FBR fixes CNG value for charging sales tax

FBR fixes CNG value for charging sales tax

In a move to streamline and regulate the collection of sales tax on compressed natural gas (CNG), the Federal Board of Revenue (FBR) has issued a new notification, SRO 39(I)/2022 dated January 08, 2022, to establish fixed values for CNG.

These values are applicable from January 01, 2022, replacing the previous notification No. SRO 690(I)/2019 dated June 29, 2019.

According to the latest notification, the FBR has set the value of CNG at Rs134.57 for Region-I and Rs128.11 for Region-II. Region-I includes areas of Khyber Pakhtunkhwa, Baluchistan, and the Potohar Region (Rawalpindi, Islamabad, and Gujar Khan), while Region-II includes Sindh and Punjab, excluding the Potohar Region.

This development comes as a revision of the earlier SRO 1464(I)/2021 issued on November 15, 2021, wherein the FBR amended the values set by SRO 690(I)/2019. Under the revised values, the price of CNG increased significantly, jumping from Rs74.04 to Rs134.57 in Region-I and from Rs69.57 to Rs128.11 in Region-II.

The FBR emphasized that the new values specified in SRO 39(I)/2022 will take effect from January 01, 2022. This move is part of the government’s ongoing efforts to bring transparency and consistency to the taxation system, ensuring fair practices in the collection of sales tax from CNG consumers by gas transmission and distribution companies at CNG stations.

The FBR’s decision to fix the values aims to create a standardized and clear framework for the calculation of sales tax on CNG, providing a basis for more accurate financial transactions between gas companies and consumers. This measure is expected to benefit both consumers and the government by fostering a more transparent and accountable system.

It is worth noting that the revision in CNG values reflects the changing dynamics of the energy market and the need to align taxation with current economic conditions. The FBR has taken into account factors such as inflation, market fluctuations, and regional differences in determining the new values, ensuring a more equitable distribution of tax burdens.

As the government continues to implement reforms to enhance fiscal responsibility and promote economic stability, the FBR’s latest move regarding CNG values is seen as a step towards achieving these objectives. The stakeholders in the CNG industry, including consumers, gas companies, and regulatory bodies, are expected to adapt to the new values, fostering a more efficient and accountable taxation system in the country.