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Punjab Sales Tax on Services Act, 2012 QUESTION #2567
Question 1
According to section 4(5) of the Act, where a taxable service originates from outside Pakistan but is received or terminates in the Punjab, the liability to pay tax to the Government falls upon:
  • The foreign service provider
  • The Federal Board of Revenue
  • The recipient of such service in Punjab✔️
  • The Punjab Revenue Authority itself
Correct Answer Explanation
Section 4(5) explicitly states that where a taxable service originates from outside Pakistan but is received or terminates in the Punjab, the RECIPIENT of such service shall be liable to pay the tax to the Government — establishing the reverse charge mechanism for imported services.