Lesco controversy: FBR taken to court over Rs3b tax notification
Lahore High Court issues stay order.
LAHORE:
The Lahore High Court (LHC) has issued a stay order to the Federal Board of Revenue (FBR) for a Rs3 billion sales tax notification sent to the Lahore Electric Supply Corporation (Lesco) recently, and has asked a board representative to appear in court this week.
According to the recent amendments to taxes by the government under the Presidential Ordinance, FBR had issued a notice to Lesco demanding payment of Rs3 billion in additional sales taxes. The notice also asked Lesco to carry out the payment before June.
Lesco replied back to the notification saying it could not pay the additional levy, as it would mean raising electricity tariffs for their consumers, a step it was unwilling to take due to the burden it would place on its customers.
FBR responded to Lesco saying it would not revoke the sales tax, and would make Lesco pay one way or another. Following this response, Lesco took the case up with LHC and accused FBR of sending an illegal notification. As a similar case is already under way with the Supreme Court, the FBR does not have the right to impose the tax on the power supplying firm at the moment.
The hearing was presented to Justice Umar Atta Bandial at the LHC where, after hearing the case, he ordered a stay order on the FBR notification. He further called for an FBR representative to appear in court along with the deputy attorney general on March 24 to further proceed with the case.
Published in The Express Tribune, March 23rd, 2011.
The Lahore High Court (LHC) has issued a stay order to the Federal Board of Revenue (FBR) for a Rs3 billion sales tax notification sent to the Lahore Electric Supply Corporation (Lesco) recently, and has asked a board representative to appear in court this week.
According to the recent amendments to taxes by the government under the Presidential Ordinance, FBR had issued a notice to Lesco demanding payment of Rs3 billion in additional sales taxes. The notice also asked Lesco to carry out the payment before June.
Lesco replied back to the notification saying it could not pay the additional levy, as it would mean raising electricity tariffs for their consumers, a step it was unwilling to take due to the burden it would place on its customers.
FBR responded to Lesco saying it would not revoke the sales tax, and would make Lesco pay one way or another. Following this response, Lesco took the case up with LHC and accused FBR of sending an illegal notification. As a similar case is already under way with the Supreme Court, the FBR does not have the right to impose the tax on the power supplying firm at the moment.
The hearing was presented to Justice Umar Atta Bandial at the LHC where, after hearing the case, he ordered a stay order on the FBR notification. He further called for an FBR representative to appear in court along with the deputy attorney general on March 24 to further proceed with the case.
Published in The Express Tribune, March 23rd, 2011.