The Technical Standing Committee constituted by the National Finance Commission (NFC) has yet to resolve the issue of collection of sales tax on five major services particularly courier services, customs agents, stevedores, ship chandlers and other port services.
It has been reliably learnt here on Saturday that the federal and provincial authorities have settled the taxability of almost all major services except reformed general sales tax (RGST) on courier services, customs agents, stevedores, ship chandlers and other port services. These services are related to imports and exports involving substantial amount of revenue, which has promoted the provinces to have the collection rights for generating provincial revenue. Except telecommunication, these five potential services contribute handsome amount of revenue in the national exchequer.
The Technical Standing Committee of the NFC was given a task on September 28 to discuss and finalise recommendations in consultation with the provinces and Federal Board of Revenue (FBR) by October 15, 2010. However, so far the Technical Committee remained unable to settle the differences on the courier services, customs agents, stevedores, ship chandlers and other port services by its deadline of October 15, 2010.
Sources said that the federal government and provinces have to resolve the issues related to the collection and distribution of revenue from proposed Reformed General Sales Tax on five services.
It has been further learnt that Sindh has already objected to the federal government''s move of giving right of tax of some five port related services to the federal government. Sindh and Punjab have different viewpoint over the sharing of RGST revenue on certain services. Punjab is of the view that revenue from few services destination of which could not be determined should be shared between the provinces on the basis of population. On the other hand, Sindh province is opposed to this idea and is demanding the federal government to share the revenue from such services according to the formula proposed by Sindh.