The Federal Board of Revenue (FBR) has issued SRO 587(I)/2022 dated May 10, 2022, announcing an increase in the valuation of Compressed Natural Gas (CNG) for the purpose of charging sales tax on sales to consumers.
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SSGC restores supply to CNG stations ahead schedule
KARACHI: Sui Southern Gas Company (SSGC) on Friday announced to restore gas supply to CNG Stations from February 14, 2022, a day ahead for scheduled restoration.
“The gas supply will be restored to CNG stations based on RLNG from February 14, 2022,” Salman Ahmed Siddiqui, Head of Corporate Communications, and spokesman SSGC said.
READ MORE: Industry protests against gas shortage at SSGC
As per gas management plan the gas supply was remained suspended since December 01, 2021 and was to be restored on February 15, 2022. “The gas supply will be restored ahead of scheduled time to those CNG stations, which are using RLNG,” the spokesman added.
READ MORE: PM appealed restoring gas to Karachi industrial zones
The Senior vice chairman of the All Pakistan CNG Association (APCNA), Central, Shoaib Khanjee said that the gas is being restored after two and a half months. “We hope gas stations will not be closed due to gas shortage,” he added.
READ MORE: PHMA cries foul on gas suspension to textile industry
He said that the industry had suffered immense losses due to the gas suspension. He appealed the government to provide subsidy to the industry. He also appealed the government to take stern action against those who involved in sabotage of the industry.
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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.
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CNG valuation up by 84% for sales tax collection
The Federal Board of Revenue (FBR) in Pakistan has declared a substantial 84% increase in the valuation of Compressed Natural Gas (CNG) for the purpose of sales tax collection.
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FPCCI demands withdrawal increase in duty, taxes on CNG sector
KARACHI: Federation of Pakistan Chambers of Commerce and Industry (FPCCI) on Monday demanded the government of withdraw its decision of increasing duty and taxes on CNG sector.
In a statement FPCCI President Mian Nasser Hyatt Maggo said that the sales tax on LNG for CNG sector has been increased from 5 per cent to 17 per cent – while customs duty of 5 per cent has also been imposed. “Given that CNG is expensive and the survival of this business is in jeopardy. This decision should be reversed immediately,” he demanded.
He said that the gas crisis is caused by poor management, bad decision-making, and lack of vision. After Sindh, gas is being cut off across the country; which is unacceptable. This will cause huge losses to the business community and the public alike; affecting businesses and reducing production and exports.
Addressing an emergency press conference, FPCCI’s President said that the entire country was in the grip of energy crisis due to the badly-timed import of LNG and CNG sector.
It was the worst time to go for yearly repair and maintenance of the LNG terminal. As a result, it has been decided to generate electricity from furnace oil; which is an expensive option.
The government neither imports gas itself; nor allows the CNG sector to import – which is out of sound mind.
Ghiyas Abdullah Paracha – Group Leader, All Pakistan CNG Association – said that the policies of the energy sector were not in line with the ground realities. The crisis will continue until the CNG sector is allowed to import its own gas. Gas companies are destroying people’s businesses and taking away jobs. If we import our own gas, the load shedding will end and the government will generate Rs. 82 billion; but, this is not acceptable to a few bureaucrats. He further added that the CNG sector in Punjab and Sindh is using imported gas; so, it has nothing to do with the reduction in domestic gas production; nor does it have any justification to cut off gas.
Khalid Latif – Chairman, All Pakistan CNG Association – said that Rs. 450 billion have been invested in the CNG sector; but, the future is bleak. Hundreds of thousands of workers have been displaced from the CNG sector; but, they have been brought to the brink of disaster.
FPCCI demanded that the government should take steps to rehabilitate the sector by revoking the decision to impose additional taxes and ensuring the availability of environmentally friendly and cheap fuel to the people; so that, pollution and fares do not increase and millions of jobs can be saved.
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FBR increases up to 28.34 percent retail value of CNG for sales tax collection
ISLAMABAD: Federal Board of Revenue (FBR) has enhanced the consumer value of CNG by 28.34 percent for collection of sales tax from July 01, 2019.
The FBR issued SRO 690(I)/2019 to notify the consumer value of CNG for the purpose of charging of sales tax from CNG stations by gas transmission and distribution companies.
The FBR increased the consumer value of CNG to Rs69.57 per kilogram for Region-I, which included Khyber Pakhtunkhwa, Baluchsitan and Potohar Region (Rawalpindi, Islamabad, and Gujar Khan. The increase in consumer value is around 7.36 percent for this region as compared with the previous rate of Rs64.80 per kilogram.
However, the FBR increased the consumer value of CNG by 28.34 percent for Region – II to Rs74.04 per kilogram from Rs57.69 per kilogram.
The Region – II is included: Sindh and Punjab excluding Potohar Region.
Large Taxpayers Unit (LTU) Karachi two years back presented a draft amendment, which stated:
“Notification in exercise of powers under subsection (8) of section 3 for value of supply of CNG to CNG consumers as per prevailing market price in the same way as it is being issued in case of sale of petroleum product every month.
“Board [FBR] may kindly issue the notification in exercise of powers under subsection (8) of section 3 for value of supply of CNG to CNG consumers as per prevailing market price in the same way as it is being issued in case of sale of petroleum products to avoid huge loss of monthly sales tax revenue.”
The LTU Karachi said that the Gas Transmission and Distribution Company charges sales tax from CNG stations @ 17 percent of the value of supply to the CNG consumers as notified by the Board from time to time in terms of section 3(8) of the Sales Tax Act, 1990.
Board accordingly vide its SRO No. 236(I)/2014 dated 31-03-2014, had notified the value of supply to the CNG consumers as the total value added cost of CNG as notified by the OGRA.
The latest notification issued by OGRA is dated 31.08.2015 which fixed the maximum CNG price as follows:
Region Value Added Cost GST @ 17%
Maximum CNG Sale Price
I 64.80 11.02 Rs. 75.82 II 57.69 9.81 Rs. 67.50 On 21-12-2016, OGRA deregulated the CNG sector in Pakistan, and directed the CNG station operators/associations to fix the rates themselves, as per market demand.
This caused in an instant increase in the rates of CNG which jumped from Rs. 67.50 per kg in the Southern Region to Rs.79 overnight.
However, the Gas distribution companies are charging sales tax on the previously issued notification of OGRA dated 31-08-2015.
As a result, the CNG stations are collecting sales tax on maximum CNG sales price at Rs79 per kg from the end consumers where as the Government is getting sales tax from the Gas distribution companies on maximum retail price at Rs67.50, incurring a loss of sales tax revenue of Rs1.67 per kg.
This loss of sales tax revenue of Rs.1.67 per kg is being collected from end consumers and pocketed by CNG stations.
CNG retail price per kg on which SSGC is collecting GST (Rs.) GST @ 17%(Rs) CNG prevailing market retail price (Rs) GST @ 17% (Rs) Loss in sales tax revenue per kg(Rs) 67.50 9.81 79.00 11.48 1.67 The per month loss to the government revenue comes to be Rs75 million only in the case of SSGCL as the average monthly sale of Gas to the CNG stations by SSGCL is 50 million kgs of gas.
Similarly the loss in case of SNGPL which caters more than three times of CNG stations is fairly high.
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CNG stations to remain closed for further 24 hours
KARACHI – Sui Southern Gas Company (SSGC) announced on Friday that Compressed Natural Gas (CNG) stations will remain closed for an additional 24 hours as part of gas load management.
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