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WAPDA exempted of Sales Tax liabilities, penalties

ISLAMABAD (October 30 2002) : Admitting glaring mistake pertaining to wrongly adjudged sales tax, the Central Board of Revenue (CBR) has exempted Water and Power Development Authority (Wapda) from payment of sales tax liabilities and additional penalties on supplies of electricity from August 16 to December 31, 1999.

The tax authorities have accepted this blunder, in the sales tax order 15/2002 issued on Tuesday, which says that the liability of sales tax adjudged on the account of input tax adjusted by Wapda had accrued from a technical mistake.

According to the exemption order, notwithstanding that exemption of sales tax on electricity was withdrawn on August 16, 2002, the Ministry of Finance had clarified that Wapda will levy GST in the bills to be issued with effect from January 1, 2000.

The principal liability of sales tax adjudged in respect of electricity supplies made by the Wapda during August 16 to December 31, 1999, having been exempted under this order, any charge or demand for additional tax is not legally justified.

The liability of sales tax adjudged on the account of input tax adjusted by Wapda out of the relevant tax period had accrued from a technical mistake and the Board has condoned the out-of-tax period adjustment of input tax.

The exemption order issued by the CBR on Tuesday reads as: “In exercise of powers conferred under clause (b) of sub-section (2) of section 13 of the Sales Tax Act, 1990, read with section 34A and 74 thereof, the Central Board of Revenue is pleased to exempt, as a special case, the liabilities of sales tax adjudged against Wapda by the Collector of Customs, Sales Tax and Central Excise (Adjudication), Lahore vide Order-in-Original No. ST-13/2000, dated the 20th November, 2000 and Order-in-Original No. ST-23/2001 dated the 20th of March, 2001, in respect of supplies of electricity made by Wapda during the period from the 16th August to 31st December, 1999 (both dates inclusive), and the amount of additional tax payable by Wapda on account of the sales tax liabilities adjudged in the said order in-original for the reasons and subject to the following conditions, namely:-

(i) Notwithstanding that exemption of sales tax on electricity was withdrawn on the 16th August, 2002, the Ministry of Finance vide its letter D.O.No.F.5(44)-CF/99-2000, dated the 24th December, 1999 had, inter alia, clarified that Wapda will levy GST in the bills to be issued with effect from the 1st January, 2000;

(ii) The principal liability of sales tax adjudged under the aforesaid adjudication orders in respect of supplies of electricity made by the Wapda during the period from the 16th August, 1999, to the 31st December, 1999, having been exempted under this order, any charge or demand for additional tax accruable thereon is not legally justified;

(iii) The liability of sales tax adjudged in the above-referred adjudication order on the account of input tax adjusted by Wapda out of the relevant tax period had accrued from a technical mistake and the Board is pleased to condone the out-of-tax period adjustment of input tax; and

(iv) No refund of any amount of sales tax already paid by Wapda in consequence of or related to the above-referred adjudication orders shall be claimed or paid.

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