Sales Tax Rates on Services in AJKIRD

Azad Jammu and Kashmir (AJK) applies sales tax on a wide range of services. These taxes help generate revenue for the region while supporting specific industries. Here's a simple breakdown of the tax rates and how they apply to different services:

1. Hospitality and Event Services

• Hotels, Motels, and Clubs: A 16% tax applies.
• Marriage Halls, Lawns, and Catering Services: These services are taxed at 5%, but you cannot claim input tax adjustments or refunds.

2. Advertising Services

• TV and Radio Ads: Ads (except government-sponsored ones) are taxed at 16%.
• Hoardings, Pole Signs, and Website Ads: Also taxed at 16%.

3. Construction Services

• General Construction: Taxed at 5% if certain conditions are met (e.g., no input tax refunds allowed).
• CPEC Hydropower Projects: A reduced 1% tax applies.
• Property Developers: Taxed at Rs. 100 per square yard for land and Rs. 50 per square foot for buildings.

4. Consultancy Services

• IT and Software Development: A 16% tax applies.
• Technical and Engineering Consultants: Taxed at 16%.
• Market Research and HR Services: Also taxed at 16%.

5. Professional Services

• Legal and Corporate Law Services: A 16% tax applies.
• Accountants and Auditors: Taxed at 16%.
• Event Management and Training Services: These services are taxed at 16% too.

6. Personal Care Services

• Beauty Parlors and Clinics: Taxed at 5%, but no refunds or input tax adjustments are allowed.
• Health Clubs and Gyms: A 5% tax applies, provided the business is not air-conditioned and turnover is under Rs. 3.6 million.

7. Transport and Logistics

• Courier and Cargo Services: Taxed at 16%.
• Intercity Goods Transport: Also taxed at 16%.
• Car Rentals: A 16% tax applies.

8. Other Services

• Telecommunication Services: A higher tax of 19.5% applies.
• IT-Enabled Services: Taxed at a reduced rate of 5%.
• Cleaning and Maintenance Services: Taxed at 16%.

Special Conditions and Exemptions

• Many services are taxed with conditions, like no input tax refunds or adjustments.
• Government-sponsored or welfare advertisements are exempt.
• Small-scale construction projects and some residential projects may also qualify for exemptions.

What It Means for You

Businesses and service providers in AJK should be aware of the applicable tax rates for their industry and follow the rules to avoid penalties. While some services enjoy reduced rates or exemptions, others have restrictions like no input tax refunds. Staying compliant with these rules can help businesses operate smoothly while contributing to AJK’s growth.

This article was published at Tax Rates of Sales Tax on Services in Azad Jammu and Kashmir (AJK)