Supply of electricity by using HSD: Power generation companies to pay up to 37 percent ST

The Federal Board of Revenue (FBR) will charge sales tax in the range of 22 to 37 percent ad valorem on supply of electricity by power generation companies, producing electricity using high speed diesel (HSD) during January to June 2015. A senior FBR official said that a technical notification has been issued which enables HSD using Independent Power Producers (IPPs) to seek sales tax adjustment as per sales tax rates applicable for the months of January to June 2015.
According to an S.R.O.600(I)/2015 issued here on Thursday, sales tax shall be charged on the supply of electricity (Pakistan Customs Tariff heading 2716.0000) at the specified rates as supplied by the power generation companies generating electricity exclusively using high speed diesel. The rates of sales tax would be 22 percent ad valorem during supply of electricity in January 2015; 27 percent ad valorem in February 2015; 37 percent ad valorem in March 2015; 32 percent ad valorem in April 2015; 34 percent ad valorem in May 2015 and rate of sales tax would be 28 percent ad valorem during supply of electricity in June 2015.
According to a clarification issued by the FBR related to SRO 600(1)/2018 dated 25-06-2015, it is categorically denied that there is no increase in the sales tax rate on HSD. A technical SRO has been issued which enables HSD using Independent Power Producers (IPPs) to seek adjustment according to the rates applicable for the previous months of January to June 2015. It is further clarified that there will be no impact on the HSD prices, FBR added.
Following is the text of the notification issued here on Thursday: In exercise of the powers conferred by clause (b) of sub-section (2) of section 3 of the Sales Tax Act, 1990, the Federal Government is pleased to direct that the sales tax shall be charged on the supply of electrical energy (PCT heading 2716.0000) at the rates indicated in the Table below, as supplied by the power generation companies generating electric power exclusively through high speed diesel (HSD), namely:

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TABLE

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S.

No     Period of Supply             Rate

(1)     (2)                          (3)

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1     January, 2015       22% ad valorem

2     February, 2015      27% ad valorem

3     March, 2015         37% ad valorem

4     April, 2015         32% ad valorem

5     May, 2015           34% ad valorem

6     June, 2015          28% Ad valorem

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