LAHORE: Two private contractors working on the Lahore Orange Line Metro Train project have so far showed `defiance` to Punjab Revenue Authority notices seeking details of services hired by them from third party.
The authority is awaiting information regarding all service providers who are registered with the two companies and providing machinery on rent for the package 1 of the project.
In separate letters to Habib Construction Services (Pvt) Limited and Maqbool Construction (Pvt) Limited in April 2016, the PRA states: `Services in relation to supply of tangible goods including machinery, equipment and appliances for use, without transferring right of possession and effective control of such machinery, equipment and appliances in or for Punjab are taxable under Section 57(2) of the Punjab Sales Tax on Services Act 2012 w.e.f July 1, 2015 vide Finance Act 2014 available on PRA`s website as appearing at Sr No 50 of the Second Schedule of Punjab Sales Tax Act 2012.
`It includes the servicesavailed by your organizations through usage of machinery on rent to be utilized during construction. PRA would like to acquire information regarding all service providers who are registered in your organizations and providing machinery on rent in the Orange Line Metro project.
Sources privy to the development told Dawn the letters were written to both companies with seven days deadline but the companies had yet to respond and the PRA was now considering to serve remaining notices.
They said the contractors were using machinery for construction of the project which the authority believed had been acquired from third party and are taxable.
Sources said the authority had initially calculated an approximate amount of Rs250million from the two contractors under the Sales Tax on Services.
They said on one hand the Punjab government was pressing PRA to meet the annual revenue target, but on the other hand the authority was not getting full support in bringing influential companies working on major construction projects in the tax net.
