)
Services related to healthcare provided by the Federal
or Provincial Governments or local governments
1. including consultation or visit fee of doctors, medical None
practitioners and medical specialists, bed or room
charges, in public sector hospitals.
Services provided by skin and laser clinics, cosmetic and
Only to the extent of services provided to
2. plastic surgeons and hair transplant services including
acid or burn victims.
consultation services.
(i) General education services; and
(ii) Education provided by the Federal, or Provincial
3. None
Governments or local governments in public
sector educational institutions.
Public transport service provided by the Federal or
4. None
Provincial Governments or local Governments.
Only to the extent of services provided to
Postal and courier services provided by the Federal or
5. the Federal, Provincial Government
Provincial Governments or local governments.
Departments or local governments.
Registration services provided by Federal or Provincial
6. Governments or local governments including passport None
and identity cards services
Services relating to religion, art, culture and sports
7. provided by the Federal or Provincial Governments or None
local governments
Services relating to physical fitness, entertainment,
amusement and learning provided by the Federal or
8. Provincial Governments or local governments, such as None
gymnasiums, sports clubs, playgrounds, zoological and
botanical gardens, museums, libraries, parks, etc.
Only to the extent of affordable housing
services provided under Government
sponsored housing programs or any area
notified for an Affordable Private Housing
Services provided by property developers, builders and Scheme by the Punjab Housing and Town-
9.
promoters, including their allied services. Planning Agency (PHATA) covered under
Rule 2(1)(k), Rule 35 and Rule 36 of the
Punjab Housing and Town-Planning Agency
(Affordable Private Housing Schemes
Rules), 2020.
Services provided by:
(i) a religious or charitable institution for the benefit
of public registered under any law for the time
being in force; Subject to exemption from federal taxes by
10.
(ii) international non-governmental organizations the Federal Board of Revenue.
(INGOs) approved by the Federal Government;
and
(iii) international agencies.
Only to the extent of:
11. Services provided in respect of insurance. (a) marine insurance for export; and
(b) crop insurance.
1
Substituted by the Punjab Finance Act 2025 (LVIII of 2025), effective from 1st July 2025.
The Punjab Sales Tax on Services Act 2012 (XLII of 2012) 57
Only to the extent:
(i) where the tax is otherwise paid by
registered persons as property
developers, builders or promoters for
building construction; or
(ii) where the construction work is funded
under an agreement of foreign grant-
in-aid or involves construction of
Construction services and services provided by consular buildings; or
contractors of building (including water supply, gas (iii) residential construction projects where
supply and sanitary works), roads and bridges, electrical the covered area does not exceed
12.
and mechanical works (including air conditioning), 10,000 square feet for a house and
horticultural works, multi-discipline works (including 20,000 square feet for an apartment
turn-key projects) and similar other works. except where construction services
are provided to construct more than
one house or more than one apartment
building; or
(iv) where the construction services are
provided to any registered person
who is otherwise liable to pay sales
tax as a property developer, builder
and promoter.
Only to the extent of services provided in a
Services provided for personal care by beauty parlors, parlour, salon or clinic where the facility of
13. salons, clinics, sliming clinics, spas (including saunas, air-conditioning is not installed or is not
Turkish baths and Jacuzzi) and similar other services. available in the premises on any day of the
financial year.
Services provided by tour operators and travel agents Only to the extent of Hajj and Umrah
14.
including all their allied services or facilities. purposes including „Ziyarat‟.
Only to the extent of Air travel services
Facilities for travel originating from Punjab by Air for
15. provided to Hajj or Umrah passengers,
domestic and international travel.
diplomats and supernumerary crew.
Services provided by warehouses or depots for storage Only to the extent of storage of agriculture
16.
or cold storages including letting of space for storages. produce for the person‟s own consumption.
Only to the extent of non-corporate
Services provided by photography studios and event or (individual) photographers operating from
17.
occasion photographers or film-makers. small road-side shops declared as such by
the Authority.
18. Services provided by diplomatic missions. None
19. Renting of personal dwellings for residential use. None
Only to the extent of services related to the
Services provided by persons engaged in contractual
20. contracts involving supplies or printing of
execution of works or furnishing supplies.
books
Only to the extent of:
(a) sponsored by an agency of the
Federal or Provincial Government for
health education; or
Advertisement on television and radio or advertisement (b) financed out of funds provided by a
services showcasing of any product or service in video Government under an agreement of
21.
programmes, television programmes or motion pictures foreign grant-in-aid; or
or music albums. (c) conveying public service message, if
telecast on television by the World
Wide Fund for Nature (WWF) or
United Nations Children‟s Fund
(UNICEF).
Services relating to pathological or diagnostic tests
22. None
exclusively for medical treatment purposes.
