Islamabad: The Federal Board of Revenue (FBR) has introduced new General Sales Tax (GST) rates on a wide range of services within the Islamabad Capital Territory (ICT), expanding the tax base with changes effective from July 1, 2025. The revised structure imposes GST at either 5% or 15% depending on the nature of the service and the mode of payment.
Most services, including those offered by hotels, guest houses, clubs, marriage halls, stevedores, customs agents, courier companies, freight forwarders, and security agencies, will now be taxed at 15%. Construction services have also been brought under the 15% GST slab, though exemptions apply to small-scale projects under PKR 50 million, government civil works, and some international development undertakings.
Property developers and promoters will now be taxed under a fixed regime, with charges applied per square yard for land development and per square foot for building construction.
Restaurant services will be taxed based on the mode of payment:
5% GST for digital payments (credit/debit cards, mobile wallets, QR codes)
15% GST for payments made in cash
The FBR has also imposed a 15% GST on advertisements aired on television and radio, with the exception of certain government-sponsored public service campaigns.
In the personal care segment, services provided by beauty salons, skin clinics, and similar facilities will generally be taxed at 15%, though smaller non-air-conditioned setups may qualify for the 5% reduced rate under specified conditions.
Other professional services — including management consulting, IT and tech support, and legal and technical advisory — have been included in the 15% GST category, broadening the scope of taxed activities across the capital.
The new structure is part of the government’s broader fiscal reform agenda aimed at improving documentation and revenue collection from the service sector in urban centres like Islamabad.
Samra Zulfiqar, a real estate analyst at Zameen.com, is passionate about finding projects that offer buyers the best returns. Her keen insights spotlight the market’s most promising opportunities.
