Tubewell subsidy: ECC approached for deduction of Rs 8.27 billion GST from provinces

Ministry of Water and Power has reportedly approached the Economic Co-ordination Committee (ECC) of the Cabinet for deduction of Rs 8.27 billion GST from provinces on account of subsidy for agriculture tubewells after Punjab refused to support the decision of Finance Minister Ishaq Dar, it was learnt. Sources said that the Ministry of Water and Power has now sought approval for recovery of Rs 8.270 billion GST on power subsidy through the Federal Adjustor from the ECC.
Ministry of Water and Power in the ECC referred to a meeting co-chaired by Finance Minister Ishaq Dar and Water and Power Minister Khawaja Asif on August 26, 2013 with representatives of Kisan Ittehad Punjab at Ministry of Finance on issues of power supply and tariff to private agriculture consumers in Punjab. A number of decisions were taken during the meeting including (i) GST on subsidy would be paid by the provincial government, (ii) July 2013 electricity bill would be examined and corrected; (iii) late fee payment charges on outstanding bills till June 2013 will not be charged; (iv) payment of total existing outstanding bills by June 2013 will be made in 10 equal monthly instalments; (v) during peak hours ie (6 -10 PM in winter and 5-11 PM in summer) agri tubewells will not be supplied electricity; (vi) rate from tubewells will be charged at the fixed price of Rs 10.35 per unit and will applicable till 30.06.2014.
Ministry of Water & Power has conveyed the agreed decisions to distribution companies (DISCOs) of Punjab for implementation on August 2 2013. Subsequently the subsidy scheme was also extended to Discos of Sindh (Sepco/Hesco) & Khyber Pakhtunkhwa (Pesco) in pursuance of direction of Finance Division on February 10, 2014. However, Punjab government has refused to pay the GST on subsidy and clarified that the decision on payment of GST was recommended by Ministry of Water & Power but was not endorsed by the government of Punjab.
Ministry further stated that Finance Division was requested to direct provincial governments including government of Punjab to pay GST to discharge their liabilities. In response, Finance Division advised Ministry of Water & Power to prepare financial implications of subsidy till June 2014 and submit the case to the ECC of the Cabinet for its approval. The Discos submitted that receivables of GST from the provincial governments would escalate to Rs 8270.946 million by 30th June 2014. The Ministry of Water and Power has submitted a proposal to the ECC for approval of the ECC on all the decisions taken in the meeting held on August 26, 2013 with the representatives of Kisan Ittehad.