The Punjab Revenue Authority (PRA) has been stopped from charging sales tax on developed plots after the Appellate Tribunal ruled that selling a developed plot is not a taxable service.
The tribunal cancelled PRA’s attempt to collect sales tax at Rs. 100 per square yard, stating that provinces can only tax services, not the sale of immovable property.
The case was based on whether a landowner who develops their own land—building roads, utilities, and infrastructure—and then sells plots through registered sale deeds, could be treated as a “service provider.”
The tribunal said no, because the main nature of the transaction is the transfer of land, which falls under federal jurisdiction and cannot be taxed by provinces as a service.
All orders from PRA, including tax demands, surcharges, and penalties, have been set aside.
The decision is being seen as a major relief for developers, housing schemes, and plot buyers across Punjab, removing a major cost that had raised concerns in the real estate sector.
