Karachi Electricity Supply Corporation (KESC) has worked out an estimated sales tax refund of Rs 3,311 million for 2007, while it has already obtained Rs 2 billion GST refund as agreed with the Large Taxpayer Unit (LTU), Karachi.
The KESC has informed the LTU, Karachi that two tranches of GST refund amounting to Rs 2 billion have been released by the tax authorities concerned.
Sources told Business Recorder on Monday that the KESC has projected a refund of Rs 3,311 million for the next 12 months (January-December 2007). The KESC has made these projections on the directive of Central Board of Revenue (CBR) to get a clear picture about the payment of refund in future.
According to sources, LTU, Karachi and KESC have settled all major tax-related issues, which were detected during the desk-audit of the corporation few months back. The first issue relates to the non-payment of Rs 100.27 million tax by the corporation. The due tax was adjusted against the refund created during the next period of November 2001.
Secondly, the case of non-payment of sales tax of Rs 464.63 million on collection received under the head of "service connection charges" during 2002-2006 was brought into the notice of KESC. The company responded that the amount received by KESC and Wapda for new connections including installation and maintenance of infrastructure are not taxable.
Thirdly, non-payment of sales tax of Rs 6.39 million on collection received under the head of meter/damaged. KESC has agreed to adjust amount of Rs 6.39 million being proceeded from sales/disposal of fixed assets.
Fourthly, the matter of non-payment of sales tax on collection of Late Payment Surcharge is subjudice with the Sindh High Court.
Fifthly, another issue related to the inadmissible input on various items. In this connection, the KESC has informed the LTU, Karachi that all those items were used for production and sale of taxable supplies and, therefore, input cannot be disallowed keeping in view the Lahore High Court verdict.
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