LAHORE: A beverage company already registered with the Punjab Revenue Authority gets registered by another province’s revenue authority for having its branch office there.
The assistant commissioner of that province compulsorily registered it on the ground that it has received taxable services in the territorial jurisdiction of that province and also withheld tax but failed to get register with relevant revenue authority to pay the tax deducted. It further wrote in the order that the company having virtual place of business in the province, therefore, it was required to get registered with relevant revenue authority and pay the sales tax withheld as withholding agent.
The notice pointed out that the sales tax law defines the term place of business and covers the economic activity being carried out by the company whether wholly or partially through any other person such as agent, associate, franchisee, branch, office or otherwise in the province or through virtual presence or a website or a website portal or through any other form of e-Commerce but does not include a liaison office.
Therefore, such a company is required to get registered under the relevant provisions of the sales tax Act of that province.
The beverage company, engaged in manufacturing and import of concentrate/ syrup, had responded to the notice by stating that was not required to get register there because of its prior registration with Punjab Revenue Authority.
Both the head office and manufacturing facility of the company are situated in the province of Punjab. Therefore, it is registered with Large Taxpayer Office, Lahore, as well as the Punjab Revenue Authority. Since the company is not resident of that province as definition of “resident person” in the sales tax law, there the company was not required to get registered with the relevant revenue authority.
The company deducts sales tax on services as withholding agent from the service providers throughout the country and pay to the Punjab Revenue Authority. He further pointed out that the company was receiving services from advertisers, who display its advertisements on billboards in the province.
The company makes payments to such service providers and withholds sales tax on services but pays it to the revenue authority in Punjab.
Copyright Business Recorder, 2025
