ISLAMABAD: The Sindh High Court (SHC) ruled on Monday that the subsidy and fuel cost recovered by K-Electric from consumers must be treated as part of its turnover for calculating minimum tax under Section 113 of the Income Tax Ordinance 2001.
The judgment came in response to appeals filed by the Revenue Department challenging the Appellate Tribunal Inland Revenue’s decision to exclude government-provided subsidies from K-Electric’s turnover. The SHC ruled in favor of the Revenue Department, stating that both the fuel cost and subsidy adjustments receivable from the government are to be included in the turnover for minimum tax purposes.
The court clarified that K-Electric’s tariff adjustments, reimbursed by the federal government, are part of its gross receipts and therefore subject to minimum tax under Section 113. The judgment sets aside earlier tribunal rulings and allows the Revenue Department’s appeals in all four references.
Story by Sohail Sarfaraz
