PESHAWAR: The Khyber Pakhtunkhwa government has decided to initiate action against the industrial units evading Infrastructure Development Cess (IDC) by clearing their goods and raw materials in Karachi.
A high-level meeting held on Wednesday at the Chief Minister’s Secretariat that was attended by officers of the Customs and Excise Department was informed that for a number of industrial units in the province there was a tendency for clearing their goods and raw materials in Karachi.
The meeting, besides others, was attended by principal secretary to the chief minister, Muhammad Israr Khan, who also holds the charge of the office of the Secretary Excise and Taxation Department and Nasir Khan, Director General of Excise and Taxation and Customs officers.
Sources told Media that the meeting was informed that by clearing their goods in Karachi around 20 industrial units evaded one per cent IDC, which they had to pay to the province. The meeting was further informed that during the last two months of the current financial year 2016-17, Rs21 billion Peshawar-bound goods had been cleared in Karachi. It cost Rs820 million to the federal government and Rs30 million to the provincial exchequer.
The Khyber Pakhtunkhwa government approved rules in 2014 under the Finance Act to impose IDC and set a collection target of Rs1 billion for the financial year 2015-16, which it had to revise and set at Rs200 million.
It raised the IDC collection target for the current year and set at Rs1.1 billion, but this time too it has to revise it and lower it to Rs750 million.
Earlier, the business community rejected the IDC and Khyber Pakhtunkhwa Chamber of Commerce and Industry (KPCCI) president had said it would be a double taxation and they would not accept it.
Chief Minister Pervez Khattak had written a letter to Federal Finance Minister Ishaq Dar, earlier this year, requesting him to direct Sindh government for not collecting the tax.
The Sindh province continued to receive the Cess that has led to a dilemma for the industrialists and traders in Khyber Pakhtunkhwa.
However, the meeting on Wednesday made it clear that those who even paid the IDC in Sindh would have to pay it in Khyber Pakhtunkhwa as well.
It was also informed that about 20 industrial units had cleared their goods in Karachi and the provincial government had decided to initiate action against these units. It also requested the Model Customs Collectorate (MCC) for assistance in collecting tax from these units.
The MCC also provided list of these units to the provincial Excise Department, which include eight unites, in Peshawar, 10 units in Hattar Industrial Estate and two units in Gadoon Industrial Estate.
It was also decided that soon show-cause notices would be issued to these units for paying IDC.The MCC officers, however, informed the meeting that the rate of IDC in Khyber Pakhtunkhwa was high and suggested that the Excise Department should bring it down to 0.75 from one percent.
They also suggested that the IDC should be levied on the original value of goods.However, the meeting was informed that the matter of the IDC rate was taken up with the Law Department and a decision would be taken by the end of this month.
