School Non-Salary Budget (NSB) and Taxation Guidelines in Punjab

The Government of Punjab has taken significant steps to ensure schools receive adequate financial support through the School Non-Salary Budget (NSB). The Punjab Monitoring and Implementation Unit (PMIU) and Punjab Education Sector Reform Program (PESRP) have restructured NSB to prioritize Elementary and Primary schools, focusing on need-based allocations across districts to improve school quality and performance.

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Utilization of School Non-Salary Budget (NSB)

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In the fiscal year, the Punjab government released NSB funds; however, many Headmistresses and Headmasters were unaware of the proper utilization of these funds while ensuring compliance with audit requirements. To assist school authorities in managing expenditures correctly, the following tax regulations must be considered:

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NSB Tax Rates

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Tax rates vary based on whether the firm is a Filer (registered with NTN & GST) or Non-Filer.

For Filers (Registered Firm with NTN & GST Number):

• Sales Tax: 17%
• Services Tax: 10%
• Income Tax: 4.5%

For Non-Filers:

• Sales Tax: 19.50%
• Services Tax: 17%
• Income Tax: 7.75%

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Taxation on Purchases and Services

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Whenever a school makes any purchase, different types of taxes apply, including:

• Income Tax
• Sales/GST Tax
• Sales Tax on Services / Punjab Sales Tax (PST)

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Income Tax Applicability

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Income Tax is applicable on every purchase and salary payments (e.g., Caregiver salary, Sweeper salary) except:

• Labour wages
• Utility bills

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Sales Tax Applicability

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Sales Tax is applicable to most purchases except for tax-exempted items:

• Sand, Soil, Crush
• Pana Flexes, Banners
• Medicines
• Photocopies
• Caregiver salary
• Teacher’s salary
• Utility bills

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Service Tax Applicability

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Service Tax is applicable to labour payments and must be documented with:

• Receipt (with signature, date, and time)

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Tax-Exempted Items

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Certain essential expenses are completely exempt from taxation:

• Electricity Bill
• Telephone Bill
• Mobile Balance
• TA/DA (Travel Allowance/Daily Allowance)
• Coal and Ice

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Conclusion

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The School Non-Salary Budget (NSB) plays a critical role in enhancing educational institutions by providing essential financial resources. It is crucial for school administrators to comply with taxation policies to ensure smooth financial operations and avoid legal complications.

For further guidance, school authorities should consult relevant financial and tax regulatory bodies to ensure compliance with government policies.