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Sindh Increases GST on Services to 15%, Expands Tax Scope

The Sindh government has increased the General Sales Tax (GST) rate on services from 13% to 15% for the fiscal year 2024-25 and expanded the GST scope to include several new sectors.

Under the Sindh Sales Tax on Services Act, services provided by restaurants, hotels, wedding halls, management services, airport services, and warehouses, among others, were already subject to a 13% GST. However, Sindh Chief Minister Syed Murad Ali Shah announced during the provincial budget presentation on Friday that the GST rate on these services would be increased to 15%.

According to the Sindh Finance Bill, three additional sectors are now included under the GST on services: educational services, hospital and clinic services, and services provided by pet-related establishments.

The existing list has been revised to incorporate farmhouses along with guest houses. Additionally, the category of professional services has been expanded to include medical practitioners and consultants, meaning their services will also be subject to GST on services.

The Act has also been amended to cover all types of sports services, previously applicable only to indoor sports and game centres.

A penalty of up to Rs1 million has been proposed for businesses that fail to implement an e-invoicing system. In case of a second offence, the business will be sealed. Individuals who delay depositing the Sales Tax on Services will be required to pay an additional amount equal to the unpaid tax or Rs100,000, whichever is higher.

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