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Umair Manzoor & Co.Chartered Accountants

Restaurant & Food Services

Restaurant services are taxed by the provinces, not by FBR. Provincial authorities require restaurants to issue invoices through systems linked to their own. Most of the tax work in a restaurant comes back to getting each day’s sales recorded correctly.

How money moves through a restaurant

The points where tax and accounting rules come into play are numbered.

  1. Stage 1Buy ingredientsProduce, meat and supplies bought daily or weekly.
  2. Stage 2Staff the shiftsKitchen and floor staff rostered and on payroll.
  3. Stage 3ServeDine-in, takeaway and delivery orders billed through the POS.1
  4. Stage 4Take payment and tipsCash, card, wallet and delivery-app payments received.2
  5. Stage 5Pay suppliers and payrollSuppliers, salaries and rent paid from the takings.
  6. Stage 6Month-endProvincial sales tax return filed and sales reconciled.3

Numbered points are explained below.

The three points, explained

At: Serve

Provincial sales tax on restaurant services

The sales tax on a customer’s bill can change with how they pay and whether your outlet is integrated. Services of restaurants, caterers and similar businesses are taxable under provincial law, with SRB in Sindh and PRA in Punjab, for example.

How we help

We confirm the rates that apply to each outlet and check that your invoices charge them.

At: Take payment and tips

POS integration

Integration affects the rate you charge and the records the authority sees. The Sindh Revenue Board requires restaurants to integrate their point-of-sale systems with the SRB-POS system so each invoice is reported, and other provinces have their own integration rules.

How we help

We check the requirement where each outlet operates and reconcile the POS reports to your books.

At: Month-end

Cash, card and delivery-platform sales

If cash, card, wallet and delivery-app sales do not reconcile, your sales tax return and income tax return will not agree. Each channel settles differently, and every one has to be reconciled to the POS.

How we help

We reconcile each channel to the POS so both returns rest on the same figures.

Services that apply

All services
  • Bookkeeping & Accounting

    Daily sales reconciliations across POS, cards and delivery platforms support every return.

  • Tax Returns & Planning

    Monthly provincial sales tax returns and annual income tax returns need to agree.

  • Tax Representation

    POS and sales tax notices from SRB or PRA need a documented reply.

  • Fractional CFO

    Multi-outlet operators benefit from outlet-level budgets and cash forecasts.

Questions

Still have a question?

Contact us
Does my restaurant have to integrate its POS?

In Sindh, SRB requires all restaurants to integrate with SRB-POS. Other provinces set their own rules. We check the requirement where each outlet operates.

Why is the sales tax rate different for card payments?

Provincial authorities have set different rates depending on payment method for integrated restaurants. The current rates are in the authority’s notifications; we confirm them for your outlet.