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Tax dept longs for Rs4.1bln unpaid sales tax

KARACHI: A tax department is longing for its unpaid Rs4.1 billion in lieu of a levy imposed on gas supply to the compressed natural gas (CNG) stations across the city, yet the gas utility contested this, sources said on Wednesday. Early last month, the Sindh High Court (SHC) stayed

By Shahnawaz Akhter
November 05, 2015
KARACHI: A tax department is longing for its unpaid Rs4.1 billion in lieu of a levy imposed on gas supply to the compressed natural gas (CNG) stations across the city, yet the gas utility contested this, sources said on Wednesday.
Early last month, the Sindh High Court (SHC) stayed the recovery till 5 November.
The CNG stations had moved the SHC following the amendments notified on March 23, 2014 through a presidential order 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 the Oil and Gas Regulatory Authority.
However, CNG associations rejected the formula, saying the move would increase the CNG prices, as government slapped additional 17 percent tax on the stations.
After the settlement of this case, the Large Taxpayers Unit (LTU) Karachi issued notices to the Sui Southern Gas Company (SSGC) to pay the balanced amount of Rs4.1 billion out of the total Rs9 billion. The remaining amount was defrayed.
LTU Karachi sources said the bank accounts of the utility were attached on October 29 upon its non-compliance. The utility, however, denied any such attachment.
The sources said since the Sui Southern Gas Company is a withholding agent, collecting sales tax and income tax on behalf of the FBR, it is responsible for making payment to the tax authorities just like all the gas and electricity utilities in the country.
They said SSGC was to deduct the tax from the monthly bills of CNG stations.
The sources said that during the proceeding on the petition of CNG stations the court ordered the payment of the differential amount to Nazir of the court.
The tax department’s sources said the amount deposited with Nazir, however, was negligible – less than Rs100 million.
A SSGC’s spokesmen said the utility has already clarified its position on the issue as the disputed/remaining amount claimed by the LTU was never deposited with the SSGC but with Nazir as per the court’s specific interim order.
“In light of the above submission, it is evident that the Sui Southern Gas Company is not liable to collect the disputed amount after the judgment passed by the court, dismissing 43 petitions on the subject,” the spokesman said.