If you provide services in Punjab, your business may be subject to provincial sales tax on services, collected by the Punjab Revenue Authority (PRA). Many service providers are unaware of this until a client asks for their PRA registration or a notice arrives. This guide explains the basics.
What is PRA?
The Punjab Revenue Authority administers sales tax on services in Punjab under the Punjab Sales Tax on Services Act, 2012. It is separate from FBR, which administers sales tax on goods and federal income tax.
Which services are taxable?
The Act lists the services subject to tax. Common examples include:
- construction and contractual services,
- restaurants, caterers and hotels,
- advertising, marketing and media services,
- IT and software services, in certain cases,
- consultancy and professional services,
- beauty parlours, gyms and many other personal services,
- courier, cargo and logistics services.
Rates and conditions vary by service, and some services may have reduced rates or exemptions. Check the current schedule before invoicing.
Who must register?
Any person providing taxable services in Punjab, from an office or place of business in the province, is generally required to register with PRA, subject to thresholds and exclusions in the law.
How to register with PRA
- Make sure you have an FBR NTN.
- Apply on PRA’s online system with business, premises, bank and owner details.
- Upload the required documents, such as CNICs, premises proof and, for firms and companies, the partnership deed or incorporation documents.
- Once approved, you receive your PRA registration and can start charging tax on taxable services.
Monthly obligations
- Charge tax on taxable services at the applicable rate and show it on your invoices.
- File monthly returns on PRA’s system, including nil returns where applicable.
- Pay the tax collected by the due date.
- Keep records of invoices, contracts and payments.
Withholding of PRA tax
Certain businesses and organisations that receive services are designated as withholding agents and must deduct PRA tax when paying service providers. If you are a withholding agent, you must deposit the deducted tax and file the related returns. If you are a service provider, keep track of tax withheld from your payments.
PRA and FBR together
A business that sells goods and also provides taxable services may need to be registered with both FBR and PRA. Each registration has its own returns. Keeping both sets of filings consistent with your income tax return is important.
Services in more than one province
Each province has its own authority for sales tax on services, such as the Sindh Revenue Board in Sindh. If you provide services in several provinces, you may need to consider registration in each. The rules on where a service is provided can be technical, so get advice.
Practical example: a marketing agency in Lahore
A small digital marketing agency in Lahore works with local businesses. A new corporate client asks for the agency’s PRA registration number before releasing payments, and mentions that it will withhold PRA tax as required. The agency confirms that its advertising and marketing services are taxable under the Punjab law, registers with PRA, begins charging the applicable tax on its invoices and files monthly returns. It also tracks the tax withheld by its corporate clients so that it can account for it correctly in its returns.
Invoices under PRA
- Show your PRA registration number on invoices.
- Show the value of the service and the tax charged separately.
- Include the customer’s details, especially for business customers.
- Number invoices serially and keep copies.
Common compliance pitfalls
- Assuming that FBR registration covers services. It does not cover provincial sales tax on services.
- Charging the wrong rate because the service falls under a different category.
- Not filing monthly returns in months with no billing.
- Not reconciling tax withheld by clients with tax charged on invoices.
- Ignoring PRA notices or emails.
Withholding agents: what to do
If your organisation is a withholding agent under the Punjab rules, you must deduct PRA tax from payments to service providers as prescribed, deposit it within the time allowed and file the related statements. Failure to deduct can make you liable for the tax yourself. Keep a register of payments and deductions.
Monthly routine for PRA-registered businesses
- Issue invoices with tax for every taxable service.
- Record payments received and any tax withheld by clients.
- Prepare the monthly return and calculate tax payable.
- Pay the tax and file the return by the due date.
- Keep copies of the return and payment evidence.
Expert tips
- Check the current schedule of services and rates at least once a year, as changes are common.
- If you serve clients outside Punjab, get advice on which province’s law applies.
- Keep your PRA, FBR sales tax and income tax figures consistent.
Key terms explained
- PRA: Punjab Revenue Authority, which administers sales tax on services in Punjab.
- Taxable service: A service listed in the Punjab law as subject to sales tax.
- Withholding agent: A person required to deduct PRA tax from payments to service providers and deposit it.
- Nil return: A return filed for a period in which no taxable services were billed.
Frequently asked questions
Is PRA registration compulsory for freelancers?
It depends on the service, where it is provided and the applicable rules. Many export-oriented services are treated differently. Get advice for your case.
Can I register with PRA online?
Yes. Registration and returns are handled through PRA’s online system.
What if I did not register when I should have?
Register as soon as possible. PRA may impose penalties for late registration and unpaid tax, so it is better to regularise early.
Do I file PRA returns monthly?
Yes, registered persons generally file monthly returns.
Need PRA registration?
We check whether your services are taxable, register you with PRA and file your monthly returns. See our PRA registration service or WhatsApp us at +92 329 9554206.
How Tax & Law Hub can help
We support manufacturers, traders and service providers with:
- FBR sales tax registration and STRN applications,
- Punjab Revenue Authority registration,
- monthly sales tax and PRA returns, including nil returns,
- replies to sales tax and PRA notices.
Many clients hand over their monthly compliance to us so that deadlines are never missed.
This article is general information about Pakistani tax, corporate and legal procedures and is not advice for your specific situation. Laws, rates and procedures change, especially through annual Finance Acts. Last reviewed: November 2026. For advice on your case, contact Tax & Law Hub.
