LAHORE: A customs appellate tribunal has upheld the recovery of a 10 per cent regulatory duty, amounting to billions of rupees, from six oil companies on the import of petrol (motor spirit) in 2022.

The two-member tribunal passed the order allowing departmental appeals against an order of the collector customs (appeals) in favour of the oil importers including Hascol Petroleum Ltd, Gas & Oil Pakistan Ltd, Taj Gasoline Ltd, My Petroleum (Pvt) Ltd, Puma Energy Pakistan Ltd and Euro Oil (Pvt) Ltd.

The oil companies claimed the benefit of an exemption from the regulatory duty under SRO 806(1)/2022 issued on June 20, 2022. However, the claimed benefit was denied to the companies because the federal government had imposed a 10pc duty on the import of petrol through the same SRO with the stipulation that the regulatory duty shall not be levied on cargoes for which LCs had already been opened or were at high seas.

The import of petrol, where customs duty at a rate of 10pc was paid, shall be exempted from the levy of the regulatory duty.

The scheme was time-specific and was applicable till June 30 2022 and ceased to exist with effect from July 1 when a newly issued SRO 966(1)/2022 came into the field.

However, the oil importers, upon being denied the exemption, filed petitions before the Sindh High Court and sought an extension of the benefit to imported goods, including petrol.

The SHC allowed the release of the imported goods provisionally by securing the disputed amount through pay orders or bank guarantees. Later, the high court dismissed the petitions in its final decision.

Published in Dawn, July 24th, 2024