New conditions for power companies refund claims announced

ISLAMABAD (November 05 2002) : The Central Board of Revenue (CBR) has announced new conditions for claiming sales tax refund by certain power companies under section 10 of the Sales Tax Act, 1990.

This section relates to the excess amount to be carried forwarded or refunded.

The CBR had initially rejected the refund claim filed by the Rousch (Pakistan) Power Limited as per first proviso of sub-section (1) of section 10 of the Sales Tax Act, 1990. However, later on the tax authorities have reviewed earlier decision and directed the regional tax authorities to entertain the refund claim after meeting these conditions.

Sources said that power companies with similar legal status would have to fulfil these conditions to avail refund under first proviso of sub-section (1) of section 10 of the Sales Tax Act, 1990.

Hence, the CBR would entertain refund claims on fulfilment of following conditions by the above-mentioned power unit.

The stocks of fuel for which refund of unused excess input tax is being claimed have already been consumed in the generation of electric power supplied to Wapda.

The amounts of unused input tax actually relate to a 12 months old tax period or beyond September 2001.

The unit produces a certificate from Wapda that it has not paid the amounts of unused input tax claimed.

The unit agrees for deductions from the refund amounts on account of legally inadmissible components as pointed out by collector including additional tax and prescribed penalties as and if chargeable/payable thereon without going through the course of adjudication.

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