LAHORE: The Punjab Revenue Authority on Thursday imposed Rs9.491 billion sales tax on the National Highway Authority in two cases.
The PRA levied Rs8.13bn tax in one case and Rs1.36bn in another case after the NHA failed to comply with the withholding rules of the PRA on construction, contractual execution of works and repair and maintenance services. “Under right to appeal, the NHA may contest the tax calculation in the office of PRA’s commissioner (appeals), failing which the amount (Rs9.491bn) shall be considered as final and liable to be recovered under the law,” says a spokesperson for PRA in a statement.
According to notices served by the PRA, the highway authority didn’t deduct tax on services while releasing payments to contractors, vendors, clients etc in several development projects and maintenance jobs.
The projects in which the NHA didn’t deduct tax on services included 10 contracts (build, operate and transfer- BOT basis) of Lahore-Islamabad Motorway (Service areas-10 Nos), Pindi Bhattian-Faisalabad Motorway, Faisalabad-Gojra, Faisalabad-Khanewal section, Khanewal-Multan, Shaheed Benzair Bhutto over-river bridge (Nishtar Ghat), Gillani Road (Multan), NH&MP building works, Toll plazas, periodic maintenance, Sultan Bahoo Bridge, Shorkot and Garh Maharaja road etc.
“Whereas the NHA general manager (Punjab-North) is a prescribed withholding agent of the PRA within the meaning of the sub rule (f) of rule (2) of the Punjab Sales Tax on services (withholding) rules-2015 in field applying the same obligation for deduction/withholding of PST (Punjab sales tax) and whereas, the GM (NHA) have been receiving the taxable services from various contractors. But you have neither withheld/deducted the PST nor made payment of the due sales tax to Punjab government as prescribed under the rules ibid read with section 14 and 19 of the PST on services Act-2012,” reads one of the two notices issued to NHA.
It says the tax amounts calculated for the period (2013 to 2017) and imposed by the PRA would be recovered from the NHA under section 70 of the act.
Published in Dawn, January 26th, 2018
