Centre, provinces agree to resolve GST issue

ISLAMABAD: The centre and provinces have agreed to resolve the issue of GST on restaurants/hotels, construction sector, movement of petroleum products through transportation and imposition of toll tax.

They have divergent views on issues related to GST, as both wanted collection of tax as their right. Under the Constitution, GST on goods is a federal matter while on services it is a provincial issue.

There has always been a controversy over the definition of goods and services. Now the government has constituted a National Tax Council (NTC) to sort out differences over lingering and complicated issues. All the stakeholders have decided to hold the next meeting of National Tax Council (NTC) within seven to 15 days.

The NTC, which met with Finance Minister Shaukat Tarin in the chair Tuesday, in its maiden session had also discussed harmonisation of GST on both goods and services and placement of a uniform GST return to simplify filing on a monthly basis.

FBR Chairman Dr Muhammad Ashfaque Ahmed replied in the affirmative when he was contacted Wednesday to inquire whether he had presented his idea to extend cooperation with the provinces to fully utilise the potential of Agriculture Income Tax (AIT) but he did not elaborate.

Sources said that cooperation on AIT was not part of the NTC agenda. The center and provinces largely discussed outstanding issues pertaining to GST. Though clear the definition of GST on goods and services has become a complicated issue so NTC is an appropriate forum to deliberate upon thorny issues and make efforts to find out solution acceptable to all sides.

According to an official press release issued by the Ministry of Finance on Wednesday, Federal Minister for Finance and Revenue Shaukat Tarin presided over the first meeting of the National Tax Council (NTC) at the Finance Division Wednesday.

Finance ministers of all the four provinces among senior federal and provincial government officers participated in the meeting. Mr Tarin welcomed the participants and stressed upon the need for greater cooperation between the federal and the provincial governments in matters relating to harmonisation of general sales tax (GST). He hoped that under the umbrella of the National Tax Council both the federal and provincial governments would move towards the harmonising taxes across the multiple jurisdictions so as to facilitate the businesses and reduce the cost of doing business in Pakistan. The federal finance secretary highlighted the TORs of the National Tax Council and the progress achieved so far. The Federal Board of Revenue and the respective provincial finance departments gave a productive and positive input on various taxation issues which came under discussion.

The provincial finance ministers welcomed the initiative of the federal government and assured that they would move ahead under the umbrella of NTC for the betterment of the country.