KARACHI: The Federal Board of Revenue (FBR) was directed by a division bench of High Court of Sindh (SHC) on Monday to decide the representations made by public (government) sector Independent Power Producers (IPPs) in respect of “Capacity Charges” within a week.
The bench comprising Justice Sajjad Ali Shah and Justice Junaid Ghaffar was hearing two separate but identical constitution petitions filed by Jamshoro Power Generation and Lakhra Power Company alleging discrimination. The petitioner maintained that private sector IPPs including Hubco, Kapco are exempted from the “Capacity Charges” while petitioners are being subjected to extra Sales Tax under Rule 13 (3) of Sales Tax Special Procedure Rules2007 relating to chargeability of Capacity Charges.
The counsel for petitioner IPPs told the court that petitioners have made representation to the respondent Chairman FBR and reminders were also sent. He maintained that FBR in a letter conceded that public sector IPPs shall be treated at par with the private sector IPPs but the decision on representation was not being made causing a loss to the petitioners as collection of special levy is continuing. He maintained that both the public sector companies are burdened with more tax which results in increase in power tariff for common man.
The bench after hearing the counsel for petitioner, counsel for Regional Tax Office (RTO) Hyderabad division and Deputy Attorney General Asim Mansoor Khan disposed of the petition with the direction to the FBR to decide the representations by the petitioners IPPs in a week time. The bench also restrained the respondents from collecting the impugned charges till decision by the FBR authorities.