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AG KP agreed to ensure withholding of sales tax on service on bills related to services

PESHAWAR: Director General KPRA held a meeting with Accountant General Khyber Pakhtunkhwa to discuss issues relating to withholding of Sales Tax on Services from bills processed through AG office.

Accountant General Khyber Pakhtunkhwa Naseer Uddin Sarwar welcomed DG KPRA Fouzia Iqbal to his office for the meeting.

Advisor to KPRA on Tax Enforcement Fazal Amin Shah and Assistant Collector (Withholding) Hizbullah Khan accompanied the DG KPRA.

The DG KPRA and her team presented the agenda for the meeting and briefed AG Khyber Pakhtunkhwa and his team that the exemption to erstwhile FATA and PATA has expired on October 31, 2023 and the sales tax on services is extended to erstwhile FATA and PATA or Malakand Division so AG Office should make sure to withhold sales tax on services from bills related to erstwhile FATA and PATA. The AG Khyber Pakhtunkhwa agreed to the request and directed his team to make sure that sales tax on services is withheld from bills of erstwhile FATA and PATA and no exemption is granted to any bill from FATA and PATA.

The KPRA team asked for data sharing with KPRA to which the AG Khyber Pakhtunkhwa agreed and told that a formal written request via a letter will be required for data sharing.

The DG KPRA stated that they upload exemption letters and clarifications for each case on the website of KPRA to ensure transparency and to eliminate chances of misuse and forgery, so those who are given exemptions should be verified through the KPRA website.

“Anyone claiming to have an exemption letter but not available on the KPRA website shall be treated as fake and shall not be entertained by the AG office,” the DG said.
It was also agreed that the KPRA ICT team along with AG Office team will work on incorporating the case-to-case exemptions granted by KPRA in the AG Office Financial Accounting and Budgeting System (FABS) for reference/evidence and to minimize human discretion.
The AG Khyber Pakhtunkhwa agreed for complete integration of SAP and FABS and it was also agreed that no bill, related to services, would be entertained by the AG Office if the sales tax is not charged.

The DG KPRA thanked the AG Khyber Pakhtunkhwa Naseer Uddin Sarwar for his time and cooperation and hoped that interaction will help in increasing the revenue of KPRA coming from AG Office. The AG Khyber Pakhtunkhwa assured full support of his team for the prosperity of the province.

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