58 The Punjab Laws
Services provided in respect of manufacturing or
processing on toll or job basis (against processing on
23. conversion charges) including industrial and commercial None
packaging services and similar outsourcing of industrial
or commercial processes.
Advertisement including classified ads in newspapers,
24. None
magazines, journals and periodicals.
Services provided by a foreign exchange dealer or
25. exchange company or money changer or money None
exchanger.
Services provided by port operators (including airports
Only to the extent of the amounts received
and dry-ports) and allied services provided at ports and
26. by way of fee under any law or bye-law.
services provided by terminal operators including
services in respect of public bonded warehouses.
SECOND SCHEDULE
(Taxable Services)
(see section 3)
Part I
S/N Description Classification Code, if Rate of Tax
Applicable
(1) (2) (3) (4)
1. All services, except those specified in Respective headings Sixteen percent
serial numbers 2 and 3 of this Part,
Part-II and Part-III.
2. Services provided by persons for 98.04 15% With input tax
carriage of goods by rail or road. 9804.20009804.9000 and adjustment for service
respective headings provider and service
recipient.
3. Telecommunication services: 98.12 Nineteen and a half
(a) telephone services; 9857.0000, 9858.0000 percent
(b) fixed line voice telephone service;
(c) wireless telephone;
(d) cellular telephone;
(e) wireless local loop telephone;
(f) video telephone;
(g) payphone cards;
(h) pre-paid calling cards;
(i) voice mail service;
(j) messaging service;
(k) short message service (SMS);
(l) multimedia message service
(MMS);
(m) bandwidth services used for voice
and video telecommunication
services:
(i) copper line based;
(ii) fiber-optic based;
(iii) co-axial cable based;
(iv) microwave based;
(v) satellite based;
(n) telegraph;
(o) telex;
(p) telefax;
(q) store and forward fax services;
(r) audio-text services;
The Punjab Sales Tax on Services Act 2012 (XLII of 2012) 59
(s) tele-text services;
(t) trunk radio services;
(u) paging services;
(v) voice paging services;
(w) radio paging services;
(x) vehicle and other tracking services;
and
(y) burglar and security alarm services;
(z) (i) internet services, whether dialup
or broadband, including email
services, data
communication network services
(DCNS) and value added data
services;
(ii) such charges payable on the
international leased lines or
bandwidth services used by:
(a) software exporting firms
registered with Pakistan
Software Export Board; and
(b) data and internet service
providers licensed by the
Pakistan Telecommunication
Authority; and
(iii) such charges payable on the
international leased lines used
by the software exporting firms
registered with Pakistan
Software Export Board for
software exports.
PART II
FIXED-TAXED SERVICES
The services enumerated below, shall be fixed rate, subject to the conditions, if any, specified
hereunder:
S/N Description Classification Rate of Tax
Code, if
Applicable
(1) (2) (3) (4)
9807.0000 and
Services provided by property developers, Rs.100 per square yard for land
respective sub-
1. builders and promoters (including their development and Rs.50 per square
headings of
allied services); feet for building construction.
heading 98.14
2. Freight forwarding agents. 9805.3000 Rs. 1000 per bill of lading
PART III
REDUCED RATE SERVICES
The services enumerated below, shall be reduced rate, subject to the conditions, if any,
specified hereunder:
Classification
S/N Description code, if Rate of tax
applicable
(1) (2) (3) (5)
1. Hotels, motels and guest houses 9801.1000 (i) Five percent without input tax
60 The Punjab Laws
adjustment for non-corporate, non-
franchise, non-chain businesses
with less than 20 rooms; and
(ii) Sixteen percent for others
Marriage halls and lawns (by whatever
name called) including pandal and
shamiana services.
9801.3000 Five percent without input tax
2. Catering services (including all
9801.5000 adjustment.
ancillary/allied services such as floral or
other decoration, furnishing of space
whether or not involving rental of
equipment and accessories).
Services provided in respect of insurance
to a policy holder by an insurer, including
(a) Zero percent without input tax
a re-insurer for:
adjustment for health insurance
(a) fire insurance;
for individuals; and
(b) goods insurance;
3. 98.13 (b) Five percent for insurance agents
(c) health insurance;
and insurance brokers;
(d) life insurance;
(c) Sixteen percent of gross
(e) marine insurance;
premium paid, for others.
(f) theft insurance; and
(g) any other insurance.
(a) Five percent without input tax
Services provided by restaurants adjustment where payment
including cafes, food (including ice- against services is received
cream) parlors, coffee houses, coffee 9801.2000 through debit or credit cards ,
4.
shops, deras, food huts, eateries, resorts 9801.9000 mobile wallets or QR scanning;
and similar cooked, prepared or ready-to- and
eat food service outlets etc. (b) Sixteen percent for others.
