FBR Imposes 15% GST on Marriage Halls, Hotels, Clubs, Farmhouses in Islamabad

The Federal Board of Revenue (FBR) has imposed a 5-15 percent General Sales Tax on a wide range of services in the Islamabad Capital Territory from July 1, 2025. Most services are now subject to a 15 percent GST, including those provided by hotels, motels, guest houses, farmhouses, marriage halls, lawns, and clubs. Advertisement services on television and radio are also taxed at 15 percent, except in specific government-sponsored or public interest campaigns. Restaurants will face a dual rate: 5 percent tax if payments are made through digital means such as debit/credit cards or QR codes, without any input tax adjustment or refund; and 15 percent if paid in cash. A 15 percent tax will apply to services by customs agents, stevedores, ship chandlers, courier companies, and cargo services by road. Construction services will be taxed at 15 percent with exemptions for smaller residential or commercial projects, government works, and certain foreign-funded developments. For property developers and promoters, a fixed charge of Rs. 100 per square yard for land development and Rs. 50 per square foot for construction will apply, excluding land cost. A 15 percent tax is also applicable to services offered by contractors, except where annual value does not exceed Rs. 50 million or involves book printing. Personal care services, including beauty parlours, massage centres, and slimming clinics, will be taxed at 15 percent, with exceptions for businesses without air-conditioning or with a turnover under Rs. 3.6 million, which will be taxed at 5 percent without input tax credit. Additional services taxed at 15 percent include management consultancy, IT and IT-enabled services, engineering and scientific consultancy, freight forwarding, packers and movers, tour operators, travel agents (excluding Hajj and Umrah), security agencies, and advertising agents.