ISLAMABAD, June 16: The 15 per cent General Sales Tax collection from domestic electricity consumers, except those with below 50 units consumption, would start from December, a finance ministry official told Dawn.
He said allocations under the current expenditure for GST subsidy to the Water and Power Development Authority and Karachi Electric Supply Corporation for 2002-03 had been reduced by around 55 per cent compared with projections for 2001-02. Life line consumers of 50 units per month would be the only exemption from the GST.
He said that because of financial difficulties of the utilities and their tariff increase petitions about to be taken for hearing by National Electric Power Regulatory Authority, it was decided to defer the GST collection till December to avoid impact of tariff increase and GST at once.
An amount of Rs8.2 billion was earmarked in the 2001-02 budget as GST compensation to Wapda but revised estimates suggest the amount increased to Rs9.5bn by end of the year. For 2002-03, Rs4.3bn have been allocated as GST subsidy to Wapda.
Similarly, GST allocation to KESC in the 2001-02 budget was put at Rs1.436bn but it was revised to Rs1.143bn. The federal budget has projected this head coming down by over 40 per cent to Rs858 million.
When the finance minister was asked at the post-budget news conference whether or not the GST on electricity would be collected from domestic consumers in the next year, he did not give a clear answer.
He said, however, that currently the GST was represented in the electricity bills but readjusted without any impact to consumers because the federal government returned the money to the utilities.
He said that it was pointed out to him earlier as well that withholding tax, income tax and the GST were being collected through electricity bills but there was no such thing.
Of the subsidies of Rs20.8bn for the year 2002-03, Rs1.035bn would be paid to Wapda on behalf of Azad Kashmir as tariff differential because of higher rates in AJK, Rs727m for Balochistan tubewells, Rs1bn for Punjab wheat export and Rs1bn one-time subsidy to FFC-Jordan to withdraw guaranteed rate of return, besides other subsidies.
Petroleum Secretary Abdullah Yousaf explained in reply to another question that there would be no increase in petroleum development levy (PDL) being collected on petroleum products but did not explain how it would increase to Rs45bn in 2002-03 against budget estimates of Rs32bn in 2001-02.