FAISALABAD, July 31: The Faisalabad Industrial Estate Management and Development Company (FIEMDC), declaring itself a state-owned body, has refused to pay Rs1.6 millions capital value tax (CVT) to the district government. But the Federal Board of Revenue (FBR) says the company is a limited one and liable to pay all taxes, sources told Dawn.

The FIEDMC has acquired hundreds of acres from the government for M-3 Industrial Estate near Chak Jhumra. Sources says the company wants to get the land registered in its name without paying the CVT as its officials say the FIEDMC is a governmental body and is not liable to pay any tax.

The company also involved the Provincial Industries Department in the game, asking it to approach the FBR for exemption from the CVT.

Sources say the industries department wrote a letter to the FBR citing the CBR letter C No 2(1)OT/WT/94 dated Nov 20, 2006, that government departments are not liable to pay the CVT.

It said the FIEDMC was a government-owned company registered under the Companies Act. Therefore, the company may be exempted from the CVT as per provisions of law.

It said the FIEDMC had been entrusted with the task of establishing M-3 Industrial Estate and Value Addition City in the district. The second project has almost been completed and plots of the first project will be sold soon.

Sources said the district government also approached the FBR for clarification of the status of the FIEDMC.

Sources said the CBR declared the FIEDMC a limited company and liable to pay all taxes.

Despite instructions from the FBR, sources said, the FIEDMC was not ready to pay the CVT.

FIEDMC chief operating officer Ahmad Raza Siddiqi told Dawn the FIEDMC had been exempted from the CVT by the Punjab government. About the FBR’s stance over the status of the company, he said: “The company will follow whatever the Punjab government says as we are being funded by the provincial government.”