PRA hails likely withdrawal of amendment through Finance Act

The Punjab Revenue Authority (PRA) has welcomed the reports that the federal government is ready to withdraw amendment introduced through Finance Act 2016 disallowing input tax adjustment against provincial services provided provinces are ready to pay due amount to the FBR on account of tax adjustments.
A PRA spokesperson said on Friday that it welcomed the initiative in the best public interest. The PRA has always been an advocate for the facilitation of taxpayers and their due rights. However, it is clarified that the Punjab province does not owe any amount to the Federal Board of Revenue (FBR) on account of input tax adjustment. Instead, as a stakeholder, the PRA had worked closely with the FBR in the light of MoU dated March 13, 2014, which was signed between the FBR, Finance Division, and the PRA wherein it was agreed that both the FBR and the PRA will periodically work out and settle their revenue accounts in the light of their respective cross input tax adjustments.
The spokesperson further said that as per initial working up to April 2015, the FBR owed a huge amount to the Punjab province on account of input adjustment claims which runs into billions, part of which has already been conceded as payable by the FBR to Punjab.
The PRA has been seeking immediate payment of the already conceded amount and has also requested the FBR to complete the remaining reconciliation process at the earliest. It hopes that the initiative taken by Federal Finance Minister Ishaq Dar and Adviser to the Prime Minister on Revenue Haroon Akhtar Khan will definitely redraw the terms of understanding between the FBR and the provincial revenue authorities in the broader perspective of VAT system keeping in view the taxpayers' rights.
Similarly, it will also create an opportunity to resolve the intra-provincial issues under the umbrella of federal finance ministry on cross-border and multiple taxation issues.
Since the province of Punjab is the biggest stakeholder in the issue, the PRA is also perturbed at the reports that the Federal Board of Revenue (FBR) is engaging with the Sindh Revenue Board (SRB) in deciding the principles of input adjustment without consulting the province of Punjab. Any arrangement without involving the province of Punjab and other smaller provinces will be counter-productive and may not lead to a satisfactory solution to the problem, the spokesperson concluded.