Hotels, guest houses and event venues: provincial sales tax

Hotels, guest houses, marriage halls and event venues are hospitality services, taxed by the provinces. The sector's twist is that a single stay or event often bundles several services — a room, meals, a hall — each taxable, sometimes at different rates. Add reduced rates and exemptions that vary by province, and a venue needs to handle its sales tax with care. This guide sets out the framework.

Hospitality is a provincial service

Hotel accommodation, guest-house and event-venue services are services, so they fall under provincial sales tax administered by the authority for the province where the property is located — PRA, SRB, KPRA or BRA — with Islamabad under FBR. A hotel or venue registers and files with the provincial authority, not under the federal goods regime. This is the anchor: whatever else a hospitality business does, its accommodation and venue services are a provincial sales-tax matter.

Events that combine services

The practical complexity comes from combined packages. A wedding or corporate event at a venue may bring together hall hire, catering, and sometimes accommodation — and each of these is a service within the provincial regime. So a single event package can involve several taxable service elements rather than one. The venue should identify the components and apply the correct treatment to each, which matters especially where different elements carry different rates or conditions. Catering, in particular, connects to the restaurant and catering treatment, including any payment-method rate features. Presenting one all-in price without understanding the elements underneath risks applying the wrong treatment to part of the package.

Reduced rates and exemptions

Finally, not all hospitality is taxed at the full standard rate. Certain venue or hospitality categories attract reduced rates, and some exemptions or concessions are applied or under consideration in particular provinces — the treatment of smaller guest houses, particular hotel tiers, or specific event services can differ from the headline rate. Because these vary by province and change, a hotel or venue should confirm the current rate and any exemption for its specific services with the relevant authority, rather than assume the standard rate blankets everything it does. The safe approach is to map each service the property offers to its correct provincial rate, and revisit that mapping as provincial rules evolve.

Common mistakes

• Treating hospitality as a federal matter rather than a provincial service.
• Charging one blanket rate on an event package with several different service elements.
• Overlooking a reduced rate or exemption available to a particular hospitality category.
• Ignoring the catering-specific rate features that apply within a venue package.

Where it fits

Hospitality sits alongside restaurants and catering and rests on the federal-versus-provincial divide. For province detail, see the Punjab (PRA) and Sindh (SRB) overviews. Hotels and venues are provincial services, often supplying several taxable elements at once.

Where the rate actually comes from

Hospitality appears in the reduced-rate part of the Sindh schedule, and venue exemptions in several provinces turn on conditions such as plot size, ownership and air conditioning rather than on turnover. Those conditions are the substance of the relief.

The standard rate is 16 per cent in Punjab and 15 per cent in Sindh, Khyber Pakhtunkhwa and Balochistan, with telecommunication services higher at 19.5 per cent and Islamabad Capital Territory administered by FBR. Sindh has also moved from a positive list to a negative list, so a Sindh service is taxable unless it is specifically exempt — if you concluded some years ago that you were outside the net, that conclusion needs re-testing. The full picture is in the rates by province guide; the authoritative figure for your own category is in the current working tariff published by Sindh Revenue Board or the authority for your province.

Source check: 14 September 2026. Standard provincial rates and the Sindh negative-list reform are sourced in the rates-by-province guide. The category treatment described above is general orientation and has not been confirmed line by line against any authority's current schedule — read your own entry in the applicable working tariff before invoicing.

Sources

This guide is written against the official and clearly labelled professional references below. Rates, thresholds and portal procedures change between reviews, so open the primary source before relying on a figure.

• Punjab Revenue Authority sales tax guidance
• Sindh Revenue Board
• Khyber Pakhtunkhwa Revenue Authority
• Balochistan Revenue Authority
• Sales Tax Basics (FBR)

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