Overview of Punjab Sales Tax on Services (PSTS)
The Punjab Revenue Authority (PRA) regulates and collects sales tax on taxable services rendered, provided, or consumed in the province of Punjab under the Punjab Sales Tax on Services Act 2012. Any business providing taxable services in Punjab or receiving services from non-resident providers must register and comply with PRA regulations.
Who Qualifies as a Withholding Agent Under PRA?
Under the Punjab Sales Tax on Services Withholding Rules, the following entities are designated as withholding agents required to deduct sales tax at source:
- Offices of the Federal, Provincial, or Local Governments in Punjab
- Autonomous bodies, statutory corporations, and state-owned enterprises
- Companies incorporated under the Companies Act 2017 operating within Punjab
- Recipients of services provided by unregistered service providers
- FBR-registered sales taxpayers on goods who procure services
Standard PRA Withholding Rates & Summary
| Service Classification | Standard PRA Tax Rate | Withholding Obligation |
|---|---|---|
| IT & Software Services | Exempt / Concessional (Subject to conditions) | Deduct as per applicable schedule |
| Management Consultancy & Professional Services | 16% | Deduct full / prescribed rate if unregistered |
| Advertisement & Media Services | 16% | Full withholding from total invoice value |
| Security & Janitorial Services | 16% | Deduct 100% of the sales tax amount |
| Construction & Works Contracts | 5% without input / 16% with input | Deduct as specified in Schedule II |
Monthly PRA Compliance Schedule
- 15th of Every Month: Payment of sales tax collected and withheld during the preceding month via e-Challan (PSID) to the National Bank of Pakistan / designated banks.
- 18th of Every Month: Online submission of the monthly sales tax return on the official PRA Portal.
- Annual Reconciliation: Annual reconciliation of PRA withholding statements with financial audit reports.
Need Expert Support? Altaf Hussain & Co. assists businesses with PRA registration, e-filing, withholding tax compliance audits, and responding to PRA show-cause notices. Contact our tax team for dedicated advisory.
FBR