WHT rates proposed for commercial gas; electricity consumers

KARACHI: The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has proposed withholding tax rate at five percent and 7.5 percent for commercial/industrial gas and electricity consumers.
According to the FPCCI budget proposals 2018/2019 that appropriate amendments may be made under Section 234A (4) of the Ordinance, so that only due tax is collected.
It further added that currently at per Section 235 read with Division (IV), Part IV of First Schedule to the Ordinance, the commercial as well as industrial consumers of electricity pay tax Rs.80 to Rs.1,500/per month, if the monthly electricity bill is up to Rs.20,000. However, if bill exceeds Rs.20,000, the tax is being collected at the rate of 12 percent and five percent for commercial and industrial consumers respectively. As per provision of Section 235(4) in case of company tax collected along with electric bill is adjustable against their tax liability and in other cases tax collected up to bill of Rs.30,000 is considered minimum tax, whereas collection of tax with electric bill over and above is adjustable.
FPCCI briefed that at present no tax is being collected along with gas bills except consumer of gas for CNG station only. On CNG Station withholding tax at four percent is collected under Section 234A of the Ordinance on the amount of their gas bill, whereas a large number of small and medium size taxpayer including wholesaler and retailer are not paying tax along with their gas bills.
Moreover, sub-Section (4) of Section 234A of the Ordinance, provides that the taxpayer (CNG Consumer) shall not be entitled to claim any adjustment of withholding tax collected or deducted under any other head, during the tax year.
The apex body said that due to the above provision of law, problem has been raised to the taxpayers, who are also having income other than from CNG station. For example, if a taxpayer, besides having income from CNG is also a salaried person and tax has been withheld under Section 149, while computing the Income from CNG and Salary, the entire tax deducted under various sections (including Section 149) is being adjusted against CNG Income as provided under Section 234A (4) of the Ordinance and tax on income salaries is shown as payable, at the time filing of income tax return of income.

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