KARACHI: Despite a protest by the opposition, the Sindh Assembly on Wednesday passed the Sindh Sales Tax on Services (Amendment) Bill, 2018, empowering the government to levy and collect sales tax beginning on July 1, 2015 on movable or immovable property and services by way of lease, rent, licence or other similar arrangements.
Before the adoption of the bill, the amendments suggested by Muttahida Qaumi Movement parliamentary leader Syed Sardar Ahmad during clause-by-clause reading of the bill were put to the house by the chair, which were rejected.
According to the statement of objectives and reasons, it is expedient to amend the Sindh Sales Tax on Services Act 2011 with a view to safeguarding the revenue to government and avoid any litigation.
Earlier Syed Sardar Ahmad opposed the amendment saying that imposing sales tax on services and renting immoveable property either be withdrawn or the bill be referred to the standing committee or a special committee.
‘How much does the PPP government want to squeeze Karachiites?’
The MQM leader quoted the ruling of the high court against imposition of sales tax on immovable property saying it was not a commercial activity and further suggested that the tax should not be levied on the owner of the property but on the person taking the property on rent or lease.
During the discussion on general principles, Syed Sardar Ahmad read out his proposed amendment to the bill. He said the law was discriminatory in nature as it would be applicable to urban property while in rural areas agricultural land was not covered in the bill. As such it was against Article 25 of the Constitution and would be struck down by court.
He said that 90 per cent sales tax was being collected from urban areas, particularly Karachi, Hyderabad and Sukkur, and 85pc of the total revenue was collected from these urban areas while under the GST on services act, agriculture and fisheries land’s renting was not taxable. If the government was keen to levy sales tax on services, the law be made applicable to renting lands in rural areas as well.
MQM lawmakers Muhammad Hussain and PTI defector to the PSP Hafeezuddin opposing the bill said that it would widen the gulf between the urban and rural populations in the province and termed it a law discriminatory against the urban population. Mr Hussain said that already five types of sales tax were levied on the urban areas and their share in Rs100 billion was 95pc, and by imposing further tax they were being further burdened. He said that if it was inevitable, it should also be levied on rural properties.
Hafeezuddin said that under the law if any high court had given verdict on any matter, it was applicable to every province. As such if anyone went to court, such litigation would be struck down. He said last year Rs61bn was generated from sales tax on services and this year’s target was Rs90bn. “How much does the PPP government want to squeeze Karachiites?” he remarked.
Senior Minister Khuhro responding to the opposition’s arguments said that the tax on rented urban property would be only 3pc while hostels, boarding houses would be exempted from it. He also said that sales tax on services would not be charged from the owner but from the tenant. He also said that the bill was not for Karachi or any particular urban area, but would be collectable on immovable property across the province.
The minister also objected to the contention of opposition lawmakers Muhammad Hussain and Hafeezuddin about generation of 90pc tax from Karachi, saying that Karachi was part of Sindh and the deprived people of Sindh had every right on Karachi, which is capital of the province.
After the adoption of the bill of sales tax on services, the speaker called it a day at 2.30pm to reassemble on Thursday at 10am.
Partnership (amendment) bill deferred
The other bill on the agenda was The Sindh Public Private Partnership (Amendment) Bill, 2018, whose consideration was deferred till Thursday on the suggestion of Syed Sardar Ahmad soon after its introduction in the house by Mr Khuhro.
The house also witnessed a protest walkout by PTI lawmakers Samar Ali Khan and Khurram Sher Zaman when the latter was not allowed to speak on the admissibility of his adjournment motion after it was opposed by Mr Khuhro.
Before the walkout, there was an exchange of harsh words between the deputy speaker, who was in the chair at the time, and Mr Sher Zaman.
MQM backs PTI lawmaker
Muhammad Hussain of the MQM backed Mr Sher Zaman, asking the chair to allow the PTI MPA to speak on the admissibility of his motion.
Khurram Sher Zaman through his adjournment motion wanted to discuss on the floor of the house the re-appointment of Dr Asim Hussain as chairman of the Sindh Higher Education Commission, terming it a recent matter of public importance. As he was not allowed to speak on its admissibility by the chair, Mr Sher Zaman and his colleague Samar Ali Khan staged a walkout in protest and did not return to participate in the rest of the proceedings of the day.
Earlier on a calling-attention notice, Nusrat Sahar Abbasi of the Pakistan Muslim League-Functional said the deployment of over 6,000 police officials on VIP protocol duties cost Rs2bn annually. She gave figures referring to names of VIPs but her mike was turned off by the chair. However, responding to the notice, Home Minister Sohail Anwar Siyal said the legislator had quoted the figures from a TV channel report and a clarification was being sought from the channel.
In response to the calling-attention notice of Syed Ameer Hyder Shah about the increasing sale of raw liquor in Mirpur Sakro, Thatta district, under police patronage, the home minister gave the figures of the seized drugs, including raw liquor, hashish and other drugs. He said if narcotics were being sold under some police official’s patronage, he should be named so that action could be taken.
In reply to the notice of MQM defector MPA Syed Nadeem Razi of the PSP about the collapse of a building in the old city area and providing alternative accommodation to the residents living in dilapidated old buildings, Local Government Minister Jam Khan Shoro said that residents of such buildings were not prepared to vacate them though they were declared heritage. “We are ready to constitute a committee in which Nadeem Razi would also be included to persuade the residents to vacate such buildings.”
Responding to the notice of Irtiza Khalil Farooqui about piles of garbage in Gulistan-i-Jauhar and overflow of sewage, minister Shoro said the MPA himself had pointed out that the locality was part of the cantonment area.
There are a number of cantonments in the city which collected garbage from their respective localities. If the responsibility of collecting garbage was given to the Sindh Solid Waste Management Board, the government was prepared to discharge it. He also agreed with the MPA for the need to evolve some mechanism under an umbrella to discharge this responsibility collectively.
Published in Dawn, March 1st, 2018