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Construction Law/Change in Legislation

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Question
Salam Sir!

I am working at an irrigation project with a Contractor in DI KHAN,PK implemented under FIDIC 1999 EPC.
Sir, Previously income tax deduction was 6% but from July 2014, Govt of PK has changed it as 8%. The Employer deducted 8% income tax from our last payment. We launched a refund claim of 2% and in support we presented sub clause 13.7. The Employer replied that it is the law of Govt. and you have to abideby it. Secondly it is an obligatory for us to deduct 8%. If you r right, get it refunded from FBR. Dear Sir, Kindly explain me your view point about this matter. The Contractor is loosing 2% of his income. Thanx a lot.

Answer
Dear Bhatti Sh.
Thanks for your question.I agree with your approach and suggest to invoke dispute resolution mechanism under cl.20.1 if the client do still have a different opinion . There is an expressed provision in the contract and hence matter has to be resolved with provisions with the contract
Regards-liaqat hayat

Construction Law

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Liaqat Hayat

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I can answer questions based on FIDIC 4 and FIDIC 1999 [design-build] with particular reference to time extension , price adjustment and disputes. I am in particular more inclined for response to points pertaining to how claims should be framed and put up in case of technical or other contractual shortcomings. Regarding procurement matters I have spent over 5 years as procurement specialist for highway authority and dealt with numerous claims and disputes in the capacity of "The Engineer" .

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