ISLAMABAD: The Federal Board of Revenue (FBR) on Saturday clarified that nonew sales tax was imposed on IT services as claimed in a news reportpublished in a section of media.
“IT and IT-enabled services were subject to sales tax at 16pc since July2015 under Islamabad Capital Territory (Tax on Services) Ordinance, 2001.Later, FBR reduced the rate of sales tax on these services to 5pc vide SRO781 (I)/2018 dated 21st June, 2018,” the FBR said in a statement issued inresponse to a media report.
The FBR clarified that the scope/extent of IT services was not definedunder Islamabad Capital Territory (Tax on Services) Ordinance, 2001, whichwas giving rise to dispute between tax authorities and taxpayers. However,the definition of IT and IT-enabled services was available under the IncomeTax Ordinance, 2001.
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“The same definition has been adopted for Sales Tax purposes vide SRO 77(I)/2021 dated 21st January, 2021,” the FBR stated. “The recent SRO hasbeen issued as a clarification to reduce disputes on the definition of ITand IT-enabled services.”
