Security agency association wants withdrawal of 10% GST

Laments non-payment from clients, says companies pay it out of their pocket.

KARACHI:

All Pakistan Security Agencies Association (APSAA) Chairman Col (r) Tauqirul Islam has urged the Sindh government to withdraw the 10% general sales tax (GST) imposed on security agencies or collect it from clients directly.

He was speaking to a press conference here on Friday at the head office of Karachi Chamber of Commerce and Industry (KCCI).

“Most of our clients are not paying this tax to the security agencies,” he said. “Resultantly, agencies are forced to pay this tax themselves to the Sindh Revenue Board (SRB) to avoid any legal actions.”

“So far, we have paid this tax to sustain our business, but due to the shortage of cash flows, we are now unable to move on,” he added.

In the last provincial budget, the Sindh government introduced 10% GST on security agencies. According to APSAA, the association has already paid Rs200 million to the government without recovering this amount from its clients (companies that take services of guards). They say over 90% companies do not pay this tax which is now creating problems for the security agencies.

“We want the government to collect this tax directly because we have failed in collecting it from our clients (industries, banks). They are powerful and we cannot force them to pay this tax,” he stressed.

After the 18th Amendment, provinces are allowed to collect GST on services. Sindh and Punjab – two provinces with their own revenue collection boards – collect 10% and 16% GST from security agencies respectively.

Islam also said that it is heartening to note that Home Secretary for Sindh, Dr Niaz Abbasi has initiated a crackdown against these illegal companies whereas a similar one is likely to start in Punjab as well.

Published in The Express Tribune, May 10^th, 2014.

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