GST on services `illegally'' collected by FBR: Sindh asks Centre to refund Rs 213 billion

Sindh Assembly, through unanimously adopting a Muttahida Qaumi Movement (MQM)-backed resolution on Tuesday demanded of the federal government to direct the Federal Board of Revenue (FBR) to stop the "illegal and unconstitutional" practice of collecting general sales tax (GST) on services, and to refund the collected amount to the provinces.
The provincial legislature during private members day also said yes to a resolution tabled by Muhammad Shahryar Khan Mahar of PML-Q, calling upon the Sindh government to ensure availability of rice seed to farmers for the coming "peddy" (paddy) season.
The amended resolution recommended to the Sindh government to approach Islamabad to direct FBR "to immediately discontinue" collection of GST on "electricity, gas, telephones and any other service".
It also demanded of the federal government to ask FBR to refund the Service Tax collected to date to provinces, which, according to Sardar Ahmed of MQM, it had "illegally and unconstitutionally" collected around Rs 213 billion GST on gas, power and telephones services from Sindh province during 2001-02 to 2005-06.
The resolution contended that "the levy and collection of sales tax on services is a provincial subject as per Constitution of Islamic Republic of Pakistan".
Sardar strongly criticised the federal government for imposing and collecting the levy without any legal and constitutional support, and said that as per Constitution it could only impose tax on the goods, and not on services, which according to him is purely a provincial subject.
He said: "From 2001-02 to 2005-06 Rs 98 billion has been collected by the government of Pakistan on telephone service illegally. This money should be refunded so that revenue of Sindh could be increased."
He said the unjustifiably illegal tax collection for other utilities, like electricity and gas, stood at Rs 63 billion and Rs 52 billion respectively during the same period.
Water and Irrigation Minister Murad Ali Shah lashed out at the previous "dictatorial regime", which he said, had started the illegal activity under a provincial statute or an ordinance.
He also told the house that the Federal Cabinet, in response to at least two letters from Sindh Chief Minister Qaim Ali Shah, would soon take up the issue.
He said: "I hope that a civilian president, unlike the past military president, and a democratically elected government in Islamabad would listen to our voice."
Humera Alwani, Minister for Bureau of Supply and Prices, Shoaib Bukhari, Sports Minister Muhammad Ali Shah, and other members also supported the resolution.
The second resolution on rice seed was also adopted after a brief debate with members like Najmuddin Abro and Law Minister Ayaz Soomro sharing opposition''s concern over this important issue.
Earlier, the treasury and opposition members on a point of order raised various issues, like regulation of private schools and hospitals, reopening of closed schools, arrest of Pakistani fishermen by Indian navy, appointment of women lawyers for protecting women''s legal rights, embezzlement of Rs 1.3 million in irrigation department in Mirpurkhas, shortage and black-marketeering of fertiliser, and non-availability of vaccines for a minor girl bitten by 12 dogs in Katch.
During the Question Hour, Labour Minister Amir Nawab Khan responded to various supplementary questions. The provincial legislatures by approving a unanimous motion moved by Shazia Marri wished Asifa Bhutto Zardari, daughter of Benazir Bhutto and President Asif Zardari "all the best" on her birthday on February 3.
Speaker Nisar Ahmed Khuhro told the house that out of the scheduled eight, six chairmen of the standing committees had been elected on Monday, while eight each were to be elected on Tuesday and Wednesday. The Sindh Assembly will meet again on Wednesday at 10 am.