CNG sector decries 17pc GST on import

Published June 23, 2021
The government had earlier imposed 5pc GST on LNG import for the CNG sector whereas there was no GST for general and fertiliser industry. — Dawn/File
The government had earlier imposed 5pc GST on LNG import for the CNG sector whereas there was no GST for general and fertiliser industry. — Dawn/File

LAHORE: The business community on Tuesday expressed grave concerns over the imposition of 17 per cent General Sales Tax (GST) on the import of liquefied natural gas (LNG) and termed it an “anti-people” move which will make compressed natural gas (CNG) cost the same as petrol.

“We demand immediate withdrawal of 17pc GST imposed on the import of LNG. If our demand is not accepted, it will result in the closure of a number of CNG stations, waste of investment of Rs450 billion, fan unemployment, and trigger a decline in the revenue,” warned Federation of Pakistan Chambers of Commerce & Industry (FPCCI) Senior Vice President Khawaja Shahzeb Akram during a press conference. The FPCCI office bearer was accompanied by Central Chairman of All Pakistan CNG Association (APCNGA) Khalid Latif and and the association’s former chairman Ghiyas Paracha.

“The CNG sector had already suffered a loss of Rs100bn and the budget proposals will totally squeeze this business dry. New taxes and hike in imposed taxes would disintegrate the CNG sector and discourage investors from investing in Pakistan,” Mr Akram said.

In September 2020, the government had accorded permission to the private sector to independently import LNG. According to the APCNGA, the sector’s total demand is about 200 million cubic feet per day (mmcfd) which varies based on the season. The CNG sector’s current demand is almost 50mmcfd.

The government had earlier imposed 5pc GST on LNG import for the CNG sector whereas there was no GST for general and fertiliser industry. Besides this, the government had also imposed earlier a 5pc Customs Duty (CD) on LNG import in power sector, but it is also being charged from the CNG sector. The business community in its budget proposals had also asked the government to also abolish the 5pc CD since it has nothing to do with them.

The CNG sector has a total 3,400 gas stations/registered members, out of which 700 have closed business due to short supplies.

“The government is neither buying LNG on its own these days nor allowing us to import it despite the fact we already have the licence. As far as we know, the government will have no LNG cargo shipments in July and this may lead crisis in the industry,” Mr Paracha said.

Published in Dawn, July 23rd, 2021

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