The Punjab Revenue Authority (PRA) has increased the sales tax rate from 5% to 8% on several service sectors across the province, with the revised rate now officially in effect.
Under the new taxation policy, businesses covered by the revised rate have been instructed to update their invoicing systems and collect 8% Punjab Sales Tax from customers in accordance with the latest regulations.
One of the most notable changes affects the food and hospitality sector. Restaurants, cafes, coffee shops, and food chains will now charge 8% sales tax on payments made through credit and debit cards. Customers using digital payment methods should expect the higher tax to be reflected on their bills.
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The revised tax rate also applies to a wide range of other service industries, including wedding halls, catering services, event management companies, travel and tour operators, rent-a-car services, fitness centers, apartment houses, property dealers, architects, warehouses, and cold storage facilities, along with additional notified service sectors.
According to the Punjab Revenue Authority, the move is part of the provincial government’s efforts to strengthen tax collection, improve revenue generation, and ensure better compliance across the services sector.
Businesses have been directed to immediately implement the revised tax rate and issue invoices that accurately reflect the new sales tax. Failure to comply with the updated regulations may result in penalties or legal action under the applicable tax laws.
Consumers are advised to review their receipts carefully, particularly when making card payments at restaurants and other affected businesses, as the updated tax rate will now be included in the total amount charged.
The increase is expected to have a direct impact on service costs across Punjab, particularly in the hospitality and leisure industries. While the government anticipates higher tax revenues, businesses and consumers alike will need to adjust to the revised taxation structure introduced by the Punjab Revenue Authority.
