The National Grid Company (NGC), formerly known as the National Transmission and Despatch Company (NTDC), has requested exemption from the 3% value-added tax (VAT) on the import of machinery and equipment for its development projects. The request has been made following ongoing correspondence with the Federal Board of Revenue (FBR) and the Power Division, but no resolution has been reached so far, Business Recorder reported.
NGC, in its letters dated May 29, 2023, and December 8, 2025, has urged the Joint Secretary (Transmission), Power Division, to bring the matter to the Ministry of Finance, seeking an exemption under the Sales Tax Act, 1990.Â
According to NGC, as an infrastructure development entity, it imports equipment exclusively for its own operational use. Under the 12th Schedule to the Sales Tax Act, goods imported by manufacturers or registered service providers for in-house consumption are exempt from VAT. However, despite fulfilling these criteria and being designated as a service provider, NGC continues to face VAT imposition by Customs authorities.
The company has highlighted the adverse financial impact of this tax on its operations and ongoing development projects. NGC has requested support from the Power Division on two fronts: first, advocating for an amendment to the 12th Schedule to include “transmission of electricity” under the exempt categories; and second, issuing interim directions to Customs authorities to halt VAT charges on NGC’s imports until the amendment is formally enacted.
The NGC’s request comes amidst growing concerns about inefficiencies within the transmission sector. The restructuring of NTDC into NGC was driven by the need for better strategic planning and improved project execution.Â
