LAHORE, Dec 18: Punjab’s dispute with the federal government over substantial “reduction” in its share from the provincial general sales tax (GST) on services collected during the last fiscal year remains unresolved.

Punjab finance department officials told Dawn on Tuesday that the federal government had disbursed Rs15 billion to the province from the provincial GST on services collected from the telecom companies in 2011/12, down from Rs24 billion the previous year. “On the other hand the provincial GST on services collected from telecom companies in Islamabad was shown to have suddenly increased to a hefty Rs9 billion – 60 per cent of the funds transferred to Punjab,” a senior finance department official said.

“How could Islamabad generate so much revenue compared to the entire Punjab, which is 60 per cent of the country?” he asked.

He said the provincial government had written to the finance division for resolving the issue. The finance division referred the matter to the Federal Board of Revenue (FBR) to “look into the matter”. “Since the FBR has not done anything so far to resolve the issue, we have written again to the federal finance secretary for a meeting with the provincial chief secretary and finance secretary to discuss the matter,” he said.

He was hopeful that the meeting would be held over the next couple of days and the issue resolved.

The provincial government has already set up the Punjab Revenue Authority (PRA) for collecting provincial GST on services from the current financial year. The PRA has already collected Rs12 billion in the first four months of the current financial year to October and is expecting to increase the collection to Rs40 billion by the end of the year in June.

The province had received a total of Rs22 billion from its share in the provincial GST on services in the last fiscal year.