According to the MD PPIB, there are certain outstanding issues pertaining to exemptions available to IPPs and Transmission Line Projects (TLPs) under the relevant power generation and transmission line policies that have not been incorporated in the relevant laws thereby rendering the IPPs and TLPs unable to avail concessions provided under respective policies and Implementation Agreements (IAs) signed with Government of Pakistan (GoP). These issues warrant resolution through amendments in the relevant laws and regulations.
In order to resolve the issues amicably at the earliest when Finance Bill is going to be presented in coming days, PPIB has divided these issues into two categories namely: (i) amendment required under relevant laws through Finance Bill; and (ii) resolution of operational issues through the issuance of exemption certificates by the FBR available under laws and regulations.
The following is the list of issues duly agreed by FBR in meetings between FBR and PPIB on April 25, 2019 and May 7, 2019 respectively, to be resolved by making appropriate amendments in relevant laws through upcoming Finance Bill: (i) exemption from imposition of tax on income of public sector projects; and (ii) sales tax on import of machinery and equipment for transmission line and period of exemption from imposition of income tax on transmission line projects.
PPIB argues that the issue not agreed by FBR in meetings of April 25, 2019 and May 7, 2019 requires resolution as GoP under relevant transmission line policy and concession agreements has provided concessions but these are not available under the relevant laws.
PPIB has also raised operational issues requiring resolution through issuance of exemption certificates from FBR available under relevant laws and regulations.
Following is the list of operational issues requiring early resolution for smooth completion and thereafter operations of IPPs and TLPs: (i) payment of sales tax and withholding tax- sharing mechanism between FBR and CBR AJK; (ii) attachment of accounts by Central Board of Revenue AJK in connection with sales and withholding tax; (iii) tax on payment made to the offshore supplier contractor imposed through Finance Act, 2018; and (iv) tax concession pursuant to section 159 of Income Tax Ordinance.
The FBR has again been requested to take necessary action for incorporating amendments in the relevant laws in order to harmonize the relevant laws with GoPs power generation and transmission line policies.
"If required, we will remain available for deliberation upon outstanding issues in the meeting with the chairman FBR before finalisation of current budget proposals so that recommendations can be included in the Finance Bill," the sources quoted Managing Director PPIB as saying.
