AEDB Proposes Amendments To Sales Tax Act

KARACHI, (UrduPoint / Pakistan Point News - 30th May, 2021 ) :To promote and incentivise renewable energy in line with the present government's policy, the Alternative Energy Development board (AEDB) has supported a proposal seeking amendments to the Sales Tax Act for applying General Sales Tax (GST) on net billing for the distributed generation facilities in Karachi.

AEDB CEO Shah Jahan Mirza has urged the Chairman of the Federal Board of Revenue (FBR) in a letter for considering the proposal to amend the Sales Tax Act during the upcoming Federal Budget, said a news release on Sunday.

He said it has been highlighted by the consumers of K-Electric that the power utility is charging GST to such consumers on the basis of gross units supplied to the consumers instead of the net units supplied citing that the Sales Tax Act does not contain any provisions for netting.

The AEDB chairman referred to an amendment to the National Electric Power Regulatory Authority (Alternative and Renewable Energy) Distributed Generation and Net Metering Regulations 2015 made vide SRO on September 13th, 2018.

It stated: "The kWh supplied by a Distributed Generator during peak hours shall be net off against the kWh supplied by a Distribution Company during peak hours and the kWh supplied by a Distributed Generator during off peak hours shall be net off against the kWh supplied by a Distribution Company during off peak hours".

All the DISCOS (distribution companies) of the country, in compliance with the NEPRA's definition of the Net Energy Billing, have applied GST on net units,but the "K-Electric continues collection of GST on gross units since according to its tax advisor the Sales Tax Act of 1990 does not contain any provision of netting", said Lt-Gen (Retd.) Moin Ud-Din Haider, an electricity consumer of K-Electric, in a separate letter to the Chairman FBR.

He earlier wrote to the AEDB on the matter on behalf of over 200 Roof-Top Solar license holders.