November 13, 2002	Wednesday	Ramazan 7, 1423

ISLAMABAD, Nov 12: The federal government has extended the exemption of customs duty and general sale tax (GST) for yet another five years on import of compressed natural gas (CNG) cylinder, kits and other machinery.

The decision was taken in the Economic Coordination Committee (ECC) meeting last week following the repeated demands of the CNG traders, said an official source on Tuesday.

The facility was earlier available till October 31, 2002, from November 1, 1997, to the CNG companies to import machinery, equipment on conversion kits and cylinders without the payment of whole customs duty and sales tax on it.

The facility has now been extended to October 2007 aimed at promoting the industry.

The official said the Ministry of Petroleum in its summary claimed that in case the exemption was granted then it was estimated that around Rs40 billion investment would be made in this sector in the next three years.

Elaborating further, the official said that it was also calculated that with the withdrawal of the exemption the net revenue from the levy on CNG related equipment would be around Rs90 million annually.

On the other hand, it was also estimated that in the next three years around 400 CNG stations would be installed across the country, said the official, adding that as GST was leviable on CNG, therefore, it was calculated that the revenue generated from it would be around Rs290 million annually.

The official said that as Pakistan was signatory to Koyoto convention, which asked for environment-friendly fuel, therefore, the donors also accepted the case for further duty exemptions. Furthermore, it would also help in creating job opportunities, said the official.

The tax authorities, however, were adamant to extend the exemption date as according to the commitment made with the International Monetary Fund that all time bound exemptions would be lapsed without further extension. They rather proposed reduction on import of all these items in order to give some relief to the dealers.

The official said the ECC had turned down the CBR request asking for reduction instead of seeking exemption of customs duty and sales tax on the import of the same products.

Our Staff Reporter adds from Karachi: The Central Board of Revenue will issue a notification in a couple of days regarding the extension of duty exemption on import of CNG equipment for another five years.

This was stated by chairman, CNG Station Owners Association of Pakistan, Malik Khuda Bux in a statement issued on Tuesday.

He said that a meeting of ECC, held last week, had approved the extension of exemption and directed the CBR to issue the SRO.

Meanwhile, CNG Dealers Association, Abdul Sami Khan has also said that the government has allowed the exemptions of duty on kits, cylinders and equipment for another five years.

Malik said that the decision will help bring potential investment of about Rs5 billion into this sector and also pave way for further investment.

According to his estimates, a total of 330 CNG stations have so far been set up in the private sector with an estimated investment of Rs4.5 billion. The CNG stations provide jobs to more than 10,000 workers.

He said licences had been issued for the setting up of 400 stations. More than 300,000 vehicles have already been converted to CNG and the figures are fast increasing every day.