FBR in a fix as Senate body rejects Sales Tax Amendment Bill 2014

* Committee says it can’t allow tax authorities to put more burden on masses who are already suffering from price hike and joblessness

ISLAMABAD: The Senate Standing Committee on Finance on Wednesday unanimously rejected the Sales Tax Amendment Bill 2014, leaving the Federal Board of Revenue in hot water.
The bill was intended to safeguard Rs 28 billion additional sales tax collected from the CNG sector. The Senate committee met in the Parliament House and considered the proposed legislation. It, however, rejected it, remarking that it would not allow the tax authorities to overburden the masses who are already suffering from price hike and joblessness. Senator Nasreen Jalil chaired the meeting while Senator Sughra Imam, Senator Nuzhat Sadiq, Senator Haji Adeel, Senator Saleem Mandviwalla, Senator Ilyas Bilour, Finance Secretary Dr Waqar Masood Khan, Foreign Affairs Joint Secretary Waqar H Khan attended the meeting.
FBR Chairman Tariq Bajwa informed the committee about the purpose of the bill and said that there is urgent need to amend the Sales Tax Act to comply with the judgment of the Supreme Court of Pakistan. He informed the panel that the FBR had imposed 9% additional sales tax along with standard rate of 17% GST on CNG sector, however, in accordance with judgment of the Supreme Court of Pakistan this additional 9% GST has been withdraw. FBR is now charging 9% value added tax from the CNG sector. He was of the view that it is difficult for the FBR to refund the Rs.28 billion amount collected through 9% additional GST without imposing 9% value added tax. To avoid this revenue loss, FBR needs approval of Sales Tax Amendment Act 2014. He further informed that with the approval of the proposed amendment in the Sales Tax Act, there would be no negative impact on CNG price, price would remain the same as determined by Oil and Gs Development Company Limited. .
After hearing the arguments from the FBR authorities, Committee rejected the proposed bill and opined that it would not allow the authorities to over burden the masses, and would not go against the judgment of the Supreme Court of Pakistan. Senator Ilyas Bilour said that LNG imported in to the country is meant only for the province of Punjab and other three small provinces would bear the burnt of its cost.
Chairman FBR while defending the refund claims position, informed the committee that FBR has paid Rs.87.3 billion refunds which are some 14% higher then the refund claims paid in the same period of last fiscal year. He also admitted that FBR still need to clear the refund claims to the tune of Rs.97 billion in next three months and this task would be completed within this period.

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