Net metering electricity bills: FTO directs FBR to ensure uniform tax treatment

ISLAMABAD: The Federal Tax Ombudsman (FTO), M Zafar Hijazi has directed the Federal Board of Revenue (FBR) to ensure a uniform tax treatment in net metering electricity bills received by consumers across the country.

The FTO has disposed of a complaint concerning the charging of sales tax and withholding tax on net metering electricity bills. The complainant alleged that K-Electric was charging taxes on the gross billed amount, whereas other DISCOs in different parts of the country were reportedly applying a different treatment, giving rise to grievances and perceptions of unequal application.

The matter was reheard pursuant to remand by the President of Pakistan, and all concerned stakeholders, including FBR, K-Electric and DISCOs, were afforded opportunity of hearing.

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The FTO observed that the present proceedings do not warrant determination of tax liability or interference with NEPRA’s regulatory framework. Rather, the issue reflects divergent implementation practices across jurisdictions, creating uncertainty and recurring grievances among similarly placed consumers.

Accordingly, the FTO directed that the FBR should take up the matter at the appropriate policy and administrative level, in consultation with relevant stakeholders, and ensure that any clarification or instructions issued by the Board are uniformly communicated and implemented by all concerned field formations so that inconsistent practices do not persist across the country.

The FTO reiterated that the Office is not adjudicating upon tariff or regulatory policy matters, but is referring the issue for uniform administrative resolution in the larger interest of consistency and fairness.

Copyright Business Recorder, 2026