ISLAMABAD: Prime Minister Office (PMO) has directed Federal Board of Revenue (FBR) to alter/ amend Income Tax Ordinance in the next budget, aimed to start supply of Thar coal to local industry, well informed sources told Business Recorder.
These directions were issued at a meeting held in the PM’s Office to resolve issues of Sindh Engro Coal Mining Company (SECMC) under the chair of Mohammad Jehanzeb Khan, SAPM on Effective Governance.
National Transmission and Dispatch Company (NTDC) highlighted that progress on transmission lines is on track and already attained 77 percent completion. It highlighted the issue of Right of Way in Tando Allahyar district of Sindh.
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NTDC officials maintained that if the issue of Right of Way is not resolved it may delay the whole project.
Federal Board of Revenue (FBR) apprised that SECMC may not provide excess coal to the industry owing to provision in the Income Tax Ordinance (Section 65) wherein it is stipulated that the said credit shall only be availed if the coal is supplied exclusively for power generation. Representative of FBR observed that the existing provision is restrictive and can be reviewed to harness the potential of Thar coal.
Secretary Railways noted that CDWP, in its meeting held on December 22, 2022 proposed cost sharing of “Thar Coal Rail Connectivity” on 50-50 basis between Federal Government and Government of Sindh. Since then, coal demand has been firmed up but Government of Sindh seems to be more interested in revenue sharing model instead of provision of loan.
After detailed discussion on the issues and considering viewpoints of all the participants, the meeting decided that NTDC will complete 100 per cent work on transmission line by the end of April 2023. NTDC will also submit weekly report to Prime Minister Office.
The meeting decided that strategic roadmap team of power sector will add milestones to the PM’s stocktaking and regular monitoring.
The meeting also decided that Chief Secretary Sindh will resolve issue of Right of Way faced by NTDC in district Tando Allahyar on priority.
FBR is to consider suitable amendments in Section 65(F) of the ITO in the next Finance Bill so that local industry may reap benefits of Thar coal.
State Bank of Pakistan in coordination with commercial banks was tasked to resolve the issue of pending LCs of SECMC’s import of coal-related machinery.
Secretary Planning is to convene a meeting on rail connectivity of Thar coal in line with the firmed up demand and develop financing modalities of Thar coal rail connectivity project of Pakistan Railways in line with decision of CDWP of December 22, 2022 wherein it was decided to share cost between Federal Government and Government of Sindh on 50:50 basis.
Copyright Business Recorder, 2023