(a) Zero percent without input tax
adjustment for services relating to
educational institutions for
9823.0000 information technology; and
Franchise services including intellectual 9839.0000 (b) Five percent without input tax
5.
property rights and licensing and respective adjustment for services relating to
headings educational institutions other than
educational institutions for
information technology; and
(c) Sixteen percent for others.
Construction services and services provided
by contractors of building (including water
supply, gas supply and sanitary works),
roads and bridges, electrical and mechanical
works (including air conditioning),
horticultural works, multi-discipline works
(including turn-key projects) and similar five percent without input tax credit or
other works) adjustment in respect of Government
9824.0000 and
6. civil works and sixteen percent with
9814.2000
Explanation: Notwithstanding the rate of input tax credit or adjustment for others.
5% fixed in column 4, the following
further reduced rates shall be applicable:
(a) one per cent for all services specified
at S.No.14 without input tax
credit or adjustment to the extent
of Government civil works
including those of cantonment
The Punjab Sales Tax on Services Act 2012 (XLII of 2012) 61
boards involved in the ongoing
development schemes and
projects launched during
Financial Year 2016-17 and
funded under the Annual
Development Plan of the Punjab
Government or funded through
foreign loans where the
negotiations were finalized after
1st of July 2016 or funded under
Public Sector Development
Program of the Federal
Government or funded by the
Cantonment Boards; and
(b) zero per cent for all services
specified at S.No.14 without
input tax credit/adjustment to the
extent of Government civil works
including those of cantonment
boards involved in the ongoing
development schemes and
projects launched prior to
Financial Year 2016-17 and
funded under the Annual
Development Plan of the Punjab
Government or funded through
foreign loans where the
negotiations were finalized as on
1st of July 2016 or funded under
Public Sector Development
Program of the Federal
Government or funded by
Cantonment Boards.
9810.0000
9848.0000
Services provided for personal care by
9847.0000
beauty parlors, salons, clinics, sliming
9821.4000 Five percent without input tax
7. clinics, spas (including saunas, Turkish
9821.5000 adjustment.
baths and Jacuzzi) and similar other
9815.7000 and
establishments.
respective
headings
Information technology-enabled or
information technology based services
including software development,
software customization, software
maintenance, system support, system
assembly, system integration, system
(a) Zero percent without input tax
designing and architecture, system
adjustment for services provided
analysis, system development, system 9815.6000 and
by software or IT-based system
8. operation, system maintenance, system respective
development persons; and
up-gradation and modification, data heading
(b)Five percent without input tax
warehousing or management, data entry
adjustment for others.
operations, data migration or transfer,
system security or protection, web
designing, web development, web
hosting, network designing, services
relating to enterprise resource or
management planning (including
62 The Punjab Laws
marketing of products), development and
sale of smart phone applications or
games, graphics designing, medical
transcription, remote monitoring,
telemedicine, insurance claim processing,
online retrieval and database access or
retrieval service. Explanation: This
entry includes and shall be deemed to
have always included real estate
aggregators and streaming/over-the-top
(OTT) services.
Services provided by other consultants
(by whatever name called or treated,
whether as consultant or otherwise)
9815.9000
including human resource and personnel
9832.0000,
development services, exhibition or
9827.0000,
convention services including provision
9818.3000,
of space, equipment, accessories and
9818.2000,
other allied services, event management
9819.9300,
services (whole range and variety of their (a) Zero percent without input tax
9852.0000,
services regardless of separate or adjustment for training services
9859.0000,
9. individual classification thereof), related to Information
9825.0000,
valuation services, evaluation services Technology; and
9819.5000,
(including competency and eligibility (b) Sixteen percent for others.
9849.0000,
testing services), certification, verification
9818.9000,
and equivalence services, market research
9853.0000,
services, marketing or sales services
9856.0000 and
(including marketing agencies and on line
respective
marketing or sales services), surveyors
headings.
services, training or coaching services
(other than general education services)
and credit rating services.
Services provided by tour operators and 9805.5100,
Five percent without input tax
10. travel agents including all their allied 9805.5000,
adjustment.
services or facilities. 9803.9000.
(a) Five percent without input tax
adjustment for services where
Manpower recruitment agents, including the value of service is fixed by
11. 9805.6000
labour and manpower supplies. the Bureau of Emigration and
Overseas Employment; and
(b) Sixteen percent for others.
Services provided by property dealers 9806.2000, Five percent without input tax
12.
and realtors. 9844.0000. adjustment.
