The Punjab Revenue Authority (PRA) has issued “The Punjab Sales Tax on Services (Determination of Minimum Tax Liability) Regulations, 2019 vide notification No. PRA/Order.06/2017.Vol(V)/1433 dated October 1, 2019.


Through these regulations the PRA explained the procedure for determination/calculation of minimum tax liability and related matters where a registered person fails to file sales tax return.

According to these regulation, if a person fails to file a return, the minimum tax liability shall not be less than the highest amount of tax paid by the registered person in any of the previous twelve months and where tax paid in last 12 months is nil the minimum tax liability shall be calculated on the basis of monthly average of the sales declared by the person in Income Tax Return filed under Income Tax Ordinance, 2001 for the last tax year.

In case minimum tax liability cannot be determined as mentioned above, it shall be determined taking into account three or more of the following factors.

  • Location of business
  • Type of business (composite or stand-alone)
  • Nature and market value
  • of persons employed
  • Capital employed
  • Amount of utility bills
  • Estimation on the basis of sales ascertained through monitoring of business premises and including electronic monitoring
  • Business turnover reflected in business bank account

A show-cause notice for determination of minimum tax liability (not a final liability) can be issued by an officer not below the rank of Assistant Commissioner after expiry of 15 days from due date of furnishing of return.

If the registered person pays the due amount of sales tax with default surcharge and penalty within one month of issuance of notice, the notice will be considered to have been withdrawn otherwise officer of authority will finalize the assessment order after the expiry of 30 days from the issuance of show cause notice.

The assessed amount will be recovered under section 70 of the Act read with Punjab Sales Tax on Services (Recovery) Rules, 2012 and Sales Tax on Services (Enforcement) Rules, 2014.

Determination/ payment of minimum tax liability shall not absolve the taxpayer from payment of actual tax liability which may accrue/determined through audit, investigation or inquiry.