20000202

Notices issued to govt Hubco demands Rs 535m GST re-imbursement

RECORDER REPORT

KARACHI: Hub Power Company (Hubco) has issued notices to the government demanding Rs 535 million under the head of GST following Wapda's refusal to pay this amount to the company.

"Under the implementation agreement (IA), Hubco is entitled to, and the government of Pakistan is obligated to honour the contractual commitments of Wapda, PSO and the State Bank of Pakistan towards Hubco. Therefore, Hubco has issued Special Temporary Funding (SYF) notices to the government regarding the outstanding GST of over half a billion" (rupees), an official of the company said on Tuesday.

Earlier, Wapda had opted for not paying GST to Hubco, which the company passed on to Wapda since it had paid the amount to the PSO on its furnace oil supplies.

Dr. Anjum Siddiqui, of Hubco, said that since the introduction of GST on electricity in August 1999, Wapda has been resisting its implementation. Non-payment of GST by Wapda has resulted in a loss of Rs 535 million to Hubco, he said.

Anjum further said that Hubco had to pay GST to PSO on its purchase of furnace oil which was to be recovered through the tariff from Wapda. Since August 1999 up to January 2000, Hubco billed Wapda for Rs 535 million as GST for the energy purchase charges, which Wapda has not paid so far. Hubco, however had to pay GST to the tune of Rs 434 million to PSO on furnace oil and Rs 71 million to the government of Pakistan.

"We are good corporate citizens and (are) paying our share of the GST. Likewise we expect Wapda to fulfil its obligation by paying GST on the electricity that it purchases," Anjum said.

Non payment of GST by Wapda was setting a bad precedent and was giving a poor signal to foreign investors, he said.