News
Sunday, October 17, 2010
Centre, provinces fail to reach consensus on R-GST
* Issue of distribution of revenue from R-GST on courier services, customs agents, stevedores, other port services not resolved yet
Staff Report
ISLAMABAD: The federal government and the provinces have failed to resolve the issues relating to the collection and distribution of revenue from the proposed Reformed General Sales Tax (R-GST) on five services, official sources said on Saturday.
Despite a dispute on the said services, federal authorities had been confident that the draft legislation of the R-GST would be ready by the deadline of October 22.
In case the deadline is met, the federal government would table the draft Reformed General Sales Tax Bill, 2010 in the National Assembly and all four provincial governments would lay their legislation on the R-GST on services in their respective provincial assemblies before November 1, the sources said.
The sources said the federal and provincial authorities had settled the taxability of almost all major services except R-GST on courier services, customs agents, stevedores and other port services. A technical standing committee constituted by the National Finance Commission (NFC) had been given a task on September 28 to discuss and finalise recommendations in consultation with the provinces and the Federal Board of Revenue (FBR) by October 15. However, the sources informed that the technical committee had failed to settle differences on courier services, customs agents, stevedores, ship chandlers and other port services by its deadline of October 15.
According to the official sources, Sindh had already strongly objected to the federal government’s move of giving right of tax of around five port related services to the federal government.
Sindh and Punjab are also at loggerheads over the sharing of the R-GST revenue on services. Punjab is of the view that the revenue from a few services, the destination of which could not be determined should be shared between the provinces on the basis of population. On the other hand, Sindh has opposed this idea and had been demanding the federal government to share the revenue from these services according to the formula proposed by the province.
Its worth mentioning here that Pakistan’s economic managers had already committed with the IMF to lay the draft legislation on the R-GST in the National Assembly as well as in all the four provincial assembles by the third week of October.
Courtesy www.dailytimes.com.pk