Mangla power station: Wapda proposes depositing ST with AJ&K

ISLAMABAD: The Water and Power Development Authority (Wapda) has proposed signing of a formal agreement between the stakeholders to deposit sales tax amount pertaining to Mangla Power Station to Azad Jammu and Kashmir (AJ&K) exchequer, well informed sources told Business Recorder.

Recently, a notification was issued regarding formation of Technical Committee in pursuance of the decision of Combined Sub-Committee held on January 30, 2024 to deliberate and finalise their recommendations on/ before January 31, 2024 for placing before the Inter-Ministerial Committee meeting.

Wapda argues that apropos to the Technical Committee meeting held on January 31, 2024, the office of General Manager Finance (Power) received the minutes of meeting of the Technical Committee held on February 01, 2024 through Wapda representative who was nominated to attend the Inter-Ministerial Committee meeting.

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The recommendations communicated through the minutes of meeting are as follows: (i) WAPDA will start filing monthly sales returns with AJ&K Inland Revenue Department with effect from January, 2024, and deposit due sales tax amount pertaining to Mangla Power Station to AJK exchequer; (iii) Wapda will issue supply invoices to CPPA-G declaring bifurcated figures of value of supplies and sales tax amount in respect of AJK and Pakistan and there will be no need of issuing separate tax invoices; and (iii) the modalities regarding payment of Sales Tax in AJ&K will be agreed between Wapda authorities and AJK Inland Revenue Department within a week.

Wapda maintains that some procedures need to be followed before this can be implemented as some issues have to be considered properly before putting the mechanism in place.

According to Wapda, during discussion, no cut-off/ effective date had been agreed. The given time line of January, 2024 for filling Sales Tax Return and deposit due sales tax amount pertaining to Mangla Power Station to AJK exchequer is not possible practically without taking on board the other stakeholders.

Wapda further conveyed to FBR that it will issue supply invoices to CPPA-G declaring bifurcated figures of value of supplies and sales tax amount in respect of AJK and Pakistan and there will be no need of issuing separate tax invoices. However the input of CPPA- G is required.

General Manager Finance (Power) Wapda Syed Irfan Hussain Rizvi argued that the modalities regarding ’payment of Sales Tax in AJK without legal sanctions among stakeholders, Wapda authorities, FBR and AJK Inland Revenue Department and CPPA-G and the timeline thereof need to be linked with the Agreement among the stakeholders.

Copyright Business Recorder, 2024