FBR advises Inland Revenue to facilitate exporters avail utilities at reduced rates

KARACHI: The Federal Board of Revenue (FBR) has advised all chief commissioners of Inland Revenue to facilitate the exporters by issuing necessary confirmation to the utility providers for according preferential/reduced rate tariffs to genuine exporters.

FBR had earlier requested distribution companies (DISCOs) and gas provider companies to independently accord preferential tariff at reduced rate at their own end, available to the five export oriented sectors on supply of electricity and gas.

It was clarified that zero rating allowed by FBR to various taxpayers under various Sales Tax General Orders was done on the basis of some internal checks that were specific to FBR and denial by FBR to allow zero rating on utilities under above referred STGO had no nexus/negative inference on the preferential tariff that was otherwise available to five export oriented sectors.

As the zero rated regime has been abolished after withdrawal of SRO 1125(I)/2011 through Finance Act 2019, a number of registered persons approached FBR for clarification on the issue as they were facing hardship in availing reduced rate tariff on new connections/old connections which were not zero rated earlier.

In the meanwhile a number of registered persons filed writ petitions in the Lahore High Court and the Court directed the petitioners/zero rated exporters to pay the gas bill at the reduced rate tariff at $6.5/mmbtu and directed the petitioner/exporters which were not previously beneficiary of the SRO before June 30, 2019 to seek clarification from FBR, if they fall under new subsidy regime.

The field formations of FBR have details of exporters and even zero rating under erstwhile regime were allowed on the basis of field reports.

The Chief Commissioners are therefore directed to implement the directions of the High Court and facilitate the exporters by issuing necessary confirmation to the utility providers for according preferential/reduced rate tariffs to genuine exporters and report progress on fortnightly basis.

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