Indirect Tax

Indirect Tax

Growing emphasis by the government on indirect taxes.

Growing emphasis by the government on indirect taxes.

We have established a practice to meet clients' needs providing a wide range of indirect tax services.

Sales Tax is a tax on value addition and a multi-point tax, which is levied at every stage of sale. Sales Tax encompasses the entire value addition process and supply chain partners. In view of that its importance to business has phenomenally increased.

Federal Excise Duty is a levy on manufacturing sector as well as on services sector.

After 18th Amendment to the Constitution of Pakistan, provinces have been given right to levy tax on services in their territorial jurisdiction. Consequently scope of indirect taxes and its importance has increased manifolds.

In Pakistan there are four provinces and a capital territory and all the provinces and the capital territory have enacted their own piece of legislation for services taxation.

To meet the compliance and regulatory requirements and be tax efficient at the same time is a daunting tasks for the businesses.

We assist the business in fulfilling this task.

Indirect Tax Laws in Pakistan comprises of:

  • Sales Tax Act, 1990
  • Federal Excise Act, 2005
  • Sindh Sales Tax on Services Act, 2011
  • Punjab Sales Tax on Services Act, 2012
  • Khyber Pakhtunkhwa Sales Tax on Services Act, 2013
  • Baluchistan Sales Tax on Services Act, 2015
  • Islamabad Capital Territory Sales Tax on Services Ordinance, 2001.

How can we add value:

Strategic Level

Developing detailed planning strategies (including industry specific issues) to help reduce clients' administrative and tax costs from indirect taxes which interalia includes.

  • Identification of tax efficient and effective planning opportunities.
  • Formulating indirect tax efficient business models.

Operational level

  • Advising on the sales tax/excise duty treatment / disclosures under periodic tax returns and potential liabilities of specific transactions.

Advisory Level

  • Advice on classification, valuation, applicability of taxes on transactions and admissibility to tax benefits/exemptions.
  • Opinions on indirect tax issues.

Tax Health Check and Due Diligences

  • Carry out diagnostic health check analysis from a tax perspective.
  • Buy-side and sell-side tax due diligence for strategies acquisitions and disposals.
  • Ascertaining the tax liabilities (if any) that affect the financial performance of the entity, once the investment or disinvestment has been concluded.

Litigation

  • Assisting clients on disputes with tax authorities including representation before tax and appellate authorities and liaison with lawyers in appeals before the High Court and Supreme Court.

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