KARACHI: Sindh Chief Minister Syed Murad Ali Shah on Monday said that the provincial government was facing frequent arbitrary and unauthorised deductions by Federal Board of Revenue (FBR) through State Bank of Pakistan in connection to withholding and sales tax on goods from the Provincial Consolidated Fund (PCF).
The chief minister, while presiding over a meeting to review the deductions, decided to write a letter to the prime minister by tomorrow requesting to direct the Ministry of Finance to refund the amount of Rs7.054 billion to Sindh government.
CM Sindh said he had taken up the matter in the Council of Common Interests (CCI) that FBR has illegally drawn the money from PCF in contravention of the constitution. He noted that from 2014-15 to 2017-18 FBR has overall deducted Rs9.831 billion, and the amount must be refunded to the Sindh government.
The chief minister, who also holds the portfolio of finance department, said that in 2012-13 Rs633.119 million were deducted by FBR from PCF in respect of withholding tax. In 2015-16 Rs6127.115 million were deducted, and in 2016-17 another Rs294.5 million were deducted. In this way during the last three financial years Rs7,054.734 million have been take away from Sindh.
CM Sindh said that the deduction was made upon executive orders of the FBR functionaries, therefore such order cannot be treated as authorised under the constitution. He expressed satisfaction that the State Bank of Pakistan in its letter of April 3, 2017 addressed FBR authorities over the matter.
He was further informed by his finance team that that the FBR has also deducted various other amount from the PCF over claims by different departments of the Sindh government on sales tax.
It was pointed out that the FBR during the year 2014-15 at source deducted Rs816.267 million from Excise department, Rs11.878 million from Board of Revenue, Rs6.662 million from Mines and Mineral department and Rs1.704 million Transport & Mass Transit Department totaling Rs881.513 million.
In 2015-16 the FBR deducted Rs6127.116 million from Excise & Taxation department, RS1.700 million from Information dept, Rs11.878 million from P&D, Rs7.229 million from Board of Revenue, Rs59.069 million from Mines & Mineral dept, Rs122.324 million from Prisons and Rs87.750 million from Education department. The total of 2015-16 deduction comes to Rs6417.076 million.
In 2016-17 FBR deducted Rs76.870 million from Excise department, Rs11.119 health department, 290.499 million from Home department, Rs415.891 million from Finance department, Rs12.834 million from Board of Revenue and Rs9.821 million from Mines & Mineral department. This totals Rs401.560 million. The overall deduction has been worked out at Rs9.831 billion.
The chief minister quoting Article 119 of the Constitution said that the custody of the PCF and the authority to withdraw money from it rests with the provincial government.
Therefore, he added that any arbitrary withdrawal of money from the PCF by FBR is a clear violation of the constitution. He said that Article 121(d) of the constitution specifies that the expenditure can only be made from PCF for any sum required to satisfy any judgement, decree or award against the province by any court or tribunal.