LAHORE: The Punjab government has cut GST on construction services from 16 per cent to 5pc as well as merged separately charged CVT, stamp duty and registration fee on properties to facilitate customers.
The government has withdrawn exemption given in sales tax on internet services worth Rs1,500 and above packages. However, the exemption on internet packages under Rs1500, primarily being used by students, will continue as such.
The Punjab government has also abolished exemption on GST in furnishing supply contracts to bring in the tax net all companies and firms concerned.
The government was earlier giving exemption on furnishing supply contracts up to Rs50 million. However, the companies and firms involved in the furnishing supply contracts were evading taxes by splitting their bills below the ceiling of Rs50 million.
The government has also abolished the registration fee for all new business firms.
The exemptions and reduction on sales tax on various services have been introduced in the Punjab Finance Bill 2017 announced by the provincial finance minister Dr Ayesha Ghaus Pasha soon after her budget speech in the Punjab Assembly. The finance bill will come into force from July 1, this year.
With a mindset that no new taxes be imposed but widen the tax net, the Punjab government has enhanced its provincial revenue target from current fiscal’s Rs280 billion to Rs348.3bn for the next 2017-18 financial year. Under the direct taxes head, the government aims at collecting Rs230.98 billion as compared to this year’s target of Rs184.4 billion. Under non-tax revenue head, the government aims at collecting Rs117bn as compared to current fiscal’s Rs95bn.
The government has slashed 11pc GST on construction services, hoping that underreporting in the construction sector will be minimised and would bring in some Rs3bn more tax revenue.
