Law: Balochistan Sales Tax on Services Act 2015

Section: 25,27,27(1),27(2)

Background: The BRA observed that the appellant operates a business in Balochistan and is required to register as a withholding agent under the Act. Notices were issued (20.09.2023, 11.12.2023) for voluntary registration, followed by reminders and a penalty of Rs. 50,000 for non-compliance. Despite extensions granted (until 31.01.2024), the appellant failed to register. 1     The Assistant Commissioner compulsorily registered the appellant under Section 27 of the Act. The Commissioner (Appeals) upheld this order. Appellant’s Arguments: The appellant claimed it only processes meat in Balochistan and does not avail any taxable services there. Therefore, it should not be required to register as a withholding agent. Respondent’s Arguments: The appellant has a place of business in Balochistan and carries on economic activity there. As a resident under the Act, it must register and withhold sales tax on services availed in Balochistan. Tribunal’s Analysis: Definitions under the Act: "Place of Business in Balochistan" includes owning/renting space where economic activity is carried out. "Resident" includes a company with a place of business in Balochistan. Findings: It is an admitted fact that the appellant has a factory in Hub, Balochistan. Even basic activities like transporting raw materials and finished goods involve taxable services. The appellant falls under the definition of a resident with a place of business in Balochistan. Therefore, it is legally required to register as a withholding agent under Section 25. On Compulsory Registration: Since the appellant failed to register voluntarily despite notices and extensions, the BRA was justified in compulsorily registering it under Section 27. Registration does not automatically create a liability to withhold tax; it only obligates the appellant to do so when it actually avails taxable services in Balochistan. Decision: The appeal is dismissed. The orders of the Assistant Commissioner and Commissioner (Appeals) are upheld. The appellant remains compulsorily registered with the BRA as a withholding agent. Key Point: Physical presence and economic activity in…