Fact-check: True. Punjab has increased sales tax on restaurant bills paid by card to 8%

After the Punjab Assembly passed the provincial budget, a claim began circulating online that the Punjab government had increased the sales tax on restaurant bills paid through debit and credit cards from 5% to 8%.

The claim sparked confusion among consumers, with many questioning whether the revised rate had officially come into effect across the province.

The claim is accurate.

Claim

On July 6, an Instagram user shared a graphic claiming that the Punjab government had increased the sales tax on hotel and restaurant bills paid through debit and credit cards from 5% to 8%.

At the time of writing, the post had received more than 640 likes and 41 comments.

The same claim was also shared on Facebook, X and TikTok.

Fact

The Punjab Revenue Authority (PRA), the provincial body responsible for collecting sales tax on services in Punjab, confirmed that the sales tax on hotel and restaurant bills paid through debit and credit cards has increased from 5% to 8%, effective July 1.

Speaking to Geo Fact Check by phone, Talha Malik, the public relations officer (PRO) at the Punjab Revenue Authority, said the revised rate was introduced to align Punjab with the tax rate already applicable in other provinces.

"Punjab previously charged 5% on card payments, whereas the rate in the other provinces was 8%," Malik said. "Punjab has now rationalised the rate in line with the rest of the country." As a result, restaurant bills paid through debit and credit cards are now subject to the sales tax rate of 8%, he added.

Malik clarified that customers paying in cash will continue to be charged 16% sales tax on services.

He further confirmed that the revised rate came into effect on July 1, 2026, and is currently in force.

Geo Fact Check also reviewed the Punjab Finance Act 2026. The amendments have increased the sales tax rate on hotel and restaurant bills paid through debit cards, credit cards, mobile wallets and QR code payments from 5% to 8%.

Geo Fact Check also independently verified the revised tax rate with restaurants in different cities across Punjab, all of which confirmed that the sales tax on eligible digital payments has increased to 8%.

Verdict: Punjab has increased the sales tax on restaurant bills paid through debit and credit cards from 5% to 8%, effective July 1, 2026.

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