Dear Valued Client,
Ministry of Finance, Economic Affairs, Statistics & Revenue (Revenue Division) had issued Sales Tax Notification (S.R.O. 77 (I) /2021) dated January 21, 2021, whereby further amendments have been made in its Notification No. S.R.O. 495 (I)/2016 dated July 04, 2016 to include an explanation of the terms “IT Services” and “IT enabled services” in Islamabad Capital Territory (Tax on Services) Ordinance, 2001.
Federal Board of Revenue (FBR) notified a reduced rate of Five percent (5%) sales tax on “IT services” and “IT-enabled services” vide its Notification No. S.R.O. 781(I)/2018. Through the current notification an explanation has been inserted for the terms “IT Services” and “IT enabled services” to bring it at par with the definition as provided in Clause 133 of Part I of Second Schedule of Income Tax Ordinance, 2001. The terms have been explained as under:
“IT SERVICES” includes software development, software maintenance, system integration, web design, web development, web hosting, and network design, and
“IT ENABLED SERVICES” includes inbound or outbound call centers, medical transcription, remote monitoring, graphics design, accounting services, HR services, telemedicine centers, data entry operations, locally produced television programs and insurance claims processing.
Please click below to view the original Notification
Please feel free to contact us, if any clarification is needed.