QUETTA, Oct 12 It is highly likely that the next National Finance Commission (NFC) award would be determined under a broad-based criteria for distribution of resources, including provinces' backwardness and their ability to generate funds.

This was stated by federal Finance Minister Shaukat Tarin and Punjab Finance Minister Tanveer Ashraf Kaira at a press briefing after the NFC meeting on Monday.

Balochistan's demand in this regard would be considered, an upbeat federal finance minister said.

He said he was hopeful the NFC meeting would reach a consensus decision on general sales tax (GST) on services and gas development surcharge.

Mr Tarin said “There will be good news on Tuesday regarding these issues.”

According to him, all stakeholders were showing “very positive gestures” and patiently hearing out each other's stances on various issues.

“I believe that the atmosphere in the NFC (meeting) is very positive ... Everybody is very helpful and participatory.”

He said he was confident that the meeting would devise a consensus formula on both horizontal and vertical distribution of resources between the provinces and the centre, adding that it would be a milestone for future governments.

Mr Tarin said that considerable progress had been made regarding GST on services.

The meeting is also likely to discuss distribution of resources under the divisible pool during its Tuesday session.

The federal finance minister said that an update regarding Balochistan's demand about gas development surcharge would be given on Tuesday.

It was learnt that the delegates had decided to transfer GST on services to the provinces.

“The tax is the constitutional right of the provinces,” sources quoted independent constitutional expert Makhdoom Ali Khan as saying during a briefing about constitutional matters.

Referring to GST on services, Punjab Finance Minister Tanvir Ashraf Kaira said that the meeting had heard points of view of the Sindh government, the Federal Board of Revenue and the opinion of Makhdoom Ali Khan.

He said that the provinces and the centre had agreed in principle to transfer GST on services to provinces, adding that the centre had earned about Rs60 billion under this head this year and the amount would be equitably distributed among the provinces.

However, he said, the FBR would continue to collect sales tax on services on behalf of the provinces, adding that the federal government would deduct a nominal tax collection fee.

About the gas development surcharge issue, Mr Kaira said that “good progress” was expected regarding recommendations of two committees, comprising Ogra, the ministry of petroleum and the finance division. He said that Balochistan's share in money collected as gas surcharge would be increased after an agreement on the formula, adding that Punjab was supporting Balochistan on the issue.

Mr Kaira said Balochistan should be compensated for all injustices and it should be given a greater share in the GDS.

Balochistan is demanding all outstanding dues on account of the gas development surcharge pending against the centre since the early 50s when Sui gas field first started producing gas.

It is learnt that Balochistan was offered an increase of only Rs3 billion in gas surcharge. However, according to sources, Balochistan did not agree and asked for more time for consultations with coalition partners of the PPP-led coalition government.

Sources said that Balochistan's financial managers would work out details of outstanding dues for presentation in the next NFC meeting.

Mr Kaira said that Punjab also supported Balochistan's demand for broadening the criteria for distribution of national resources to include area, backwardness, poverty and scattered population.

Finance ministers of all provinces, technical members and other financial managers attended the meeting.