PESHAWAR, May 31: The NWFP government has moved the Inter-Provincial Coordination Committee (IPCC) for the settlement of an ongoing dispute over the collection of professional tax in the jurisdiction of cantonments.

A senior official at the NWFP excise and taxation department (E&TD) told Dawn that a summary relating to the province’s stand on the collection of professional tax had been forwarded to the IPCC for resolving the issue.

Besides taking up the matter with the committee, the provincial government was also considering moving the court for resolving the long-standing issue between the province and cantonment boards, the official said.

Article 163 of the Constitution authorises the province to collect professional tax from areas falling in the jurisdiction of a cantonment area.

But an SRO of the ministry of defence issued on October 12, 2004 empowered cantonment boards to collect professional tax from areas falling in its ambit under section 60 of the Cantonments Act, 1924 (II of 1924), the official said.

“The IPCC is the relevant forum for settling inter-provincial or ministerial disputes and it is expected that the issue will be taken up with the ministry of defence soon,” he added.

Cantonment boards in the province are currently collecting professional tax from traders and shopkeepers doing business in cantonment areas, but simultaneously the excise and taxation department is also demanding the same tax from the traders.

Although the traders paying professional tax to the cantonment authorities are reluctant to respond to E&TD notices, the department is not ready to withdraw from its constitutional obligation.

The department’s overall recovery under the head of professional tax has been badly affected because of the ongoing standoff as most of the business centres are located within the jurisdiction of cantonment areas.

An official at the finance department said the NWFP government had reduced the recovery target of the excise and taxation department from Rs1.40 billion to Rs1.32 billion for the current financial year because of its failure to collect professional tax from the cantonment areas.