Provincial Sales Tax on Services in Pakistan: PRA, SRB, KPRA & BRA

One of the most misunderstood parts of Pakistan's tax system is this: sales tax on services is provincial, not federal. While sales tax on goods is collected by FBR at the federal level, tax on services is charged by the province where the service is rendered — each through its own revenue authority, with its own registration, return and portal.

For any business providing services — consultants, IT firms, agencies, contractors, restaurants and many more — understanding this split is essential. This guide introduces the main provincial authorities, their standard rates, and what it means when you work across provinces.

Why services tax is provincial

Under Pakistan's constitutional arrangement, taxing services falls to the provinces. Over the years each province set up its own revenue authority to administer sales tax on services within its territory. The result is that there is no single national "services GST" — instead there are separate provincial regimes, and the one that applies depends on where the service is provided.

The main provincial authorities

The four provinces each have a dedicated authority, and services in the Islamabad Capital Territory are taxed under the federal ICT ordinance administered by FBR:

These are the standard rates. Many specific services carry reduced rates, and rates can change with each provincial Finance Act. Always confirm the current rate for your particular service with the relevant authority.

Each authority is its own system

This is the part that catches businesses out. PRA, SRB, KPRA and BRA are separate systems. Each has:

• Its own registration — being registered with one does not register you with another;
• Its own return and filing schedule;
• Its own online portal and rules;
• Its own list of taxable services and applicable rates.

So a business is not simply "registered for services tax" in general — it is registered with a specific provincial authority for services rendered in that province.

What if you operate across provinces?

If you provide services in more than one province, you may need to register with more than one authority. A firm rendering services in both Punjab and Sindh, for example, could have obligations with both the PRA and the SRB. Which authority applies turns on where the service is rendered, which is not always obvious for remote or cross-border service delivery. Our guide on which provincial authority to register with walks through how to decide.

Key point: services tax follows the place the service is rendered. Working in two provinces can mean registering with two authorities, filing two returns, and dealing with two portals.

Input tax does not flow freely between provinces

A major practical issue is that input tax paid to one province generally cannot be freely adjusted against another province's output tax, nor against federal (FBR) goods tax. Cross-adjustment is restricted. This means the tax you pay in one jurisdiction may not offset what you owe in another the way you might expect. We cover this in depth in how input tax adjustment works between provinces.

Goods vs services: don't mix them up

If your business supplies both goods and services, you have to keep the two streams separate: goods under FBR's federal GST, services under the relevant provincial authority. The rules, rates and returns are different for each. Mixing them together in your records is a common source of filing errors.

Practical steps for service businesses

1. Identify every province in which you render services.
2. Register with the correct authority in each of those provinces.
3. Apply the right rate for each service — standard or reduced — and confirm it is current.
4. File each province's return on its own schedule.
5. Keep provincial records separate so input tax and output tax reconcile per authority.

Frequently asked questions

Is there a single national sales tax on services?

No. Services are taxed provincially by PRA, SRB, KPRA, BRA and, for Islamabad, under the FBR-administered ICT ordinance. Each is separate.

Do I have to register in every province I work in?

Potentially, yes. If you render taxable services in multiple provinces, you may need to register with each relevant authority. Confirm your obligations with the authorities concerned.

Are the standard rates fixed?

No. The standard rates are a starting point; reduced rates apply to specific services and all rates can change with each provincial Finance Act. Always verify the current rate.

Iris Accounts supports provincial services tax per authority, so you can invoice and track PRA, SRB, KPRA and BRA obligations separately and keep each province's records clean.