Islamabad - The Senate sub-committee was informed on Thursday that the CNG stations in Punjab were being charged 5 percent of the General Sales Tax (GST), while 17 percent tax was being collected from the gas stations in other provinces.
The committee met here at the Cabinet Secretariat, under the chairmanship of Senator Shahi Syed. The meeting was also attended by Kalsoom Parveen, Mir Muhammad Yousaf Badini and other senators.
The Sui Northern Gas Pipeline Limited (SNGPL) official informed the committee that the tax was being collected on the orders of the FBR and OGRA.
He further said that Punjab was being supplied LNG, while the other provinces the natural gas. “Natural gas is cheaper, while LNG is expensive, and this is the reason that 5 percent of the tax is being collected from the gas stations of Punjab,” he added.
Shahi Syed questioned the logic of LNG’s supply only to Punjab, saying that other provinces were also part of Pakistan, and they should also be supplied this gas. To this, the official replied that Punjab had a big population, and resultantly there the gas demand was higher; that’s why LNG was being supplied to the province.
OGRA Chairman Saeed Ahmad Khan said that the rates of LNG would be determined next week. “A formula will determine the prices of all the cargos that arrived here since March 2015 up till February 2016,” he informed the committee.
He said that the authority would determine the average price of LNG gas after evaluation of the number of ships in a month, in accordance with the prescribed formula.
The committee was informed that the price of local gas was Rs 887 while that of LNG Rs 1, 213. The committee termed double taxation on the CNG sector a gross injustice, which had caused billion of rupees loss to the sector.
The committee directed the Ministry of Petroleum to hold meeting with All Pakistan CNG Association to address the problems of CNG stations’ owners.
It was also decided that the sub-committee would give its recommendations to the Standing Committee on double taxation.
The representatives of CNG Association informed the committee that there were 3,600 CNG stations across the country, while 75 percent gas was being consumed in Punjab. “The CNG sector suffered a loss of Rs. 78 billion during three-and-a-half years, due to pricing issues,” the representatives claimed. They also appealed to the committee to ensure a third party audit of association’s claims about the extra tax collection from the CNG sector.
The official of the FBR, however, rejected that the CNG stations were being double taxed. He alleged that out of total 3,600 CNG owners, only 600 were regularly filing their tax returns.
The official of OGRA gave a briefing on the CNG prices and the Sales Tax. He said that for Zone-I, the price of CNG was Rs35.17, while OGRA charged Rs 13.24 per kilo
He said that the authority had notified Rs. 75.82 against per kg CNG for Zone-1. Regarding Zone-II, it was informed that the price was Rs. 67.50 per kg. He also said that there was no double taxation as far as the CNG sector was concerned.
The OGRA official also rejected the report regarding 50 percent gas price hike from January 1, 2016 by OGRA, and said there was no such advice by the federal government to OGRA.