KARACHI: The services provided or rendered by program producers and productions houses are subject to Sindh Sales Tax.
Definition of the term program is contained in the Sindh Sales Tax on Services Act, 2011, which is now being amended to include re-recording and other post-production processes (like dubbing, colouring, sub-titling and captioning).
Tax experts at A F Ferguson Chartered Accountants said that by way of another amendment, definition of the term ‘franchise’ is being expanded to bring those franchise arrangements into the ambit of SST which do not involve any agreed consideration or fee for such franchise services.
The amendment has apparently been made to address the anomaly which arose due to the reason that the relevant rules prescribed by SRB provided for chargeability of SST on franchise services even if no consideration was agreed whereas definition of the term ‘franchise’ only included reference to franchise services provided against a consideration.
Despite the above amendment, one can argue (particularly in the light of recent judgement of the Supreme Court in the case of Civil Aviation Authority) that value of service cannot be deemed for levying tax where service is rendered without consideration.
