Indenters cannot bear burden of 14% service tax: ex-minister


KARACHI: Imposition of service tax on indenters must be reviewed by the Sindh government, as it is against the interests of the province, a business leader said on Thursday.

Indenters are already paying five percent withholding tax and they are unable to pay 14 percent service tax, said President Pakistan Businessmen and Intellectuals Forum (PBIF) and former provincial minister Mian Zahid Hussain.

Talking to a delegation of indenters led by their Chairman Saqib Fayyaz Magoon, he said that pushing indenters to the wall can force them to shift businesses to other provinces and stop transfer of commission to Pakistan which will discourage foreign exchange transfer to country. He asked the Chief Minister Sindh and Chairman Board of Revenue to reconsider decision in the provincial interest.

Speaking at the occasion, Saqib Fayyaz Magoon said that service tax is illegal, unconstitutional and cruel, which will not be accepted. He said that indenters get one to two percent commission from exporters of other countries, which is not their income as cost of office, staff, salaries, transportation etc. is included in it.

Dubbing service tax as double taxation, he said that the government is forcing indenters towards non-compliance, as the commission they get is already included in the total cost and all the applicable taxes are duly paid. The service tax is not applicable and it can hurt the interests of province of Sindh, he warned.