FBR levies Rs4669/ton regulatory duty on LPG import

KARACHI: The Federal Board of Revenue (FBR) on Friday imposed regulatory duty on the import of liquefied petroleum gas (LPG) at the rate of Rs4,669 per ton to generate about Rs1.5 billion worth of revenue during the remaining months of current fiscal year.

The Economic Coordination Committee (ECC) of the cabinet in its meeting, held on November 28, had approved the aforementioned regulatory duty, which was implemented through SRO 1241 (I)/2017, issued by the FBR after amending SRO 1035(I)/2017 released on October 16, 2017.

According to an FBR summary sent to the ECC on November 23, the imposition of regulatory duty was requested by the ministry of energy.

It must be noted that the government had introduced a petroleum levy on locally-produced LPG at the rate of Rs4,669 per ton (about Rs7 per kilogramme). Thus, the ministry of energy had proposed that regulatory duty on the imported LPG shall be equivalent to the petroleum levy on the domestically produced/extracted commodity to provide a level playing field to importers and local producers.

The FBR said the LPG was currently exempted from customs duty and during fiscal year 2016-17, the total of 481,512 metric tons were imported and during current fiscal year July–October 2017, around 190,680 tons were sourced from overseas.

In order to maintain parity with locally produced LPG, the FBR had proposed regulatory duty at Rs4,669 per metric ton on import of LPG. “The estimated revenue impact of the measure during the remaining 7 months is Rs1.5 billion,” the FBR said.  

It further said the board, with the approval of federal minister in charge, had the power to levy the regulatory duty. “However, this power was challenged by various petitioners in the high courts of Sindh and Punjab,” the FBR said and requested the ECC to approve the proposal in principle.