May 7, 2006	Sunday	Rabi-us-Sani 8, 1427

KARACHI, May 6: The Central Board of Revenue (CBR) and Sindh Finance Ministry will reconcile their accounts on excise duty paid by telecom operators to determine their share in the excise duty collected. They will be needed to finish the exercise within a week or so as the financial year is coming to a close.

The actual amount of jumble-up excise duties (federal and provincial) would only be known when the two sides would sit together to calculate the amount of federal excise and the Sindh excise separately paid by the sellers of calling cards on monthly basis.

There is a federal excise duty at the rate of 10 per cent on telecom operators in addition to 15 per cent sales tax and also a provincial excise duty on the service provided by them.

The mix-up of excise duty was detected by the FED Department during audit of federal excise duty (FED) returns filed monthly by the telecom operators. They found out that the proper head of the FED was not mentioned in the monthly returns filed in the bank. Some operators, probably unintentionally deposited Sindh excise duty along with the sales tax which went to the CBR’s account when it should have been submitted separately.

“The telecom operators while paying excise duty did not make any distinction between the federal and provincial excise,” sources at the FED Department told Dawn on Saturday.

They said that under the rules the telecom operators dealing in calling cards should have deposited the provincial excise duty and federal excise duty through separate challans.

A senior official on the condition of anonymity commented that the mix-up of excise duties would not create any problem between the province and the federation, which are already at loggerheads on issue of resources’ allocation. “The two departments have established contacts and are reconciling accounts to make a fair settlement of excise duty amount between them calculated on the basis of their specified rates.”

The Federal Excise Department had written to telecom operators to mention the relevant HS code for payment of FED in the challan in future. With the mentioning of the proper HS code the amount deposited would be credited to the proper account, he added. He said that to facilitate the taxpayers the CBR had allowed them to pay sales tax and excise duty in one challan filed on 15th of every month.