PUNJAB FINANCE ACT 2021

Exact source transcription retained, including print layout and extraction artifacts. Text SHA-256: b30a6bf603bbcb79547fc567cfcf281dcdf0345d2577ee132bd2a5d876e3609d.

THE PUNJAB FINANCE ACT 2021 
(XIX of 2021) 
CONTENTS 
1. Short title, extent and commencement 
2. Repeal of Act X of 1958 
3. Amendment of Act XXXII of 1958 
4. Amendment of Act XV of 1977 
5. Amendment of Act XLII of 2012 
6. Amendment of Act XXX of 2015 
7. Special relaxations for financial year 2021-22 
 
  
 
 
TEXT 
 
1THE PUNJAB FINANCE ACT 2021 
  (XIX of 2021) 
    [30th June 2021] 
 
 
An 
Act 
to levy, alter and rationalize certain taxes and duties in Province of the Punjab. 
It is necessary in public interest to levy, alter and rationalize certain taxes and duties 
in the Punjab; and, to deal with ancillary matters. 
Be it enacted by Provincial Assembly of the Punjab as follows: 
1. Short title, extent and commencement .─ (1) This Act may be cited as the 
Punjab Finance Act 2021. 
 (2) This Act extends to whole of the Punjab. 
 (3) This Act shall come into force on the first day of July 2021. 
 
2. Repeal of Act X of 1958 .─ The Punjab Entertainments Duty Act, 1958 (X of 
1958) is hereby repealed. 
 
3. Amendment of Act XXXII of 1958 .─ In the Punjab Motor Vehicles Taxation 
Act, 1958 (XXXII of 1958), in the Sc hedule, in entry at Sr. No. 4, for the Explanation, 
the following shall be substituted: 
“Explanation.- An exemption at the rate of 75 percent in motor vehicle tax in 
respect of electric vehicles shall be granted till 30.06.2022.”. 
 
4. Amendment of Act XV of 1977.─ In Punjab Finance Act, 1977 (XV of 1977), 
in Second Schedule: 
 (a) for entry at Sr. No.3, the following shall be substituted: 
Sr. 
No. 
Class of Persons Rate of tax per 
annum (rupees) 
“3 (i) Persons other than companies 
owning commercial establishments 
having 10 or more employees 
(a) Within metropolitan and 
municipal corporation limits 
 
6,000/- 
(b) Others 4,000/- 
(ii) All other commercial 
establishments other than wholesalers 
and retailers 
2,000/-” 
                                                      
1This Act was passed by Provincial Assembly of the Punjab on 25 June 2021; assented to by the Governor of the Punjab on 30 
June 2021; and, was published in the Punjab Gazette (Extraordinary), dated: 30 June 2021, pp.10047-10050. 
 
 
 
(b) in entry at Sr. No. 6, in category (vii), in subcategory (d), for the words 
“Motor Car” the words “Motor Vehicle” shall be substituted; and 
(c) after entry at Sr.No.10, the following entry shall be inserted at Sr.No.11; 
Sr. 
No. 
Class of Persons Rate of tax per 
annum (rupees) 
“11 Persons who are engaged in a 
profession, trade, calling or employment 
who were assessed to pay income tax 
during the preceding financial years”. 
200/-” 
5. Amendment of Act XLII of 2012 .─ In the Punjab Sales Tax on Services Act 
2012 (XLII of 2012): 
(a) in section 2: 
(i) clauses (1) and (1A) shall be renumbered as (1A) and (1B) 
respectively, and before clause (1A) as renumbered, the 
following clause (1) shall be added:  
“(1) “active taxpayer” means a registered person: 
(i) whose registration has not been suspended or 
blacklisted by the Authority; and 
(ii) who has filed his tax return for at least one of the 
preceding three consecutive tax periods;” 
(ii) in clause (11), in sub -clause (a), for the expression “the 
Companies Ordinance, 1984 (XLVII of 1984)”, the expression 
“the Companies Act, 2017 (XIX of 2017)” shall be substituted; 
(iii) after clause (41), the following clause (41A) shall be inserted: 
“(41A) “Standard Rate” means sixteen percent”; 
(b) after section 10, the following section 10A shall be inserted:  
“10A. Option to charge tax at standard rate.─ (1) Where any service 
or class of services is chargeable at a reduced rate under the Second 
Schedule, any person or class of persons providing such service or 
services may, with the permission of the Authority, opt to charge sales 
tax at the standard rate subject to such conditions, restrictions and 
limitations as may be specified by the Authority. 
(2) The permission granted under subsection (1) shall be 
irrevocable except with the permission of the Authority. 
(3) Where the Authority has reasons to believe that the 
taxpayer has misused the option, the Authority may withdraw the 
permission granted under sub section (1) at any time after affording an 
opportunity of being heard.”; 
 
