Rs 18.494 billion reconciled: no amount of WHT due to be recovered from IPPs: FBR

The reconciliation of Rs 18.494 billion paid by the Independent Power Producers (IPPs) to the Federal Board of Revenue (FBR) revealed that no amount of withholding tax is due to be recovered from IPPs. This has been disclosed in a report submitted by Federal Board of Revenue (FBR) to the Senate Standing Committee on Finance regarding reconciliation of payment of Rs 18.494 billion by the Independent Power Producers (IPPs).
The Committee in its recommendations on 15-05-2017 directed FBR to recover amount from the IPPs as the reimbursement of withholding tax of Rs 264.655 million to IPPs.
The FBR has stated that the amount has already been deposited to the FBR by the IPPs at the time of withholding from the shareholders, hence no amount of withholding tax is due to be recovered from IPPs on this account.
The meeting was further stated that as per data provided by CPPA, the amount paid to IPPs included sales tax of Rs 20,183,704,675/-. The scrutiny of sales tax returns of these IPPs has been carried out for the relevant period and out of the stated amount;(a) an amount of Rs 17,461 ,638,117/-matches with the amount of output tax declared by the IPPs;(b) for an amount of Rs 2,721,865,383/-, the amount declared as output tax by the IPPs is Rs 4,627,766,774/- which is even higher than the amount shown;(c) an amount of Rs Rs 201,175/- to be declared as output tax by two of the IPPs, failed to declared the same. The mater is also being examined/investigated by the FBR.
In the special audit report of the Auditor General of Pakistan, it is revealed that IPPs as withholding agent have deducted Rs 264.655 million withholding tax on payment of dividend to its shareholders in terms of section 150 of the Income Tax Ordinance, 2001 and deposited the same to the FBR. Subsequently, the same was reimbursed to them in the form of pass through Item which is held as irregular. Now the sub-committee has directed the FBR to recover the said amount from IPPs.
The FBR stated that the amount has already been deposited to it by the IPPs at the time of withholding from the share holders; therefore, no amount of withholding tax is due on the part of IPPs to be recovered. However, the same was reimbursed to the IPPs by the CPPA which was held not admissible. Ministry of Water & Power may be directed to recover the same from the respective IPPs.