RAWALPINDI: The Punjab Revenue Authority (PRA) has succeeded in securing Rs16.586 billion from the Federal Board of Revenue (FBR) on account of cross-input tax adjustment for the years, 2012-13 to 2018-19.
Sources told Business Recorder on Wednesday that the Khyber-Pakhtunkhwa Revenue Authority had also received a similar transfer worth Rs1.4 billion from the FBR during this financial year.
The transfer of amount of Rs16.586 billion from the federal government to the PRA had been confirmed in the FBR's letters to the PRA, the FBR Member Inland Revenue Operations, and the FBR Member Strategic Planning, Reforms and Statistics, and it is reported that the PRA has received this amount (by book transfer from the federation) in the month of December 2020.
It is reported that considerable lobbying including personal efforts by the Punjab Finance Minister, Makhdoom Hashim Javan Bakht, is involved to materialize this.
The provincial finance minister also has claimed a huge collection of revenue in the first half of the year without making any reference to what has actually caused this.
When added to the receipt figures of the Punjab Sales Tax (PST) for this financial year, this will indeed make the collection figures of the PST phenomenal.
During the first five months of 2020-21, the PRA is reported to have collected Rs46.1 billion as compared to the collection of Rs42.7 billion of 2019-20, ie, growth of eight percent in revenue, the sources added.
Earlier, the FBR's note on the cross adjustment of input tax between the FBR and the PRA dated November 30, 2020, revealed that the memorandum of understanding (MoU) dated March 13th, 2014, signed between the PRA/Government of Punjab and the FBR/the federal government for the purpose of allowing mutual input tax adjustment between the Punjab Sales Tax and the Federal Sales Tax.
Under this MoU, the government whose sales tax is adjusted by the other government on higher side is required to compensate the other government with repayment of excess adjusted/transferred input tax.
All such amounts are to be ascertained through mutual/joint reconciliation.
So far, the reconciliation exercise of data relating to the years, 2012-13 to 2018-19 has been completed, as a result of which the FBR/the federal government was required to give to the Punjab government an amount of Rs17,205,422,922.
The FBR maintained that an amount of Rs619,190,000, was inadvertently deposited by a foreign airline with the PRA as provincial sales tax on services instead of the FBR as Federal Excise Duty (FED) during the period July 2015 to March 2016, and is required to be transferred from the PRA to the FBR in compliance with the directives of the High Court of Sindh.
The PRA agrees for deduction of the instant amount, which was inadvertently deposited with the PRA, from payment of reconciled amount of Rs17,205,422,922.
Therefore, the remaining amount of Rs16,586,232,922 is required to be transferred to the PRA.
It is, therefore, requested that the matter may be taken up with the Finance Division for transfer of balance amount of Rs16.586 billion for the year 2012-13 to 2018-19 to the PRA as per the SOP, as final settlement of cross adjustment of input tax for the years 2012-13 to 2018-19 between the FBR and the PRA, the FBR added.
Copyright Business Recorder, 2020