KCR tax exemption summary still in pending

KARACHI: Sindh government announced on December 2013 to exempt tax of machinery and other equipment required for the revival of Karachi Circular Railway (KCR), fulfilling a key condition of Japan International Corporation Agency to initiate work on $2.6 billion KCR project.

However, a legal hindrance in this regard was not removed despite repeated announcements by the provincial government as the summary to notify the waiver of Sindh Sales Tax, Infrastructure Cess and Provincial and local taxes is pending with Secretary Finance Sohail Rajput.

According to documents available with the PPI, Chief Secretary Sindh on 20 May 2013 decided that secretary finance should move summary for the waiver of Sindh Sales Tax, Infrastructure Cess and other provincial, local, municipal taxes and levies.

The documents stated that the 85 percent of the tax involved in this case was infrastructure cess, and it could be waived off under rule 14 (1) of SDMIC Rules, 1994, which states that the tax would be exempted if the consignment is owned by federal or provincial government.

Moreover, the 15 percent remaining tax share of the Karachi Municipal Corporation could be exempted under rule 14 (2) (c) of SDMIC rules at the time of import of the consignment.

A source privy to the development told PPI that the decision to wave off taxes was finalized in the ministerial committee meeting but the Secretary Finance was not signing the summary for unknown reasons, thus defying provincial and federal government’s initiative to launch KCR project which is pending for years.

Talking to PPI over telephone, Minister for Transport Mumtaz Jakhrani, who is also a member of ministerial committee constituted by CM Sindh on KCR Revival, said that provincial cabinet had approved the decision but said that he was unaware that the summary was pending with Secretary Finance.

He said that he would raise the issue with the secretary so that the process could be moved forward. “Our government wanted to complete this project within our tenure so that Karachiites could get better transport facilities.”

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