KARACHI, Aug 1: Taking command of the power utility through cell phones the Abraj executives, with the consent of Aljamoiah, have levied 1 per cent General Sales Tax (GST) and 10 per cent withholding tax on consumers of the Karachi Electric Supply Company on behalf of the government, sources said on Friday.

The withholding tax is collected from industrial consumers, whose power consumption exceeds worth Rs20,000. The KESC operators have included this in the bills of June.

Commenting on the new development, former president Karachi Chamber of Commerce and Industry Haroon Farooqui maintained that levying 10 per cent tax would cause further closure of small and medium size business.

“In fact, withholding tax is a trick to gather revenue in advance from businessmen but at the end of the fiscal year, the government would have to refund excess amount in case the total amount of income is proportionately less than the deducted amount of withholding tax, he said.

The government had declared 5 main industries as zero-rated industries and has exempted textile, leather, carpet, sports and surgical goods. The Site Association of Industry has taken up the matter with the Federal Board of Revenue. Industry and business sources termed it a “total chaos” and nobody knows who was calling the shots.

Shehri-CBE former chairman Khatib Ahmed said that the GST and withholding tax was supposed to be levied from July 1, but the KESC has collected these two taxes from June. It is a cognizable offence and the government should discuss the issue in parliament.

The government should clarify that the revenue thus generated would be spent on the people of Pakistan. It is not a simple matter. The KESC has collected millions of rupees “illegally” by adding these taxes in electricity bills of June.

If the government feels that this issue could not be discussed in parliament, nor people be informed through media, then the Supreme Court of Pakistan should take suo motu notice and take the responsible to task, demanded Ahmed.

The National Electric and Power Regulatory Authority (Nepra) has accepted that the KESC has been awarded monopoly. This authority allows KESC to increase tariff but it does not take notice of dozens of critical violations, which the KESC has made from the very first day of its privatisation, he maintained.

All Pakistan Organisation of Small Traders and Cottage Industries general secretary Mahmood Hamid was of the view that the increase in gas and electricity tariffs, levying of 10 per cent withholding tax and 1 per cent increase in GST is tantamount to crush small and medium enterprises.

These measures would cause shutdown of local trading and thousands of people would face unemployment. .

The KESC Employees Union general secretary Latif Mughal said that the KESC was presently running without a managing director after Gen (retd) Amjad Hussein departed last week and the UAE-based company Abraj purchased 73 per cent right shares from Aljamoiah Group.