The Punjab Revenue Authority (PRA) has designated telecommunication, banking, and insurance companies as withholding agents. These companies are now required to withhold 80% of the Punjab Sales Tax on Services when receiving taxable services, even from registered and active taxpayer service providers. The change comes through an amendment to the Punjab Sales Tax on Services (Withholding) Rules, 2015. It was enacted under Section 76 of the Punjab Sales Tax on Services Act, 2012, with the approval of the Punjab government. The amendment is effective immediately. Previously, withholding tax was not deducted when the service provider was a registered company and an active taxpayer. However, under the updated rules, telecom, banking, and insurance firms must withhold 80% of the applicable tax when availing taxable services (excluding advertisement services) from such providers. The remaining 20% must be deposited by the service provider. How It Applies to Other Companies? For all other companies, the withholding mechanism works differently. When they receive taxable services (other than advertisement services), they will withhold 20% of the tax amount. This applies even if the service provider is an active taxpayer company. The remaining 80% will be deposited by the service provider company. This move by PRA is aimed at tightening tax collection and ensuring compliance across key economic sectors. By shifting the withholding responsibility to large institutions like banks and telecom operators, the government aims to improve transparency. This move is also intended to reduce tax leakage, particularly in high-value service transactions.