Islamabad: The Punjab Revenue Authority (PRA) has penned a letter to the Federal Board of Revenue (FBR) to request them to stop their field formations from collecting sales tax from restaurants until a legal solution is found, according to news sources. All the provinces and the federal government had subjected the matter to postponement until a mutually satisfactory agreement is reached.
According to the provincial governments’ stance, the restaurants fall under the services category, and under the law, the provinces alone retain the right to impose this tax. The PRA urged FBR to wait for the Law and Justice Division to ascertain the legal status of restaurants (whether they fall under the category of services or suppliers) as per the prior agreement. The PRA letter said that it will respect any decision announced by the Law and Justice Division.
Please note that the tax notices are presently being issued to restaurants by FBR to pay taxes under the Sales Tax Ordinance 1990.