Punjab Sales Tax on Services
If you sell services in Gujranwala, your sales tax is provincial, not federal.
Services rendered in Punjab are taxed by the Punjab Revenue Authority under the Punjab Sales Tax on Services Act, 2012 — not by FBR. Salons, restaurants, marriage halls, marketing and IT firms, contractors and property dealers all sit on the provincial side of the line, and the rules are different from the federal ones in ways that catch people out.
Which Authority You Belong To
Pakistan splits sales tax in two. Goods are federal, and go to FBR. Services are provincial, and in Punjab they go to PRA. Gujranwala is in Punjab, so a business here that sells services deals with PRA for sales tax — while still dealing with FBR for income tax and its NTN.
It is a distinction worth getting right before you pay anything. PRA states the position plainly: depositing Punjab sales tax with FBR or any other tax organisation “amounts to non-payment of such tax” with the Punjab government. The money is gone to the wrong account, the liability stands, and recovery and penalty follow.
Businesses that sell both — a workshop that fits parts and charges labour, a printer that sells material and design — can find themselves registered on both sides. That is normal. What is not workable is guessing which side a transaction falls on.
Who Has to Register
This is where Punjab differs most sharply from the federal regime, and where small service businesses are most often caught out.
There Is No Size Threshold
PRA’s position is that every person providing a taxable service is liable to be registered, and that no exemption threshold applies. Unlike the federal regime for goods, being small is not by itself a reason you are outside it.
Already Registered with FBR?
Then you do not apply again. PRA states that an existing FBR registration is carried across — the system prefixes the letter P to your existing number and adds you to PRA’s register, and you are told when it has happened.
One Province, One Registration
Work across provincial lines and each province wants its own. A firm serving clients in Punjab and Sindh registers with PRA and with the Sindh board separately, and files a separate return to each for the services rendered there.
The Rate Is Not One Number
The standard rate of Punjab sales tax on services is 16% of the value of the service. That is the figure most businesses work with, but it is not the only one: telecommunication is taxed higher, carriage of goods by rail or road lower, and a reduced band applies to a list of services that is revised in the provincial budget each year.
Which rate applies to you is decided service by service in the Second Schedule to the Act, not by the size or type of your business. A reduced rate usually comes with a condition attached — most often that input tax cannot be adjusted — so the lower headline figure is not always the cheaper outcome.
We check the rate against the current schedule for the service you actually provide, and tell you what it does to your pricing before you start charging it.
The Monthly Cycle
- Tax is paid by the 15th of every month, and the return filed by the 18th
- Telecommunication services run on a different clock — the 21st for both
- The PRA return is separate from the FBR return, even where the business files both
- Returns are filed electronically; payment is made through the prescribed challan at designated National Bank branches
- A month with no taxable service still needs its return
- Punjab sales tax paid to FBR by mistake does not count as paid — the liability survives it
- Input tax adjustment is allowed only within the limits PRA’s rules set, and within the period they allow
How We Handle It
Place Your Service
Find your activity in the current Second Schedule, and settle whether it is provincial, federal, or partly both.
Register, or Confirm You Already Are
Many businesses are already on PRA’s register through their FBR number without knowing it. We check before filing anything new.
Set the Invoice Up
The right rate, shown correctly on the bill, and a record that survives an audit — decided before the first invoice, not the first notice.
File Every Month
Payment by the 15th, return by the 18th, with the working kept so the figures can be explained later.
Withholding Catches Service Providers Out
Where your client is a company or another withholding agent, part of the Punjab sales tax on your invoice may be withheld by them and paid to PRA directly. If you also account for the whole amount yourself, you pay twice; if neither of you does, the liability sits with you. Knowing which of your clients withholds, and at what portion, is part of getting the monthly return right.
Common Questions
I already pay sales tax to FBR. Do I still deal with PRA?
If any part of what you sell is a service rendered in Punjab, yes. The two are separate systems with separate returns. Paying one does not discharge the other, and PRA treats Punjab sales tax deposited with FBR as not paid at all.
My business is small. Is there a turnover limit before this applies?
PRA’s stated position is that no exemption threshold applies to taxable services. Some individual entries in the Second Schedule carry their own conditions or exemptions, which is a different thing — it turns on the service, not on your size.
What does registration cost?
PRA charges no fee for sales tax registration. What it costs you is the monthly cycle that follows — which is the part worth planning for.
I work for clients in Lahore, Karachi and Islamabad. Who gets the tax?
Broadly, the province where the service is rendered. Each province operates its own authority and wants its own registration and return, and the place-of-supply rules decide the hard cases. This is worth settling in advance rather than after two authorities have both asked.
Does an NTN cover me for this?
An NTN is your income tax registration with FBR. Punjab sales tax on services is a separate liability, although PRA uses the same number with a P prefix once you are on its register. Having an NTN does not mean your provincial position is settled.
Find Out Which Side of the Line You Are On
Tell us what your business actually does and where your clients are. We will tell you whether you fall under PRA, FBR, or both, and what the monthly position looks like.
Rates, registration position and filing dates above are drawn from the Punjab Revenue Authority’s own published material, including its frequently asked questions and its return filing calendar, checked September 2026. The Second Schedule to the Punjab Sales Tax on Services Act, 2012 is amended by each provincial finance act — the current schedule is checked against your particular service before anything is filed. This page is general information, not advice on your circumstances.
Official sources: Punjab Revenue Authority — frequently asked questions · filing calendar · the Act and Second Schedule