The Central Board of Revenue (CBR) will approach the State Bank of Pakistan (SBP) for reconciliation of data on banking services, as Federal Excise Duty (FED) collection result from these services is not satisfactory.
Sources told this scribe on Saturday that the Board had taken the decision in the last collectors' conference to take effective measures for improving FED collection on provision of banking services. Banking services are considered to be top revenue spinner in last budget with estimated projections of Rs 2.2 billion.
On the other hand, collectors of sales tax informed CBR that the payment of FED by banks on banking services was not as per estimates. Most of the collectorates gave the same viewpoint in the recent conference, sources said.
The CBR has decided to take up the matter of FED payment on banking services by banks with SBP for reconciliation of service related data. The CBR and SBP would verify bank-wise data in this regard.
The Large Taxpayer Unit (LTU), Karachi, collected Rs 43.359 million from non-fund banking services in September 2006; Rs 40.985 billion in August and Rs 36.104 million in July 2006-07. Out of 31 banks, registered with the LTU, Karachi, 29 banks had submitted their returns. The revenue is likely to be increased following compliance by the banks, the data added.
The federal government had also imposed 5 percent federal excise duty on banking services in the budget. The banking services liable to 5 percent FED are L/C commission, guarantee commission, brokerage commission, issuance of pay order and demand drafts, bill of exchange charges, transfer of money including telegraphic transfer, mail transfer and electronic transfer, providing bank guarantees, bill discounting commission, safe deposit lockers fee, safe vaults, credit and debit card issuance, processing, operation charges and commission and brokerage on foreign exchange dealings.