Highlights of the Sindh Finance Act 2024-2025

Standard Tax Rate Adjustment

The Sindh Sales Tax (SST) standard rate has increased from 13% to 15% to harmonize with other provinces. This adjustment aims to eliminate tax arbitrage and prevent the loss of business and tax revenue across jurisdictions, though it may raise the cost of doing business in Sindh.

Newly Taxable Services

The following services are now subject to SST:

• Farmhouses
• Hospitals and Clinics
• Education Services (excluding special needs and adult literacy programs)
• Medical Practitioners and Consultants
• Pet Care Services
• Intra-city Transportation of Goods

Changes in SST Rates, Exemptions, and Policies

Reimbursable Expenses

Reimbursable expenses, such as salaries and allowances, are now included in the taxable value of services. This change may lead to legal challenges, as previous court judgments have favored taxpayers.

Expansion of Economic Activity

The scope of economic activity now includes indirect relationships between employees and employers. Employers are required to charge SST for employees deputed or outsourced for client projects.

Record-Keeping Changes

The timeframe for maintaining records has been reduced from 10 years to 6 years for tax periods starting July 1, 2025. This streamlines compliance for taxpayers registered with multiple tax authorities.

Furnishing of Records

The Sindh Revenue Board (SRB) can now request records related to services provided by taxpayers registered with other provincial tax authorities. This addresses prior exemptions upheld by appellate forums.

Assessment Orders

Assessment orders under Sections 23(2) and 47(1) must be issued within 5 years for tax periods post-June 2025, ensuring uniformity across jurisdictions.

Automatic Stay

Taxpayers now qualify for an automatic stay by depositing 10% of the tax due (reduced from 25%) while an appeal is pending before the Commissioner Appeals SRB. This aligns with provisions in Punjab and federal tax laws.

Changes in Service Definitions

• Business Support Services: Scope expanded to include “marketing.”
• Car/Automobile Dealers: Now includes “other motor vehicles.”
• Cosmetic and Plastic Surgery: Clarified to include all “procedures.”
• Hotels: Now encompasses “huts,” “resorts,” “lodges,” and event services.
• Program Transmission: Includes any program via the internet, radio, TV, cinema, or theater.
• Renting of Immovable Property: Excludes premises used for outdoor sports and games.
• Rent-a-Car Services: Scope broadened to exclude “passenger” restriction.
• Sports and Games Centers: Includes both indoor and outdoor facilities.
• Surveyors: Expanded to include specialized surveys for mineral exploration.

Authorized Restaurants Charging 16% SST on Card Payments

The following restaurants have received SRB approval to charge 15% SST on credit and debit card payments (Link Below):

Restaurant List – SRB Allow to charge 15% on Digital Payment. Official Website

This updated Sindh Finance Act emphasizes uniformity and compliance while broadening the tax base. For queries or professional guidance, consult our tax experts to navigate these legislative changes effectively.