Dine smart and save 7% tax with card payment as cash tax jumps to 15%

July 01, 2024 (MLN): Diners in Sindh with effect from today, July 01, 2024, will see a significant tax difference depending on their payment method. As per the new finance bill, paying by card at restaurants will now save you 7% in taxes.

However, those opting to pay with cash will face a higher tax rate of 15%, up from the previous 13%. This change aims to encourage digital transactions and streamline tax collection,  according to the notification issued by the Sindh Revenue Board (SRB).

"The standard rate of Sindh Sales Tax (SST) has increased from 13% to 15% effective from 01 July 2024," the notice reads.

Accordingly, the persons providing or rendering the taxable services of hotels, motels, guest houses, farmhouses, restaurants, clubs, caterers and marriage halls & lawns shall be liable to charge SST @ 15% on the said services w.e.f. 0001 hours of the 1 day of July 2024, it added.

In case any service provider of such restaurant services desires to opt for applicability of the standard tax rate of 15% (with input tax credit/adjustment), with the tax invoices issued against payments in the aforesaid digital modes, he may do so after submitting a written application to the Board and after obtaining written approval thereof from the Board in this regard.

It is highlighted that no input tax adjustment is admissible against the restaurant services provided or rendered at the reduced rate of 8% SST.

Apportionment provisions as in rule 22(3) of Sindh Sales Tax on Services Rules, 2011 are to be followed in letter and spirit and should be duly reflected in "row 4" of the tax return (Form SST-03).

Those restaurants, which have their POSs integrated with SRB for real-time reporting of sales, are advised to modify their systems to accommodate aforesaid changes as well as the changes introduced in the Sindh Sales Tax Special Procedure (Online Integration of Business) Rules, 2022 through notification No. SRB-3-4/29/2024 dated June 29, 2024.

Copyright Mettis Link News