FBR imposes Liquidated Damages on Contractors/Suppliers
Federal Board of Revenue (FBR) is in the process of implementation of Tax Reforms through financing from the World Bank/DFID. These reforms with the name of Tax Administration Reform Program' (TARP) were started w.e.f. January 2005 and financing of this program is completing by 31.12.2011.
There were different activities undertaken under this program including infrastructure upgradation which included both Information Communication Technology (ICT) and physical infrastructure upgradation. Under this program, Tax Offices throughout the country were upgraded through interior development and refurbishment. At 13 locations, Transit Accommodations were constructed.
For this purpose, after completion of the prescribed processes by the World Bank, contracts were awarded to different contractors/suppliers for completion of the jobs. In every contract there were given timelines for completion of the activities. In case of intentional default by the contractors/ suppliers Liquidated Damages (LD) are imposed on the contractors/suppliers.
In this process, FBR has imposed Liquidated Damages ranging from Rs.65,000/- to Rs.4,200,000/- on M/s EMBA Corporation for delayed delivery of the goods, M/s National Engineering Works, Ahmad Hussain Jagirani, M/s Perk Engineers & Contractors and M/s SKB for delayed completion of the interior development and refurbishment of the contracted activities.
FBR has advised all its contractors and suppliers to abide by the given timelines failing which penal provisions as incorporated in the related contract agreements will be invoked.