KARACHI - All Pakistan CNG Association Sindh Zone strongly protested against the notices served from SSGC to the CNG stations in Sindh for recovery of Rs4 billion within next 10 days on the levy of additional Sales Tax for the period April 2014 to date.
Addressing a press conference Chairman All Pakistan CNG Association Sindh Zone Shabbir Sulemanjee warned that if the FBR fails to listen to the stakeholders’ genuine issues, then all CNG stations in Sindh will be completely shut down after 10 days, resulting in the closure of the industry, Loss of revenue and loss of employment.
Flanked by other office bearers, he said that the Finance Ministry under the Pressure of IMF is trying to increase the tax burden on the industry that is already the prompt tax payers. They should rather concentrate on tax filers who are running businesses without being registered in the tax regime, he said, adding that CNG Industry is already under crisis through issues mainly resulting from the distorted price break up issued by the OGRA that is not provisioning the actual operating costs and is rather based on notional and hypothetical figures.
Shabbir Sulemanjee claimed that operating costs of the CNG stations has remain unchanged since almost more than 3 years whereas during this period there has been a substantial increase in the electric tariff, man power costs and many other operational costs that have been completely ignored by OGRA. With the current prices of Rs. 67.50 per Kg notified by OGRA that has been reduced by Rs 4 per kg w.e.f September 1st 2015, it has become extremely difficult for the CNG stations to survive and the exorbitant increase in the taxes from time to time.
Substantiating his argument, he said FBR amended the Section 3(8) of the Sales Tax Act 1990 through an Ordinance resulting an Impact of 34pc charged in the gas bills, in comparison to earlier 17pc charged on gas charges under Section 3(1) of the Sales Tax Act 1990. This Additional Tax will add a financial burden on the already paying taxpayers and would result in the closure of the CNG industry in Sindh.
He said earlier to 2008, the CNG industry was under the Normal Tax regime, Section 3(1) of the Sales Tax Act 1990 on which the 17pc of GST was charged in the gas bills on gas charges. This is the common practice in all trades and businesses including industries and manufacturing processes. After 2008, FBR imposed 26pc under Section 3(8) of the Sales Tax Act 1990 which was strike down by the Supreme Court of Pakistan on 10-12-2013 declaring the 26pc GST on CNG Stations as unconstitutional and therefore reverted back to the Normal Tax Regime, in which 17pc is charged in the gas bills on the value of gas charges.
Upon the directions of Supreme Court, the gas bills were properly generated on 17pc GST Deducted on gas charges up to three months after which the Government introduced the Amended Section 3(8) of the Sales Tax Act 1990 through an Ordinance on March 28th 2014.
Terming the levy of addition Sales Tax as a conspiracy aimed at sabotaging the CNG industry, he appealed to the Government to immediately constitute a committee based on the tax experts and the stakeholders from All Pakistan CNG Association to resolve this matter with mutual consent after hearing the grievances of the CNG industry. If the FBR fails to listen to the stakeholders’ genuine issues, then all CNG stations in Sindh will be completely shut down after 10 days, resulting in the closure of the industry, loss of revenue and loss of employment, the CNG Association warned.
Later the CNG stations owner staged a protest demonstration at Share Faisal.