Services provided by fashion designers,
including use of brand name, logo or
house mark (whether or not registered) in
the manufacturing or trading of products 9834.0000,
whether relating to textile, leather, 9819.6000,
Five percent without input tax
13. jewellery or other product regimes 9839.0000 and
adjustment.
including allied services such as cutting, respective
stitching, printing, manufacturing, headings
fabrication, assembly, embellishment,
adornments, display (including marketing,
packing and delivery etc.)
Services provided by architects, town 9814.1000, Five percent without input tax
14. planners, landscapers, landscape 9814.9000, adjustment.
designers, interior decorators and interior 9814.4000 and
The Punjab Sales Tax on Services Act 2012 (XLII of 2012) 63
designers. respective
headings.
(a) Five percent without input tax
Rent-a-car (including renting of all 9819.3000 and
adjustment for services provided
15. categories of vehicles meant for respective
to end consumers; and
transportation of persons) headings
(b) Sixteen percent for others.
(a) Sixteen percent for services
provided by companies or
9806.3000
16. Car/automobile dealers authorized dealers; and
9845.0000
(b) Five percent without input tax
adjustment, for others.
9829.0000 (a) Five percent without input tax
Brokerage (other than stock) and 9819.1200 adjustment for services provided
17. indenting services including agents, 9819.1100 in respect of agricultural produce
brokers, under-writers and auctioneers 9819.1300 and home chefs; and
9819.9100 (b) Sixteen percent for others.
Services provided in specified fields such
as health care, gym, physical fitness, 9821.1000
Five percent without input tax
18. indoor sports, games, amusement parks, 9821.2000
adjustment.
arcades and other recreation facilities, and 9821.4000
body or sauna massage etc.
Services provided by Laundries and dry Five percent without input tax
19. 9811.0000
cleaners adjustment.
Five percent without input tax
20. Services provided by Cable TV operators 9819.9000
adjustment.
Services in relation to supply of tangible
goods including machinery, equipment
and appliances for use, without Respective Five percent without input tax
21.
transferring right of possession and headings adjustment.
effective control of such machinery,
equipment and appliances.
Services provided by accountants
9815.2000
(including practicing chartered or cost
9815.3000 (a) Five percent without input tax
accountants), auditors, actuaries, tax
9850.0000 adjustment for services relating to
consultants (by whatever name called),
22. 9851.0000 accountancy, audit, tax or
practicing company secretaries, receivers,
9855.0000 and corporate law consultancy; and
liquidators, auctioneers and corporate law
respective (b) Sixteen percent for others.
consultants, whether individual or
headings
otherwise.
Facilities for travel originating from
9803.1000 Five percent without input tax
23. Punjab by Air for domestic and
9803.1100 adjustment.
international travel.
Services provided by skin and laser
9847.0000 and
clinics, cosmetic and plastic surgeons Five percent without input tax
24. respective
and hair transplant services including adjustment.
headings
consultation services.
Services provided by warehouses or 9833.0000 and
Five percent without input tax
25. depots for storage or cold storages respective
adjustment.
including letting of space for storages. headings
(i) Medical consultation/visit fee
exceeding Rs.1500 per
consultation/visit of doctors, medical 9815.1000 and
Zero percent without input tax
26. practitioners and medical specialists other Respective
adjustment.
(ii) Bed/Room charges of hospitals headings
exceeding Rs.6,000/- per day per
bed/room.
27. Services provided by photography 9819.7000 and Five percent without input tax
64 The Punjab Laws
studios and event or occasion respective adjustment.
photographers/film-makers. headings
Respective Five percent without input tax
28. Parking services
headings adjustment.
Respective Five percent without input tax
29. Dress designing and stitching services.
headings adjustment.
Rental of bulldozers, excavators, cranes,
construction equipment, Scaffolding,
Five percent without input tax
30. framework and shuttering, generators, Respective heading
adjustment.
storage containers, Refrigerator, shelf or
rack renting, etc
Services in respect of treatment of
textile, leather but not limited to Dyeing
services, Edging and cutting, cloth
treating, water proofing, Embroidery,
Five percent without input tax
31. Engraving, Fabric bleaching, Knitting, Respective heading
adjustment.
Leather staining, Leather working, Pre
shrinking, Colour separation services,
pattern printing and shoe making
services.
Apartment house management, real
Five percent without input tax
32. estate management and services of rent Respective heading
adjustment.
collection.
Ride-Hailing Services Explanation:
Five percent without input tax
33. This entry includes and shall be deemed Respective heading
adjustment.
to have always included cab aggregators.
Entertainment services (including cinemas,
theatres, concerts, circus, sports events,
Zero percent without input tax
34. races, film, fashion shows and mobile stage
adjustment.]
shows)
Source: Pakistan Code, Ministry of Law and Justice (pakistancode.gov.pk). Text on this page is reproduced verbatim from the official PDF and is provided for reference only. For the authoritative version, always consult the source document or a current reported edition.
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