Auditor General of Pakistan (AGP) revealed that federal government did not release Rs 17.12 billion out of Rs 72.8 billion Sales Tax collection on services to the provinces. According to Audit Report 2011-12 on the account of federal government, the sales tax on services is a provincial subject under the 18th Constitutional Amendment, and may be collected by the respective provinces, if they so desire.

During financial year 2010-11, Federal Board of Revenue (FBR) collected revenue of Rs 72.799 billion on account of Sales Tax on behalf of the provinces against which the Finance Division released funds of Rs 55.683 billion to the provinces, which resulted in short release of Rs 17.12 billion to the provinces.

The report said that the audit was of the view that the provinces were deprived of their due share of sales tax on services.

In this regard, the management replied that FBR provided the final reconciled tax collection figures for financial year 2010-11 along with group-wise and province-wise break up of GST on services, where possible. The management has accepted the Audit observation.

The Departmental Audit Committee (DAC) held on 28.12.2011 directed that the observation would stand valid till completion of adjustment and its verification by the Audit. In this regard, the Audit recommended that the due share of sales tax on services may be released to the provinces.

Copyright Business Recorder, 2012