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ISLAMABAD: The government of Punjab has urged federal government to instruct Punjab-based power Distribution Companies (Discos) to do away with habitual illegitimate practice of adjustment of Electricity Duty against outstanding payables of provincial government connections and GST subsidy on private agriculture tube-wells.

Punjab government raised the issue through a letter with the Ministry of Energy (Power Division), which is the administrative Division of power Distribution Companies.

Energy Department of Punjab government, in its letter has demanded that the Discos of Punjab be directed to transfer pending Electricity Duty collected from the electricity consumers of the Punjab into Punjab Government Treasury as per provision of Punjab Electricity Duty Rules, 2012. Further, Discos may also be instructed to dispense with the practice of adjustments of Electricity Duty against the outstanding dues of Punjab Government electricity connections & GST subsidy of private agriculture tube well consumers of Punjab forthwith.

Article 157(2)(b) of the Constitution of Pakistan and Section-13 of Punjab Finance Act, 1964 empowers the Punjab Government to levy tax on the electricity consumer of Punjab. The levy is recoverable from private generators and consumers of licencees (Discos) under Rule 8 of the Punjab Electricity Duty Rules, 2012. Each Disco collects Electricity Duty from its consumers, and is liable to pay it in Government Treasury within 60 days of the month for which Electricity Duty is levied and if the licencee neglects or fails to deposit the amount of Electricity Duty in Government Treasury within the specific period, it is liable to pay late payment penalty imposed by the Electric Inspectors under Rule 8(3) of the Rules.

According to the Government of Punjab, instead of transferring Electricity Duty in the relevant accounts of treasuries of Punjab, the Discos of Punjab are persistently retaining the amount of Electricity Duty so collected from the consumers of Punjab in their accounts and adjust it unilaterally either against the outstanding dues of Punjab Government connections or GST subsidy of private agriculture tube well consumers of Punjab which is unconstitutional. The individual adjustments of Electricity Duty by the Discos against other receivables by the federal government compel the Provincial Audit Works department to point perpetual irregularities in the provincial receipts and disrupt the estimates of revenue collection by Punjab.

At present, Government of the Punjab claims an amount of Rs44.567 billion payable by Discos/PEPCO to Government of Punjab on account of Electricity Duty for the period from May 2016 to August 2021.

Punjab Government has requested that necessary directions be passed to the Discos of Punjab for transfer of long pending Electricity Duty collected from the electricity consumers of Punjab into Punjab Government Treasury as per provision of Punjab Electricity Duty Rules, 2012. Further, Discos should be instructed to dispense with the habitual illegitimate practice of adjustments of Electricity Duty against the outstanding dues of Punjab Government electricity connections and GST subsidy of private agriculture tube wells consumers of Punjab forthwith.

Copyright Business Recorder, 2022

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