Tax experts of the newly established Sindh Revenue Services are likely to brief the officials of the Ministry of Finance (MoF) and Federal Board of Revenue (FBR) in the federal capital on Monday about the new mechanism to collect general sales tax (GST) on Services, it is learnt.
According to sources, a team of the Sindh Revenue Services, along with senior officials of Finance Department, headed by Secretary Finance Dr Fazalullah Pechuho, is expected to meet the officials of the MoF and FBR and brief them about the mode of collecting GST on Services by the Sindh government, after its transfer to the province.
The Sindh government has remained firmed on its stance to collect GST on Services, on its own, as the federal government could not convince Sindh over imposition of controversial value-added tax (VAT) in the meeting held recently in Islamabad.
Under the Constitution of 1973, the provinces are authorised to impose and collect VAT on services, they added. However, the federal government has been trying to impose the VAT on services in order to get release the promised tranche of the International Monetary Fund (IMF) after complying with its condition, they said, adding that country could face further economic crises if the tranche was delayed further.
After signing of the National Finance Commission (NFC) Award, the provincial government had recently established Sindh Revenue Services, an autonomous body, to collect VAT on services independently. Sindh Revenue Services has the capacity to undertake modern IT-based Tax Collection System with highly experienced and qualified staff, they said and added that initially it would collect the GST on Services and other taxes at later stage as well.
Sources said that VAT on Services is a provincial issue but all the three provinces including Balochistan, Punjab and NWFP (now Khyber Pakhtoonkhwa) (KP) had reached an understanding that the FBR would collect the tax on behalf of the provinces. However, Sindh did not go with other provinces and decided to collect VAT on services through its own mechanism, they said.
Moreover, they said, officials of the Sindh Revenue Services and Finance Department are expected to brief the officials of MoF and FBR about the functioning of this newly established Department such as system of assessment and collection of the GST on Services and record keeping, accounting, reporting and strengthening of Sindh''s fiscal base.