KARACHI: The Sindh Revenue Board (SRB) has made a notable adjustment to the service tax rates for restaurants and hotels in Karachi, permitting 58 establishments to collect a 15% service tax on digital payments instead of the previously reduced 8%. This decision comes despite the initial aim of the lower tax rate to encourage the documentation of the economy.
The Sindh budget for the fiscal year 2024-25 had originally decreased the Sindh Sales Tax (SST) on restaurant services paid through debit and credit cards from 15% to 8%. However, a recent SRB notification reveals that only a select number of restaurants, specifically those with Point of Sale (POS) systems integrated with the SRB’s system, are authorized to charge the higher rate.
Currently, there are over 1,700 restaurants registered with the SRB, primarily concentrated in Karachi, yet only 58 have received permission to impose the 15% tax. This selective allowance is believed to be granted to larger establishments with a significant market share.
The SRB clarified that only restaurants meeting compliance with the Sindh Sales Tax on Services Act, 2011, and possessing integrated POS invoicing systems are eligible for the higher tax rate. This move is part of the SRB’s updated tariff for the tax year 2024-25 and affects all restaurant services, including those at hotels, motels, guest houses, and farmhouses.
The SRB also addressed recent press reports suggesting the withdrawal of the reduced tax rate. The board denied these claims, asserting that the lower SST rate remains operational. Restaurants opting for the standard 15% rate must obtain specific permission from the SRB.
For customers, the SRB advises verifying the applicable SST rate before dining by consulting their website or requesting confirmation from the restaurant regarding their SRB authorization.
The following restaurants and hotels have been authorized to charge the 15% service tax:
- M/S. STARTERS
- M/S. HILAL RETAIL BRANDS (PRIVATE) LIMITED
- M/S. OB HOSPITALITY GROUP
- M/S. BAR B Q TONIGHT (PRIVATE) LIMITED
- M/S. DABBAWALAS (PRIVATE) LIMITED
- M/S. AVARI HOTELS LTD.
- M/S. BEACH LUXURY HOLDINGS PVT. LTD.
- M/S. MANDI HOUSE
- M/S. KARACHI HALEEM
- M/S. NANDO’S PAKISTAN (PRIVATE) LIMITED
- M/S. FOOD DYNAMICS
- M/S. AKS HOSPITALITY
- M/S. J & S CORPORATION
- M/S. ESPRESSO COFFEE HOUSES (PVT.) LTD.
- M/S. AUSSIE BURGER COMPANY
- M/S. EVERGREEN FOODS
- M/S. GRAY MACKENZIE RESTAURANTS INTERNATIONAL LIMITED
- M/S. CHOP PRIME STEAKHOUSE
- M/S. SIZA FOODS PVT LTD
- M/S. XANDER’S
- M/S. WAGHA FOODS
- M/S. U.I.G. (PVT) LTD.
- M/S. 4M RESTAURANT
- M/S. S & A HOLDINGS
- M/S. THE POTATO FACTORY INTERNATIONAL (OPTP)
- M/S. OHS FOODS
- M/S. ZEYTIN
- MR. SIKANDAR RIZVI
- M/S. LAL QILA
- M/S. WAH BRANDS PVT LTD
- M/S. EXPRESS INN
- M/S. PIE IN THE SKY
- M/S. ZAHID & SONS FOODS (OPTP)
- M/S. ALA RAHI
- M/S. OZ ENTERPRISES (OPTP)
- M/S. 4M RESTAURANT (SEA SALT)
- M/S. ENIGMA
- M/S. CAFE QABAIL
- M/S. MASTER MANGEMENT
- M/S. GIVINI FOODS
- M/S. BEEF SMASH
- M/S. HOUSE OF BOUGAINVILLEA
- M/S. MEW’S CAFE
- M/S. GREENO CORPORATION
- M/S. PRIME TREE HOSPITALITY (GINSOY & BAMB0U)
- M/S. BIG HOLDING
- M/S. FMAOUS O’S PIZZA
- M/S. FMAOUS O’S PIZZA
- M/S. LAKHANI FOODS
- M/S. ROWTISSERIE
- M/S. ANGUS STEAK HOUSE
- M/S. TANDOORI HUT
- M/S. HDS PREMIER FOODS (OPTP FRANCHISE)
- M/S. K KITCHEN PVT LTD (KHAADI)
- M/S. KRISSKROSS HOLDINGS (BAMBOU CLIFTON)
- M/S. NOS (NECO’S CAFE)
- M/S. KARACHI FOODS
- M/S. KABABJEES
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