KARACHI: K-Electric (formerly Karachi Electric Supply Company (KESC), which is known for its ruthless billing and the least customer-friendly utility, is now among the tax-scammers as the Federal Board of Revenue (FBR) has served a Show Cause Notice on the power utility for illegally and unlawfully depriving the national exchequer of billions of rupees.
The Show Cause Notice issued by the FBR dated February 17, 2014, has fixed a hearing on February 21, 2014 for K-Electric to justify its position regarding evasion of tax of over Rs15 billion during the fiscal year 2012-2013. In case, the company does not represent at the hearing, the decision would be taken ex-parte on merit on the basis of evidence available on record.
The FBR has market K-Electric a late-filer of sales tax returns cum payment challan during the fiscal year 2012-2013. The FBR has also identified that K-Electric claimed/adjusted inadmissible input tax amounting millions of rupees against the suspended and blacklisted suppliers without having physical transfer of goods.
K-Electric also claimed/adjusted inadmissible input tax of over a billion rupees against the suppliers who have not declared the supplies made to the company or short supplies to K-Electric.
The company declared sales of Rs189 billion and charged sales tax on the portion of sales i.e. Rs112.165 (the amount paid by the consumers as the rest is paid by government as subsidy) billion while rest of the portion of sales was adjusted against the tariff without charging of sales tax thereon. However, K-Electric adjusted input tax as a whole of Rs138 billion against all purchases.
Moreover, the company collected sales tax from consumers amounting millions of rupees, but the same was not deposited with the national exchequer. K-Electric also collected security deposit from the consumers for energy consumed at the time of new connection but the tax on this amount was not deposited with the government.