Business

Centre, provinces reach consensus to harmonise GST on goods, services

Published

5 months ago

Farwa

Consensus pave way for $450 to $500mn loan from World Bank.
Decision will allow businesses to file one return of GST every month.
NTC appreciates stakeholders for building consensus.

ISLAMABAD: The federal government and the four provinces reached a consensus on the harmonisation of the general sales tax (GST) on goods and services, paving a way for the approval of a $450 to $500 million loan from the World Bank, The News reported Tuesday.

Finance Minister Ishaq Dar on Monday chaired the meeting of the National Tax Council (NTC) which showed appreciation towards the stakeholders for building a consensus and settlement of the decision on the harmonisation of GST for ease of doing business.

This decision will allow businesses to file one return of GST every month instead of filing five returns as one portal for filing GST returns would be placed.

According to the official announcement, the Federal Board of Revenue (FBR) chairman and provincial stakeholders evolved a consensus to proceed ahead in the spirit of greater national interest for harmonisation of GST under the umbrella of the NTC.

In the past, a consensus was agreed but no change in subsequent laws was made; that’s why it resurfaced again. However, official quarters argued that there was a major difference this time as Sindh and all other provinces agreed in the noted official minutes of the NTC meeting that everyone agreed on the consensus of harmonisation of GST on goods and services.

“If there is a requirement, then the subsequent laws will also be changed,” said a top close aide to the minister for finance, adding that the Centre and provinces had struck a consensus with the strategy of “give and take” for achieving a compromised agreement on a definition of goods and services in order to differentiate between the jurisdiction of federal and provincial governments.

Under the 1973 Constitutional arrangement, goods are the jurisdiction of the federal government and services fall under the domain of the provinces. The centre and provinces struck an agreement to resolve lingering disputes on the jurisdiction of taxation on toll manufacturing which was with the federal government, the right to collect GST on transportation rests with provinces, and taxation on construction will be shared by the centre and provinces as per constitutional arrangements and the right of GST collection on restaurants would be the domain of the provinces.

On the right to GST collection from restaurants, a heated debate occurred among the FBR and provincial authorities and finally, NTC decided to accept the right of provinces to continue the collection of GST as the right of the provinces.

A close aide to Dar said that he had convinced both sides to a consensus that the right of collection should be accepted in favour of those who could collect effectively and efficiently because ultimately it was aimed at enhancing the size of the pie.

He also reminded the provinces that around 60% collection of the FBR was returned to the provinces through a share of the NFC Award so the spirit of distribution of jurisdiction should be aimed at ensuring increased revenue collection. When asked about the proposal for handing over the right of collection of Agriculture Income Tax (AIT) to the FBR, he said that the FBR footprint was quite limited and its officers could not go into far-flung villages so he had asked the provinces to bring the rate of AIT in line with the FBR’s rate of tax on taxable income brackets. “Instead of taking big steps, we can move forward by making small moves,” he added.

The official statement stated that Punjab Finance Minister Mohsin Leghari, State Minister for Finance and Revenue Dr Aisha Ghous Pasha, Special Assistant to Prime Minister on Finance Tariq Bajwa, SAPM on Revenue Tariq Mehmood Pasha, secretary of finance, chairman FBR, provincial finance secretaries and other senior officers of Finance Division attended the meeting.

The meeting reviewed the progress on the decisions of the last meetings of the NTC on the harmonisation of GST across the country. The finance minister said that in order to have ease of doing business, harmonisation of GST was important. Further, GST harmonisation will be a major step towards the completion of policy actions under the World Bank’s RISE programme.

The participants shared their opinions on the harmonisation of GST. Pakistan is eyeing to secure World Bank’s program loan titled Resilient Institutions for Sustainable Economy (RISE)-II to strengthen the fiscal framework, and promote growth and transparency.

The proposed operation for a loan of $450 to $500 million focuses on improving fiscal management and fostering growth and competitiveness.

Business

Petrol, diesel prices likely to go down from April 1

Published

5 hours ago

Farwa

Petrol rate likely to reduce by Rs4-5 per litre.
Rs15-20 per litre reduction expected in diesel price.
Sources hint at possibility of prices remaining unchanged.

Following a reduction in international crude oil prices, the rates of petroleum products in Pakistan are expected to decline from April 1, Geo News reported Wednesday.

According to estimates of oil marketing companies (OMCs), the price of diesel is likely to decline by Rs15-20 per litre while the price of petrol is expected to go down by Rs4-5 per litre.

