FBR withdraws FED to the Sales Tax on services receivable by the provinces to avoid double taxation.
The Services rendered by registered persons who were previously subject to Federal Excise Duty (being collected in Sales Tax mode) have now been subject to Sales Tax by the Provinces through their legislation with effect from 1st July, 2011. The Federal Board of Revenue through a notification has withdrawn Federal Excise Duty on such services (Table-II of First Schedule to the Federal Excise Act, 2005) with effect from the same date i.e. 1st July, 2011 in order to avoid double taxation.
However, the registered persons providing such services will continue to charge Tax/Duty and file Sales Tax Returns as before with certain amendments being worked out in Federal Board of Revenue and the registered persons shall face no difficulty for switching from Federal Excise Duty to the Sales Tax on Services receivable by the Provinces.
Riffat Shaheen Qazi
Jul 01, 2011