Sales Tax Withdrawn for IT Services: FBR

The Federal Board of Revenue (FBR) has exempted sales tax chargeable under Islamabad Capital Territory (Tax on Services) Ordinance, 2001 on export of IT services and IT-enabled services.

The FBR’s budget instructions (2017-18) – issued on Wednesday – revealed that through SRO 590(1)/2017, dated 01.07.2017, exemption from sales tax chargeable under Islamabad Capital Territory (Tax on Services) Ordinance, 2001 has been provided on export of IT services and IT-enabled services.

Sales tax on certain services under Islamabad Capital Territory (Tax on Services) Ordinance, 2001 is now chargeable at 5% without any input tax adjustment. Scope of such services has been extended to include “services provided or rendered by marriage halls and lawns, by whatever name called, including “pandal” and “shamiana” services and caterers” without any input tax adjustment or refund, the FBR added.


  • The news piece is miss leading. Sales Tax on local IT services is still applicable. The title should be “Sales Tax withdrawn on Export of IT Services”.

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