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Lahore Electric Supply Company (LESCO), has been supplying electricity to Lahore for years. However, according to the official document available with Outlook Pakistan, the corporate company has now been found guilty of tax fraud worth over Rs. 5 billion!

LESCO has been involved in construction, contractual execution of work and installation, erection, and commissioning services, etc. Actions such as these require a person, or a company, to pay taxes to the Pakistan Revenue Authority. However, LESCO has not been paying its due taxes to the Punjab Government or Punjab Revenue Authority (PRA). LESCO has failed to pay the required taxes. This company has violated the Sections 3, 10, 11, 14, 18, 19, 25 and 35 of the Punjab Sales Tax on Services Act 2012, along with the Rule 14 of Punjab Sales Tax on Services 2015. Due to the reason, a hearing was scheduled for LESCO at the court.

The court questions as to why it had not been paying the taxes, and why it had not been responding to the tax demands. Moreover, they are required to be legally tried because the acts of LESCO clearly show intentional tax fraud under Section 2(43) of the Act mentioned above.

The Authorised Representative of LESCO successfully adjourned the court on the first hearing held in December 2016, saying that the company was currently in the process of being registered with PRA. The case hearing was postponed to January, eventually to February and managed to get it delayed until March 2017. During this time, PRA submitted the facts that LESCO had been performing taxable acts, however, they failed to deposit the required amount. Moreover, LESCO is not a government body rather it is a corporate one. Hence, it should not be immune from paying any taxes.

Keeping all the above arguments under consideration, the Additional Commissioner Enforcement has declared LESCO guilty of tax fraud. He has demanded a recovery of the required tax worth over Rs. 5 billion for the years of 2014 to 2016. Moreover, has demanded a penalty of Rs. 287 million.

 

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