KARACHI: The Sindh government, on behalf of the Federal government, has decided to resume collection of withholding tax on registration of vehicles from October 1, 2020 conditionally when the FBR authorities conceded that they had wrongly at source deducted Rs5.427 billion from provincial government account.

This was emerged in the cabinet meeting here at CM House on Wednesday. The meeting was attended by provincial ministers, advisors, Chief Secretary Mumtaz Shah, Chairman P&D Mohammad Aziz and the secretary concerned.

Sindh Chief Minister Syed Murad Ali Shah told the cabinet that the FBR had declared Excise & Taxation Department as withholding tax collecting agent without the consent of the provincial government. The Excise & Taxation department used to collect withholding tax on registration of the vehicles on behalf of the FBR, he said and added in 2016 the FBR on an incorrect information deducted Rs5.427 billion from the account of provincial government on account of withholding tax.

The Sindh government took up the matter with the FBR but the FBR authorities, instead of returning the deducted amount of RS5.427 billion to the provincial government further deducted another amount of Rs421.328 million. Ultimately, the Sindh government decided to stop collection of withholding tax on behalf of the FBR on July 1, 2020.

The CM said that he took up the matter with PM Advisor on Finance Dr Hafeez Shaikh who intervened in the matter. Finally, the FBR passed an order in which they admitted that the deduction of Rs5.427 billion from the provincial government account was based on incorrect information. The FBR shared the order with the provincial government with the request to resume collection of withholding tax on behalf of the FBR.

The Excise & Taxation department presented the matter in the cabinet and after thorough discussion the resumption of withholding tax collection on behalf of the FBR was agreed on certain conditions, such as returning of Rs5.427 billion at once and deciding the case of remaining Rs421.328 million pending in FBR and no at source deduction would be made onward.

The cabinet approved the resumption of withholding tax collection from July 1, 2020 and would communicate the conditions imposed by the cabinet to the FBR through a letter.

Renewal of lease: The minister Revenue Makhdoom Mahmoob, Advisor Law Murtaza Wahab, Chairman P&D Mohammad Waseem and SMBR Qazi Shahid parvez discussed legal position of the renewal of old leases granted for building purposes in Karachi. Their discussion is as follows:

The purpose of granting lease for building in Karachi started in 19th century with the approval of the commissioner Karachi. The expiry of these leases mostly commenced from 1962 onwards. Upon expiry the leases were renewed for another term of 99 years under Bombay Land Revenue Act.

The cabinet had constituted its sub-committee under Revenue Minister Makhdoom Mahboob who presented his report in the cabinet. The cabinet, after thorough discussion, said that there was a FBR valuation table for different localities/categories for renewal of lease. The provincial government would charge a fixed 10 percent rate above the Valuation Table of the FBR.

The cabinet approved the proposal.

Land allotment to SSGC: The Sindh cabinet on the request of SSGC approved allotment of land to it in Malir, Jamshoro and Thatta districts for laying gas pipelines. The cabinet approved to allot 5.8 acre in Deh Ghaghar, 10.27 acres in Dhabeji-I and II, and 0.18 acres in Dhabeji-I and II of Malir district at a rate of Rs15 per acre.

The cabinet also approved allotment of 18.22 acres land to SSGC in four dehs of Jamshoro district at a rate of Rs600,000. Similarly, the cabinet approved allotment of 108.29 acres in seven dehs of Thatta district at a rate of Rs400,000 and Rs700,000 of different dehs. This allotment/ lease of land has been given to SSGC for a period of 99 years.

The cabinet reiterated its stance that the provincial government would never accept RLNG. The cabinet members said that the people of Sindh have first and foremost right on the natural gas being produced from the province.

Wheat releases: The food department presented an agenda of fixation of issue price of wheat for crop 2020-21. The cabinet after thorough discussion decided to release wheat from October 10 to 15 but decided that the issue price would be fixed before the releasing date.

It was pointed out that the Balochistan government has fixed Rs4,100 per 100 kg and Punjab government at Rs3687 per 100 kg issue price.

Copyright Business Recorder, 2020