However, well-placed sources in the industry said that there is a possibility that the Finance Division keeps the price unchanged.

In its last fortnight bulletin, the federal government raised the price of petrol to Rs272 per litre.

The Finance Division attributed the price hike to the depreciation of the Pakistani rupee against the US dollar and an increase in the prices registered by Platts Singapore.

The price of MS (petrol) was increased by Rs5 per litre and the price of hi-speed diesel was increased by Rs13 per litre.

The increase in the price of kerosene oil was kept at Rs2.56 by reducing the government’s dues on it. Similarly, the price of light diesel oil was kept constant by adjusting the government dues as well.

The new prices came into effect on March 16 and will remain in place till March 31.

The Finance Division will announce the news rates on March 31 which will remain in place for the next 15 days.

Business

Banks to observe extended working hours

Published

6 hours ago

Farwa

At the request of the Federal Board of Revenue, the State Bank of Pakistan (SBP) on Wednesday directed all branches of banks to observe extended banking hours in order to facilitate the taxpayers in payment of government duties/taxes.

The central bank, in a statement issued in this regard, said that the direction is for all branches of banks including the National Bank of Pakistan (NBP) and field offices of SBP Banking Services Corporation (SBP-BSC).

“[…] all branches of banks including National Bank of Pakistan (NBP) and field offices of SBP Banking Services Corporation (SBP-BSC) shall observe extended banking hours until 04:00 P.M. and 06:00 P.M. on 30th and 31st March 2023 respectively for collection of government taxes through ADC’s Over-the-Counter (OTC) facility,” the statement read.

To facilitate collection of Govt. duties/taxes, all branches of banks including NBP and SBP BSC field offices will observe extended banking hours till 4pm & 6pm on 30th & 31st March, 2023 respectively.
See PR: https://t.co/6rzm7F7ZqP pic.twitter.com/zEbHqfAfXN
— SBP (@StateBank_Pak) March 29, 2023

It mentioned that National Institutional Facilitation Technologies (NIFT) shall arrange a special clearing at 6pm on March 31 (Friday) for the same-day clearing of payment instruments deposited at NBP’s authorised branches for customs collections.

“For this purpose, all banks shall arrange to keep their clearing-related branches open till such time that is necessary to facilitate the special clearing by NIFT on March 31, 2023 (Friday),” it read.

It should be noted that during Ramadan, banks observe reduced hours. Currently, the timings are:

Public dealing timings:

Monday to Thursday — 9am to 2pm (without break)
Friday — 8:30am to 1pm (without break)

Office timings:

Monday to Thursday — 9am to 3:30pm (with prayer break from 2pm to 2:30pm)
Friday — 8:30am to 1pm (without break)

Business

PM Shehbaz takes notice of gas loadshedding during sehr, iftar

Published

6 hours ago

Farwa

PM Shehbaz says he has already taken notice of the matter.
Premier summons a meeting to discuss issue of gas loadshedding.
“We will leave no stone unturned to address this issue,” PM says.

ISLAMABAD: Prime Minister Shehbaz Sharif on Wednesday assured the members of the National Assembly that his government would address the issue of gas loadshedding during sehr and iftar as inflation-weary people have been registering complaints.

The prime minister, responding to a point of order raised by MNA Syed Agha Rafiullah, told the house that he had already taken notice of the matter.

PM Shehbaz shared that he had already summoned a meeting to be held later in the day, to discuss the issue of gas loadshedding.

“We will leave no stone unturned to address this issue,” the prime minister assured the house.

Earlier, a parliamentarian from Karachi’s Malir area drew the house’s attention to the problem of gas loadshedding being faced by the people, particularly those of Karachi, during sehr and iftar.

He said though the prime minister had already taken notice of the situation, the Sui Southern Gas Company (SSGC) needed to be directed to resolve the issue and provide uninterrupted supply during sehr and iftar.

Last week, the SSGC said gas would be supplied to domestic consumers during the holy month of Ramadan, but for limited hours — a move that irked consumers who complained of not getting enough of this essential fuel during mealtimes.

The utility had said that the gas pressure would be low from 8am to 2:30pm as it was facing a shortfall of 250 million mmbtu.

According to the SSGC helpline, for iftar, gas will be supplied to consumers in Karachi from 2:30pm to 7pm, while for sehr it will be available from 2:30am to 5am.

The gas utility added that consumers would face complete suspension or low pressure during the rest of the hours.

However, the people have been complaining that gas remained suspended during sehr and iftar which forced them to purchase meals from hotels and restaurants which burdened their pockets.