ISLAMABAD: Federal Board of Revenue (FBR) and Power Division are giving final shape to mechanism for recovery of sales tax from chronic defaulters of electricity, well informed sources told Business Recorder.
According to FBR, Power Division has requested FBR’s assistance in recovery of amount due from permanent defaulters of electricity consumers to the extent of sales tax after passing recovery obligation to FBR.
As per discussions and examination of documents, Nepra Consumer Service Manual and Wapda Commercial Procedures deals with operational procedures inter alia recovery of electricity dues from defaulting consumers, draft Special Procedure for Collection and Payment of Sales Tax (Electric Power Supply by Discos) Rules 2023.
Power Division has been requested to examine and provide input/ comments as per Rule 8 of Rules of Business, 1973.
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Recently, Secretary Revenue Division held a meeting with Secretary Power Division and discussed different options to sort out this issue. Subsequently, senior officials of Power Division and FBR also held meetings and exchanged viewpoints to resolve the matter. During the discussions it was pointed out that the Power Division will examine the following to enable FBR to improve co-ordination in recovery:
(i) Enabling Provisions- there is apparently no enabling provision in the law/ rules of Discos that provide transfer of defaulted arrears of sales tax to FBR for recovery. Prospects of bringing in enabling provisions in the relevant law/ rules may be shared with FBR.
(ii) Refinement in billing mechanism- there are a large number of connections that are not in the name of the actual consumers.
There is possibility of creating at least an additional row in the utility bills to indicate the name of the user with CNIC and contact number. This will provide a better visual of the users who may be tenants, etc., actually using electricity connection, though the meter/ bill is in a different name. Corresponding legal amendments in relevant rules will be required to be made.
(iii) Best Practices- Possibility of developing a NADRA facilitated biometric system for change in particulars of tenants through mobile app whereby the owner of the building/ connection may easily include the details of the actual user of the electricity connection as and when the user/ tenant is changed.
(iv) Improvement and Standardization of procedures/ Documents - As per recovery mechanism presently in vogue, removal of energy meter is followed by a lag of six months where after criminal proceedings (lodging of FIR) and recovery memo is sent to Tehsildar. This means effective measures to recover defaulted amount are initiated almost after a year of default. The time lags need to be examined. A certificate as agreed would be required to be issued by Discos to the effect that proposed actions have been taken.
FBR argues that Tehsildars are not responsible to Discos and there is hardly a case where immovable property is attached for recovery of utility dues. Power Division may examine the prospects of appointment of a recovery officer under Tehsildar answerable to Discos for effective recovery and also prescribe a memo/ proforma/notice of reporting recovery action by such officers.
Copyright Business Recorder, 2023