FBR expects huge sales tax collection from CNG stations

KARACHI: The Federal Board of Revenue (FBR) expects to collect substantial amount of sales tax after the Sindh High Court dismissed the appeal filed by CNG station owners.
Officials in the FBR said on Wednesday that the case was on stay for a long time, but a day earlier, the court dismissed the appeal giving favour to the tax authorities to collect the amount.
The CNG sector filed the appeal in 2014 against change in formula of sales tax for the CNG sector. An FBR official said there had been a stay on the case proceedings for a long period. The court has ordered the CNG stations to pay the disputed amount to the Nazir of the court, the official added.
The CNG stations had moved the court following the amendments notified on March 23, 2014 through presidential order by promulgating Sales Tax Amendment Ordinance, 2014.
As per the ordinance, the rate of sales tax was imposed at 17 percent, covering net ‘value addition’ tax on (CNG stations on the basis of sale price fixed by Ogra. However, CNG Associations rejected the formula on objection that the move would increase the CNG prices, as government imposed additional 17 percent tax on the stations.
Shabbir Sulemanjii, chairman, APCNGA (Sindh) has said that the court order would be challenged in the apex court. He said the different rates for CNG stations would force the sector to close down the business.