KARACHI: The Sindh Revenue Board (SRB) on collecting Rs22.29 billion during first eight months (July-Feb) has achieved 70 per cent of the target of Rs32 billion fixed for fiscal 2012-13.

Official sources disclosed that the SRB has set a revenue target of Rs32 billion for current fiscal (2012-13) and during first eight months collected Rs22.29 billion or 70 per cent of the revenue target.

The SRB made a debut in collection of sales tax (indirect) on services last fiscal (2011-12) and managed to collect Rs25.01 billion. Against this the Federal Board of Revenue (FBR) which had been collecting sales tax on services on behalf of provinces in the fiscal 2010-11 transferred Rs15.35 billion to Sindh.

The SRB which came into being through Sindh Assembly resolution initiated its working in July 2011, and its first year performance remained remarkable as it surpassed the revenue target fixed for fiscal 2011-12 by Rs100 million.

It is worth mentioning that during this period the SRB was at its initial stage of infancy and while it was being established it simultaneous made a debut in collection of sales tax on services.

Though the target set for current fiscal 2012-13 at Rs32 billion is already higher by 28 per cent over the last fiscal but encouraged with first eight month’s collection the SRB has projected the collection for the current fiscal at Rs33.4 billion, official sources said.

However, the SRB is facing difficulty in many revenue collection areas particularly where FBR has yet to moved out and allow the provinces to meet their constitutional rights.

Sources said that the FBR was supposed to issue withdrawal notification on Federal Excise Duty (FED) which was being collecting on sales tax mode by the federal government. However, this was not done and as a result the SRB is unable to collect sales tax from July 1, 2011 on many services.

Another acute problem being faced by taxpayers is with regard to notices being received upon by them by the Punjab Revenue Authority (PRA) on services rendered in the province of Sindh.

They failed to understand that as to why the PRA was serving them notices for payment of sales tax on such services which had been rendered by them outside the Punjab and in another province where it has no jurisdiction.

It is interesting that the highest collection of sales tax on services during first eight months of current fiscal came from telecommunication sector at Rs6.756 billion, followed by terminal operators who paid Rs3.824 billion, insurance sector paid Rs3.167 billion, banks Rs2.101 billion and sales tax collection on services from franchise stood at Rs1.135 billion.

In total the SRB is presently collecting sales tax on services from around 29 sectors which include advertisement, caterers, club, construction, courier, customs agents, investment bank, leasing, modaraba, property developers, shipping agents and chandlier etc.