K Electric will collect the charges fixed by KMC from the consumer through its monthly bills
Karachi: KMC has submitted an agreement with K Electric regarding municipal tax collection in the Sindh High Court.
A report and agreement was submitted by KMC on the petition filed in the Sindh High Court against the collection of municipal tax in electricity bills.
The report stated that the Sindh High Court had directed on March 28 that an agreement between KMC and K Electric regarding the collection of municipal charges should be submitted. Some documents have also been submitted along with the agreement, including June 16. Notification issued by CDGK dated 2008, includes Resolutions related to Utility Bills, Electricity Bills and Municipal Taxes.
As per the agreement between KMC and K Electric, KMC appoints K Electric as the collecting agent for collection of municipal charges, charges fixed by KMC from K Electric consumers in their monthly bills. K Electric will charge 7.5% of the municipal charges collected monthly, apart from this, K Electric will also deduct some of the electricity bills owed by KMC from the municipal charges collected. While the remaining amount will be transferred to the MC’s account.
An agreement between the Karachi Metropolitan Corporation and K Electric, which allows the latter to collect the disputed Municipal Utility Charges and Taxes (MUCT) for KMC, is designed in such a way that the power utility has its A large portion is allowed to be deducted. The power utility is also entitled to deduct 50% of its outstanding electricity dues against KMC from the remaining monthly collection of MUCT.
This information came to light when KMC’s counsel presented the contract before the Sindh High Court in a set of petitions filed against the provincial government’s move to outsource MUCT to KE in compliance with the court’s earlier order. What did
The agreement, signed in June 2022, states that KMC has acknowledged a total of Rs 1.562 billion in power arrears till July 2022 and will deduct it as per the KE Eight Source Agreement.
The court document signed between the civic body and the power utility has kept the details hidden from public view since KMC’s counsel filed it.
As per the agreement, KMC will collect MUCT from domestic and non-domestic consumers through their monthly electricity bills and will be charged as per category of consumers as notified by KMC from time to time.
The agreement states, “(a) KE shall deduct 7.5% at source on the total monthly deposit of MUCT; (b) KEMUCT shall deduct from the monthly receipts of KMC through the monthly electricity bills of KMC. (c) After deducting (a) and (b) from the monthly collection of MUCT, 50% of the remaining monthly collection of MUCT shall be deducted towards the electricity dues payable by KMC. After deduction of (a), (b) and (c), the remaining amount shall be transferred to the designated account of KMC.
It states that in case of K Electric’s processing of a bill for any reason beyond its control, the power utility will not be liable to make timely payment to KMC. The levy and collection of MUCT does not extend to the jurisdiction of the respective Cantonments within Karachi and if any such tax is inadvertently levied on any customer falling within the jurisdiction of the Cantonment Boards, K Electric shall, at its sole discretion, correct the same. And will add.
Regarding termination of the contract, it said the power utility shall have the right to terminate the contract at any time without assigning any reason by giving 30 days prior written notice. The next hearing of the application will be on April 24.
During the previous hearing, senior counsel and judicial assistant Munir A Malik informed the court that the government needs to follow the rules of the contract and cannot designate KE to collect MUCT through electricity bills. .
He added that under the relevant laws, even K Electric cannot exercise its coercive powers to recover such tax.
In 2022, Jamaat-e-Islami Karachi chief Hafiz Naeem-ur-Rehman and others filed separate petitions and said that after the approval of the then Sindh Chief Minister, the Chief Secretary had issued a notification on 21 January 2022 in which the provincial The Department of Energy and KMC were allowed to join the KE under the Sindh Local Government Act (SLGA) 2013 for collection of MUCT.
The petitioners further contended in the petitions that the MUCT was implemented in light of the resolution passed by Karachi Administrator Murtaza Wahab which is illegal and without provision of law. In September 2022, the High Court, through an interim order, restrained the power utility from collecting MUCT through electricity bills.
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