Sindh govt reduces infrastructure development cess

ISLAMABAD: To end litigation, the Sindh government has reduced the infrastructure development cess from 1.85 percent to between 0.80 percent and 0.85 percent, according to the Sindh Development and Maintenance of Infrastructure Cess (Amendment) Bill, 2026.

Under the new scheme, the Bill has offered the facility of “Settlement Agreement” to the business community. The government may enter into a Settlement Agreement with any owner or person liable to pay Cess under the said Act.

The Sindh Development and Maintenance of Infrastructure Cess Act, 2017 was enacted to generate revenue for the development and maintenance of provincial infrastructure. Over time, however, several owners or persons have accumulated outstanding or disputed liabilities under the Act, resulting in prolonged litigation, uncertainty in revenue collection, and administrative inefficiencies.

In order to avoid further litigation and to resolve pending litigation before the court, it is expedient to address these challenges by introducing a structured mechanism for settlement of liabilities and providing reduced rates of Cess through settlement agreements under law with owners or persons, and to make suitable amendments in the Sindh Development and Maintenance of Infrastructure Cess Act, 2017. The Bill seeks to achieve the said object.

The following Bill is hereby published for general information as required by Rule 98 of Rules of Procedure of the Provincial Assembly of Sindh, 2013.

Whereas it is expedient to further amend the Sindh Preamble Development and Maintenance of Infrastructure Cess Act 2017 in the manner hereinafter appearing;

It is hereby enacted as follows: -

1. (I) This Act may be called the Sindh Development and Maintenance of Infrastructure Cess (Amendment) Act, 2026.

(II) It shall come into force at once.

2. In the Sindh Development and Maintenance of Infrastructure Cess Act, 2017, hereinafter referred to as the said Act, in section 2, after clause (a), the following new clause shall be inserted: -

Any owner or person who has filed any appeal, constitutional petition, suit or proceedings against the levy of cess before any court of law may, within two months from the commencement of this Act, enter into such agreement on the terms specified in this Act.

Provided that the Government may, by notification in the official Gazette, extend the said period for specified owners or persons, subject to such conditions as it may deem fit.

Provided further that such extension shall not exceed six months in aggregate.

Payment of liabilities: Where an owner or person enters into a Settlement Agreement under section 10A, such liabilities shall be payable in instalments as follows: -

(a) fifteen percent (15 percent) of the liability shall be paid by 15th July, 2026; (b) fifteen percent (15 percent) of the liability shall be paid by 15th October, 2026; (c) fifteen percent (15 percent) of the liability shall be paid by 15th July, 2027; and (d) the remaining amount after payments shall be paid in (48) equal quarterly instalments, commencing from 15th July, 2028.

Provided that where an owner or person pays the entire outstanding cess liability in a single lump sum on or before 15 July, 2026, such owner or person shall be charged cess at the rate of (0.80 percent) of the value of goods from the date of full payment until 30th June 2029 and thereafter shall be charged cess at the rate of zero-point eight five percent (0.85 percent), unless otherwise provided by law. Explanation: For the purposes of this proviso, entire outstanding cess liability means the full amount of cess assessed or payable under this Act.

The execution of a Settlement Agreements shall be subject to unconditional withdrawal of all pending litigation by the owner or person or anyone acting on their behalf; and waiver of all claims, refunds, damages or costs against Government under this Act, it added.

Copyright Business Recorder, 2026