ISLAMABAD, July 3: The government has asked Wapda and KESC to pay sales tax on the basis of supply of electric power billed to the consumers from July 1 this year instead of the earlier recovery basis system.

A CBR official told Dawn on Monday that the decision was taken to bring Wapda on a par with KESC, as the later was demanding an equal treatment in case of tax payment.

Following the privatisation of KESC, the government in December 2005 had withdrawn the facility of payment of sales tax from KESC on the basis of recovery from the consumers and only allowed it to Wapda.

To provide further facilities to the KESC management, the government also gave the retrospective effect of the payment of sales tax on recovery basis to KESC to be effective from December 14, 2005.

Prime Minister Shaukat Aziz in a cabinet meeting before the budget had decided that both the power distribution companies should be awarded equal treatment in terms of payment of sales tax.

The CBR notified the decision through a sales tax notification SRO681 of 2006 by amending the Sales Tax Special Procedures Rules, 2005. The amendments shall be deemed to have been so made on December 14, 2005, added the notification.