ISLAMABAD: The newly appointed Federal Tax Ombudsman (FTO) has categorically stated that the FTO office is not an adjudicating authority for taxpayers and cannot determine tax liability.
According to the latest order, the FTO made significant observations regarding the powers, jurisdiction, and limitations of the office.
“This Office reiterates that it is not adjudicating upon tariff or regulatory policy under NEPRA, nor determining substantive tax liability, but is referring the matter for uniform administrative resolution to avoid inconsistent treatment and recurring grievances,” the order said.
The Office noted that the controversy involves the interface between fiscal provisions and the regulatory net metering framework. Under Section 9 of the FTO Ordinance, the Office cannot undertake the determination of tax liability or issue directions that may be construed as a departure from NEPRA’s mandated billing structure or broader regulatory policy.
The core issue emerging from the record is that different practices appear to prevail across the country regarding the treatment of net metering bills. One distribution company is charging taxes in a particular manner, while others are reportedly not following the same approach.
This divergence has generated grievances among consumers of K-Electric.
The complainant’s plea of discrimination, in the strict legal sense, was not substantiated as a deliberate discriminatory act attributable to the tax administration. Rather, the grievance stems from a lack of uniform implementation and clarity at the national level.
It was further observed that DISCOs and K-Electric function primarily as billing and collection agents within the statutory framework. Matters requiring national uniformity in fiscal treatment cannot be left to fragmented regional practices, nor can stakeholders seek extraordinary remedies in isolation on issues requiring policy-level determination.
The record also reflects that the Federal Board of Revenue (FBR) had previously issued clarifications and instructions regarding the tax treatment of net metering bills. However, these do not appear to have been implemented uniformly across jurisdictions for reasons not fully explained.
Since the matter involves uniform application, administrative coherence, and coordination with other relevant government and regulatory bodies, it requires authoritative resolution at the FBR level rather than continued operational inconsistency.
Accordingly, the complaint was disposed of with the following recommendations:
FBR shall take up the matter at the appropriate policy and administrative level, in consultation with relevant stakeholders, to ensure clarity and uniformity regarding the tax treatment applicable to net metering cases across all jurisdictions.
FBR shall ensure that any clarification or instructions issued by the Board are effectively communicated to and implemented by all concerned field formations so that inconsistent practices do not persist.
A compliance report, along with copies of instructions issued for uniform implementation, shall be submitted to the FTO office within 60 days, the order added.
