Key Taxable Services and Rates

• Telecommunication Services: Subject to a standard sales tax rate of 19.5%. This includes various services like voice calls, SMS, internet, and data services.
• Restaurants: Small restaurants with an annual turnover below Rs. 2.5 million are generally exempt from sales tax. However, specific conditions regarding location, ownership, and utility bills apply.
• Marriage Halls and Lawns: Standard sales tax of 15% applies, with exemptions for halls on plots less than 800 square yards. Additional conditions regarding location, ownership, and air conditioning apply.
• Beauty Parlors and Clinics: Small-scale beauty parlors and clinics with an annual turnover below Rs. 2.5 million are generally exempt from sales tax, subject to specific conditions.
• Professionals and Consultants:
  
  • Medical practitioners and consultants: Standard rate of 15%, reduced rate of 3% for certain services, exemptions for consultations below Rs. 3,000.
  • Legal practitioners and consultants: Standard rate of 15%, reduced rate of 8% for certain services.
  • Accountants and auditors: Standard rate of 15%, reduced rate of 8% for certain services, with exemptions for exported services.
• Insurance Services: Standard sales tax of 15% on most insurance services, with reduced rates and exemptions for specific life insurance policies.
• Advertisements: Standard sales tax of 15% on most advertisements, with exemptions for government-funded advertisements and public service messages.
• Hospitals and Clinics: Reduced sales tax of 3% on services for rooms and beds exceeding Rs. 25,000 per day.

Exemptions and Conditions

• Restaurants, Marriage Halls, and Beauty Parlors: To qualify for exemptions, these businesses must meet specific criteria related to annual turnover, location, ownership, utility bills, and additional services offered.
• Clubs: Certain ancillary services provided by clubs with low membership fees are exempt from tax.
• Advertisements: Government-funded advertisements and public service messages are exempt from sales tax.
• Medical Practitioners and Consultants: Services below a certain consultation fee are exempt from tax.
• Life Insurance: Certain life insurance policies are exempt from sales tax.

Key Points

• The SRB has introduced a mix of standard rates and reduced rates for various services.
• Specific exemptions are available for certain sectors and services.
• Businesses need to comply with the specified conditions to avail exemptions.
• The tax rates are subject to change based on future government policies.

It is essential for businesses to stay updated on the latest tax regulations to ensure compliance and avoid penalties.

Related Article: SRB Exemptions/Reduced Rates for Sales Tax 2025