Sindh sales tax on services: SRB rates and registration

If you render services in Sindh, the Sindh Revenue Board is your sales tax authority. That is true whether you are based in Karachi, based in Lahore and serving Karachi, or based abroad with a Sindh presence. Federal registration for goods does not reach services, and a Punjab registration does not reach Sindh.

SRB rate structure

Reduced rates are generally accompanied by restrictions on input tax recovery. A 15% rate with input recovery and a low rate without it are not comparable on headline rate alone — model your own input intensity before assuming the lower figure wins.

Where Sindh differs from Punjab in practice

The charge is imposed by section 3 of the Sindh Sales Tax on Services Act 2011, with the taxable services and their rates in the schedules to that Act. It is a separate statute from Punjab's, administered by a separate authority, and the two differ in ways that matter operationally rather than just in rate.

For a business operating in both, the rate difference is a pricing and invoicing problem rather than an arbitrage opportunity — you cannot choose the province, only apply the right rule. The Punjab guide covers the other side, and the federal-provincial fork covers how to decide which applies at all.

Registering with SRB

1. Obtain the FBR NTN first. Provincial registration builds on federal income tax registration — NTN registration.
2. Classify each service against the Sindh schedule and identify the rate attached to that entry, line by line through your revenue.
3. Apply through the SRB portal with business particulars, premises evidence, bank account details, and CNICs or formation documents.
4. Complete any verification required and check every particular on the registration certificate against your documents.
5. Update invoicing before the first taxable supply, so the SRB registration number, correct rate and tax amount appear separately.

Operating under SRB registration

• Monthly returns filed with SRB on its own cycle, due whether or not there was activity in the period.
• Invoice discipline: serial control, registration number, a service description matching a schedule entry, and value, rate and tax stated separately.
• Withholding. Prescribed categories of service recipient are required to withhold provincial services tax. If you are a corporate buyer of services in Sindh, check whether that obligation attaches to you; if you are a provider, expect part of your tax to be remitted by clients and track it invoice by invoice.
• Reconciliation. Twelve months of SRB returns should tie to the service revenue in your annual income tax return. Differences between provincial turnover and federal declared turnover are a routine enquiry trigger, so build the reconciliation monthly rather than defending it later.
• Records retained for the statutory period in a form that moves from a return figure to a ledger total to a source invoice.

If you have been trading in Sindh unregistered

This is a common position rather than an unusual one, particularly for consultancies and agencies that acquired Karachi clients without revisiting their registrations. It is also a position that gets worse with time rather than stabilising, because the exposure accumulates with every invoice.

What to establish before deciding how to proceed:

1. From when. Identify the first taxable service rendered in Sindh, because that dates the exposure.
2. How much. Total the Sindh-sourced service revenue by month for the whole period, separated from revenue belonging to other jurisdictions.
3. What you charged. Whether you invoiced with no tax at all, or charged tax under a different registration and remitted it to the wrong authority. These are different problems requiring different remedies.
4. What is recoverable. Whether any of the tax can be recovered from clients contractually, which depends on how your engagement terms deal with taxes.

Registering prospectively while leaving a known historic exposure unaddressed is rarely a stable answer, because registration itself invites the question of when activity began. Get the position quantified and take advice on disclosure before filing a first return.

What goes wrong in Sindh specifically

• Charging 18% because that is the federal goods rate everyone knows. Sindh services are 15%.
• Assuming a Punjab or federal registration suffices for Karachi work, leaving an unregistered exposure with SRB.
• Claiming a reduced rate without meeting the conditions attached to it, or without accounting for the input tax restriction that accompanies it.
• Treating export of services as out of scope rather than zero-rated with conditions to evidence per engagement.
• Ignoring client withholding, so the return cannot be reconciled between tax charged, tax withheld by clients and tax deposited.

If your clients span more than one province, map revenue to place of provision before the next return rather than after an authority asks. Send us your client locations and service categories and we will tell you which registrations you actually need.

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.

• Sindh Revenue Board
• Sales Tax Basics (FBR)
• Register for Sales Tax (FBR)
• Punjab Revenue Authority sales tax guidance

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