LAHORE - The Punjab Revenue Authority (PRA) has rejected the letter presented by Chinese companies – working in Punjab on energy, transport and infrastructure under CPEC - in which they opposed the imposing of sales tax.

The PRA said the letter is based on unreal claims and imaginations. It is pertinent to mention here that the Chinese companies had written the letter to Punjab Chief Minister Shehbaz Sharif in which they said that imposition of sales tax is a conspiracy against CPEC. The chief minister had directed the PRA to submit reply in this regard. While replying, the PRA has rejected the letter.

In this situation, the chief minister has formed a committee under the leadership of the Punjab finance minister. The committee comprised the Punjab chief secretary, P&D chairman, finance secretary and PRA chairperson.

In a response to the letter, the PRA said that the Punjab government imposed sales tax on services on May 2013, and the government civil work and civil work of Cantonment Board were exempted from this tax.

Later on July 1, 2016, 16 percent sales tax was imposed on government civil work but later it was reconsidered and sales tax on civil work was reduced in October and it was also decided that the sales tax will be imposed on such national and international funded project which started after July 1; whereas, the sales tax would be zero percent on the projects started before July 1. “Therefore, this claim is wrong that the sales tax will increase the cost of the projects,” the PRA stated.