(c) in section 48: 
 
 
(i) in entry at S. No. 20, in column 4, for the expression “59A”, the 
expression 59B shall be substituted; 
(ii) after entry at S. No. 20, the following entry 21 shall be added:  
Sr.No. Offence Penalty Section 
“21 Where a registered 
person charges 
sales tax in excess 
to the rate provided 
in the Second 
Schedule 
Such person shall be 
liable to pay a penalty 
of rupees ten thousand 
per invoice or ten 
percent of the invoice 
amount, whichever is 
higher  
10”; 
(d) in section 59, in sub-sections (1) and (2), after the word “provision”, the 
words “and receipt” shall be inserted; 
(e) in section 65, sub-sections (7) and (8) shall be omitted. 
(f) in the Second Schedule: 
(i) in entry at S.No.7, in column (4), after category (a), the following 
category (aa) shall be inserted: 
“(aa) Five percent for insurance agents and insurance 
brokers”; 
(ii) in entry at Sr.No.11, in column (4), in category (a), after the 
words “credit cards” the expression“, mobile wallets or QR 
scanning” shall be inserted; 
(iii) in entry at Sr.No.40, in column (4), in category (a), after the 
words “agricultural produce” t he words “and home chefs” shall 
be inserted; 
(iv) in entry at Sr.No.41, in column (4), for the words “Nineteen and 
a half” the word “Sixteen” shall be substituted; 
(v) in entry at Sr.No.48, in column (2), the expression “inter -city” 
shall be omitted; 
(vi) in entries at Sr. No. 18, 33, 34, 44, 50, 61, 64 and 65, in column 
(4), for the existing categories, the following shall be substituted: 
“Five percent without input tax adjustment” 
(vii) after entry at Sr.No.69, the following entry shall be added at Sr. 
No 70: 
Sr. No Description Classification, if 
applicable Rate of Tax 
(1) (2) (3) (4) 
“70 
Entertainment services 
(including cinemas, 
theatres, concerts, 
circus, sports events, 
races, film, fashion 
- 
Zero percent 
without input 
tax 
adjustment” 
 
 
shows and mobile stage 
shows) 
6. Amendment of Act XXX of 2015.─ In the Punjab Infrastructure Development 
Cess Act 2015 (XXX of 2015), in section 6, in subsection (1): 
(a) for the word “and” appearing for the second time, a comma shall be 
substituted; and 
(b) after the word “Punjab” appearing for the second time, the expression 
“, and the goods exempted by the Federal Government from payment 
of duties and taxes for import” shall be inserted. 
7. Special relaxations for financial year 2021 -22.─ (1) Notwithstanding 
anything contained in sections 3 and 12 of the Punjab Urban Immovable Property 
Tax Act, 1958 (V of 1958), for the financial year 2021-22: 
(a)  discount equal to five percent of the tax being paid shall be allowed on 
payment of tax through e-payment system;  
(b) the tax shall be paid on yearly basis or half yearly basis as the 
assessee may choose or the such later date as the Government may 
by notification determine, and 
(c) for financial year 2021-22, the tax shall be collected as follows: 
(i) in first quarter with five percent rebate in the amount of annual 
tax; 
(ii) in second quarter, the amount of annual tax without any rebate; 
and 
(iii) in third and fourth quarters, the amount of annual tax with one 
percent surcharge per month on the gross payable tax.  
(2) Notwithstanding anything contained in sections 3 and 9 of the Punjab Motor 
Vehicle Taxation Act, 1958 (XXXII of 1958), for the financial year 2021-22: 
(a) discount equal to five percent of the tax being paid shall be allowed on 
payment of tax through e-payment system;  
(b) for financial year 2021-22, the tax shall be collected as follows: 
(i) in first quarter with ten percent rebate in the amount of annual 
tax; 
(ii) in second quarter, the amount of annual tax without any rebate; 
and 
(iii) in third and fourth quarters, the amount of annual tax with such 
penalty as may be determined under section 9.  
(3) This section shall remain in force till 30th day of June 2022.