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| October 25, 2001 | Thursday | Shaba'an 7, 1422 |
AJK asks Wapda to pay GST on Mangla dam power
ISLAMABAD, Oct 24: The Azad Kashmir government has demanded general sales tax (GST) on electricity that Water and Power Development Authority (Wapda) is generating from Mangla Dam, Dawn has learnt.
Azad Kashmir government sources told Dawn that the demand had been conveyed to the federal government and Wapda in writing.
All the tax collection in Azad Kashmir is totally separate from the federal government but due to some anomalies, Wapda was paying the GST on electricity produced from Mangla to the Central Board of Revenue instead of the AJK government, said these sources.
Wapda sources confirmed that the AJK had demanded GST on Mangla dam power but said it had referred the issue to the Chief Executive Gen Pervez Musharraf for a decision because this could pave the way for similar demands from the provincial governments.
“First we thought the GST should be paid to AJK government because there was no difference whether Wapda paid tax to AJK or the CBR but then decided to seek the federal government’s directive,” said a senior Wapda official.
Around Rs25 billion is collected as the GST on electricity sale every year.
“The GST on power from Mangla may be in the region of Rs1 or two billion. As such the amount is not important though legal implications need to be looked into,” he said.
Mangla could generate a maximum of 27.6 million units per day which means that per month generation could be around 810 million units at the maximum.
The average consumer tariff of Wapda is around Rs3.57 units. Annual GST on power generation could go up to Rs5 billion or remain in the vicinity of Rs3 billion depending on the water availability and generation.
Wapda sources believe that the move by the AJK government to collect GST on electricity could be used as a step to formalize a claim on Mangla Dam’s royalty to Azad Kashmir on the pattern of hydel power profit to North West Frontier Province (NWFP).
“The state government is paying normal rates for electricity to the utility instead of being paid by the utility for Mangla power production. If the NWFP could be paid Rs6 billion every year for Tarbela hydel profit why not AJK for Mangla,” said a senior official in the AJK government.
Sources in the power ministry, however, said that royalty, hydel profit or the GST could not be paid to the AJK government due to constitutional and legal complications emanating from peculiar “disputed status” of Jammu and Kashmir.
The AJK government has been raising with the federal government the payment of Mangla dam royalty and other properties in various parts of the country but the question remained unattended due to legal and constitutional difficulties.
Electricity to AJK consumers was supplied by Wapda at a flat and subsidized rate of around Rs1.60 per unit till last year.
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