Starting July 1, 2025, the Federal Board of Revenue (FBR) has introduced General Sales Tax (GST) rates ranging from 5% to 15% on a broad spectrum of services within the Islamabad Capital Territory.
Most services are now subject to the standard 15% GST, including:
- Hotels, guest houses, motels, farmhouses, and clubs
- Marriage halls, lawns, and event venues
- Advertising on TV and radio, except for government-sponsored or public service campaigns
Restaurants: Dual Tax Rates Based on Payment Method
Dining establishments will be taxed based on how customers pay:
- 5% GST applies to payments made digitally (debit/credit cards or QR codes), without input tax credit or refund
- 15% GST applies to cash payments
Transport, Courier & Shipping Services
A 15% tax will apply to:
- Courier companies
- Customs agents
- Stevedores
- Ship chandlers
- Road cargo services
Construction & Real Estate
Construction services will be taxed at 15%, but exemptions apply to:
- Small-scale residential or commercial developments
- Government projects
- Foreign-funded initiatives
Property developers and builders will be taxed at fixed rates:
- Rs. 100 per square yard for land development
- Rs. 50 per square foot for construction work
(Land cost is not included in the taxable amount.)
Contracting Services
Contractor services will also face 15% GST, unless:
- The annual contract value is below Rs. 50 million
- The contract involves book printing, which is exempt
Personal Care Services
Beauty parlours, massage centers, and slimming clinics are included under the 15% GST umbrella. However, a reduced 5% tax will apply if the business:
- Operates without air-conditioning, or
- Has an annual turnover below Rs. 3.6 million
(This reduced rate comes without any input tax credit.)
Other Taxed Services (15%)
Additional services affected by the 15% GST include:
- Management consultancy
- IT and IT-enabled services
- Engineering and scientific consultancy
- Freight forwarding
- Packers and movers
- Travel agents and tour operators (excluding Hajj and Umrah services)
- Security service providers
- Advertising agents
