Power Distribution Companies (DISCOs) are legally bound to collect non-adjustable tax from steel melters at the rate of Re1 per unit consumed in July 2014 and to be charged through the electricity bills of August 2014. Sources told Business Recorder here on Saturday that the issue of implementation of budgetary measures 2014-15 by the DISCOs was discussed in a meeting between the Director General Power Information Technology Company (Pvt) Ltd and Regional Tax Office (RTO) Lahore.
It would ensure implementation of the budgetary measures introduced through Finance Act, 2014. According to sources, a non-adjustable tax would be collected from steel melters at the rate of Rs 1 per unit of electricity consumed. DISCO would charge income tax separately through bills of steel melters with a distinct heading. All the steel melters who are subject to sales tax @ of Rs 7 per unit of electricity would be charged with this tax. It has been decided that all DISCOs will immediately charge this levy in the bills of August vis-à-vis electricity supplied in July 2014.
A new section 235B was introduced through the Finance Act, 2014 which provides that tax @Rupee 1 per unit of electricity consumed shall be collected form steel melter, steel re-roller and composite steel units, registered for the purpose of Chapter XI of sales Tax Special Procedure Rules, 2007. The prescribed person, under this section for collecting tax, shall be the person, preparing the electricity bill in the manner electricity consumption amount is charged.
The RTO has accordingly requested PITC to inform all DISCOs to immediately carry out and implement these budgetary measures by making all necessary changes in its software/hardware/electricity bills. Since all these measures to be effective immediately, the bills of August 2014 must have all of these changes incorporated. It is imperative that all DISCOs be educated in this regard so that payments are charged, collected and deposited in August 2014 and onwards regularly on monthly basis.
On the issue of sales tax on steel melters, sources said that rate of sales tax under Rule 58H for steel melters and re-rolling composite units has been enhanced from Rs 4 to Rs 7 per unit of electricity, wef, June 4, 2014 vide SRO42I(l)/20l4. From 1st to 4th June, the rate of sales tax stood at Rs 4 per unit and from 4th June onward, the rate of sales tax would be Rs 7 per unit.
About the advance tax collection under Section 235A, sources said that the advance income tax would be collected from the domestic consumers at the rate of 7.5 percent if the electricity bill amount exceeds Rs 100,000. It is clarified that this tax is payable by DISCOs to tax department for collection on monthly basis. This tax is chargeable from July 1, 2014. The DISCOs would collect this tax showing it separately on bills. All DISCOs would immediately apply this levy in the August bill on electricity supplied in July 2014, they added.