OverviewSOURCE VERIFIED
The Punjab Revenue Authority (PRA) administers the Punjab Sales Tax on Services Act, 2012. IT companies providing services in Punjab must register with PRA and comply with filing and payment requirements.
IT Services Tax Rates (FY 2025-26)SOURCE VERIFIED
| Service Category | Rate | Input Tax Credit | Jurisdiction | Reference |
|---|
| Software/IT system development | 0% (Zero-rated) | No | Punjab | PRA Act 2012 |
| IT training services | 0% (Zero-rated) | No | Punjab | PRA Act 2012 |
| IT-enabled services (maintenance, hosting, data processing) | 0% (Zero-Rated) | No | Punjab | Punjab Sales Tax on Services Act 2012, Notification per PRA directive |
| IT consulting (general) | 0% (Zero-Rated) | Yes | Punjab | Punjab Sales Tax on Services Act 2012 §4 |
| Telecommunication services | 19.5% | Yes | Punjab | PRA Act 2012 |
| Digital/online marketing agencies | 0% (Zero-Rated) | Yes | Punjab | Punjab Sales Tax on Services Act 2012 §4 |
| IT export (PSEB-registered) | 0% | No | Punjab | PSEB notification |
Key distinction: Pure software development is zero-rated (0%). IT-enabled services like hosting, maintenance, and data processing are at 5% with no input tax credit. General IT consulting falls under the standard 16% rate with ITC.
Punjab SST Rate SummarySOURCE VERIFIED
| Tier | Rate | ITC | Examples |
|---|
| Standard | 16% | Yes | Hotels, construction, insurance, consulting |
| Telecom | 19.5% | Yes | Mobile, internet, bandwidth |
| Goods Carriage | 15% | Yes | Road/rail freight |
| Reduced | 5% | No | IT-enabled services, beauty parlors, ride-hailing |
| Zero-rated | 0% | No | Software development, IT training, IT export (PSEB) |
Registration ProcessSOURCE VERIFIED
- Visit PRA Registration Portal
- Create account and fill sales tax registration form
- Upload documents: CNIC, NTN, business registration, address proof
- Receive PRA registration number upon approval
- Install E-IMS (Electronic Invoice Management System) mobile app
Filing & PaymentSOURCE VERIFIED
| Requirement | Detail | Jurisdiction |
|---|
| Monthly Return Due Date | 18th of following month | Punjab |
| ADC Fee | PKR 100 (STS) + PKR 15 (PWWF) | Punjab |
| Withholding by Banks/Insurance/Govt | 80% tax per Rule 5a (2025) | Punjab |
| E-IMS Compliance | Mandatory | Punjab |
| POS Integration | Being rolled out | Punjab |
PenaltiesSOURCE VERIFIED
| Violation | Penalty | Jurisdiction |
|---|
| EIMS non-compliance | PKR 400,000 to PKR 1,000,000 (per Punjab EIMS Order) | Punjab |
| Refusing digital payments | Up to PKR 1,000,000 (first); repeat: closure up to 1 month (per Punjab Sales Tax on Services Act 2012) | Punjab |
| False/fraudulent return | Prosecution + fine + 100% of evaded tax | Punjab |
| Late filing | PKR 500 per day (per Punjab Sales Tax on Services Act 2012) | Punjab |
Federal Tax Rates for Punjab IT CompaniesSOURCE VERIFIED
| Tax | Rate | Jurisdiction | Reference |
|---|
| Corporate Tax (PSEB IT export) | 0.25% | Federal/ICT | ITO §154A |
| Corporate Tax (domestic IT) | 20% | Federal/ICT | ITO 2001 |
| WHT Export (PSEB) | 0.25% | Federal/ICT | ITO §154A |
| WHT Export (non-PSEB) | 1% | Federal/ICT | ITO §154A |
| Startup Tax Credit | 100% for 3 years | Federal/ICT | ITO §65F(b) |
| SEZ Tax Holiday | 10-year 0% | Federal/ICT | SEZ Act 2012 / BOI |
| EOBI | 5% + 1% | Federal/ICT | EOBI Act 1976 |
| PESSI | 6% + 1% | Punjab | PESSI Ord. 1965 |
Current Developments (April 2026)SOURCE VERIFIED
- Single Sales Tax Return: PRA participating in national initiative to unify provincial SST filing — will significantly simplify compliance for multi-province IT companies
- E-IMS Enforcement: Penalties PKR 400,000 to PKR 1,000,000 for non-compliance (per Punjab EIMS Order)
- Withholding Requirements: Rule 5a (2025) requires banks, insurance, and government entities to withhold 80% of tax on specified services
- POS Integration: Being rolled out for enhanced tax compliance
Provincial Revenue Authority ComparisonSOURCE VERIFIED
| Aspect | Punjab (PRA) | Sindh (SRB) | KP (KPRA) | Balochistan (BRA) |
|---|
| Standard Rate | 16% | 15% | 15% | 15% |
| IT Concessional | 5% | 3% | 2-5% | — |
| IT Export (PSEB) | 0% | 0% | 0% | 0% |
| IT Consulting | 16% | 15% | 15% | 15% |
| Telecom | 19.5% | 19.5% | 19.5% | 19.5% |
| Filing Deadline | 18th | 18th | 18th | Monthly |
| E-Filing | Yes | Yes | Yes | Limited |
| E-IMS | Mandatory | Available | Limited | Limited |
ContactSOURCE VERIFIED