Punjab backs out Quetta NFC decision, while Sindh re-iterates on revenue generation amid multi-criteria

The Punjab’s stance on the National Finance Commission (NFC) award is unchanged and it still believes distribution of resources must be population-based, the Punjab Assembly has been told. The treasury and opposition benches, while debating on the progress made in the inter-provincial meetings on the distribution of resources, were assured that Punjab’s stance on NFC Award remain unchanged, as the province still believes in population-based distribution of resources.

Earlier, following NFC Award meeting at Quetta, Sindh Chief Minister, Syed Qaim Ali Shah had said that our main demand i.e. for multi-criteria for the NFC Award was accepted by all the provinces including the Punjab. As per multi-criteria, the Award would be determined on the basis of population, poverty, backwardness and revenue generation. Our demand that GST on Services should go to the provinces was also acceded to and so was our demand for considering revenue generation as the criteria for determination of award, which is a "big achievement", he added. He told that the Federal Government wanted to levy Value Added Tax (VAT), but it has not yet been levied and we will talk to them on this issue. "It is a separate issue and has no relevance to the NFC", he explained. The Chief Minister said that the next meeting of the NFC would be held in Peshawar on October 25 after which the award expected to be announced within a month.

Meanwhile, Sindh Assembly members, agitating on Punjab backing out on the Quetta NFC meeting decision, re-iterated their demand for making the revenue generation a criterion for resource distribution. General sales tax (GST) should be distributed on the basis of “revenue generation” as per the National Finance Commission (NFC) Award, or Sindh will not get much benefit from a decision to transfer GST on services to the provinces, said Muttahida Qaumi Movement (MQM) parliamentary leader in the Sindh Assembly, Syed Sardar Ahmed.

He, however, welcomed the NFC’s reported decision in Quetta to transfer GST on services to the provinces. Ahmed appreciated the efforts of the Sindh chief minister during the Sindh Assembly session on Tuesday, but said that “sentimentalism” should be avoided over the proposed decision to hand over GST to provinces. “We have lost many things because of the emotional approach. The real question is the mode of transfer or the criteria of distributing GST among the four provinces,” he said, adding that if GST on services is distributed on the basis of collection, Sindh will not get anything, because GST on phone and electricity goes to Rawalpindi and Lahore where headquarters of these utilities are located. Ahmed demanded that GST to provinces should be given on the basis of revenue generation, because distribution on the basis of population will not benefit Sindh. Sindh will suffer if revenue generation was not made a criterion of the NFC, he said.