KARACHI, July 16: The Sindh government is likely to be asked to take a petition before the National Finance Commission, to be constituted in next few days, for recovery of over Rs33 billion losses it suffered since 1999-2000 to 2007-08 because of deviation from the approved principles of distribution of resources collection from 2.5 per cent or one sixth of 15 per cent general sales tax.

As reports of formation of a new NFC are appearing in the media, political parties, professional groups and academics in Sindh are preparing to draw up a convincing case for distribution of resources between federation and the provinces and among the four provinces on a just and equitable formula.

As a part of this exercise, quite a few concerned citizens in Karachi, Hyderabad and other parts have prepared a document to establish how Sindh was robbed of its legitimate share in the compensation system stipulated by the Inter-Provincial Coordination Committee (IPCC) meeting that abolished the Octroi and Zila tax in May 1999.

The IPCC decided to increase general sales tax rate from 12.5 per cent to 15 per cent. The 2.5 per cent increase or one-sixth of GST collection was to be given to provinces in place of octroi and zila tax.

The provinces were asked to give authenticated audit accounts of octroi and zila tax collection in their respective jurisdiction so that collection of 2.5 per cent or one-sixth of 15 per cent sales tax be distributed among them in that ratio.

On receiving these funds, the provincial governments are expected to pass on the funds to district governments in ratio of octroi and zila tax being collected in their respective jurisdiction.

As an interim arrangement, the government decided to give Rs10 billion to Punjab, Rs8 billion to Sindh, Rs760 million to NWFP and Rs710 million to Balochistan. The were asked provinces to give authenticated audit figures of octroi and zila tax collection in 1998-99 so that it would serve as a reference document for working out distribution ratios.

But what happened in actual practice from 2000-01 to 2005-06 was that the federal government retained 5 per cent of collection of 2.5 per cent sales tax as its charges. Of the balance amount