ECC dismisses offer for 50% sales taxation on gas supply
ISLAMABAD: The Economic Coordination Committee (ECC) of a cupboard has incited down a offer to boost ubiquitous sales taxation by 33 commission points on gas sales to a absolute industrial lobby.
The ECC took a preference after deliberation proposals of a Ministry of Petroleum and Natural Resources in a assembly hold on Nov 25, officials said.
The method suggested a rebate in a gas sale cost yet during a same time advocated a aloft sales taxation during 50% compared to existent 17% for industrial consumers.
The gas cost cut was also due for serf energy plants of a industrial sector, yet they were receiving gas during a cost of energy producers. Earlier, a National Accountability Bureau (NAB) had investigated a matter and described as rapist act a gas supply to serf energy plants by denying a fuel to energy producers that were forced to close down.
The petroleum method insisted that in a stream sourroundings of neatly reduce oil prices, there was a clever justification for providing some service to a industrial sector, that was apropos uncompetitive in a general market, ensuing in detriment of trade earnings.
Accordingly, it said, a gas cost for industries and serf energy plants might be reduced from Rs600 per million British thermal units (mmbtu) to Rs400 per mmbtu. It also endorsed that in suitability with a Fertiliser Policy 2001, a industrial gas cost should also be germane to a gas fuel for fertilizer plants.
However, a method pronounced a stream 17% sales taxation amounting to Rs102 per mmbtu might be increasing to Rs200 or 50%.
At that time, industrial consumers were profitable Rs702 per mmbtu comprising gas cost of Rs600 and sales taxation of Rs102.
The method due gas supply during Rs600 per mmbtu including Rs400 as a gas cost and Rs200 as sales tax. Under this plan, a industrial consumers would suffer a service of Rs102 per mmbtu.
However, a ECC discharged a recommendation and bound sales taxation during a reduce turn during Rs100 per mmbtu.
Separately, a petroleum method told a ECC that a dual gas utilities – Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company (SSGC) – were purchasing gas from hydrocarbon scrutiny and prolongation companies and transmitting and distributing gas to opposite forms of consumers.
They were using their operations on a regulation of cost-plus-return on resources in line with a licences postulated by a Oil and Gas Regulatory Authority (Ogra).
The method argued that SNGPL’s income shortfall in a before year was a outcome of rejection of boost in gas sale prices due to several reasons including lawsuit in court, some check by Ogra in integrity of a income requirement and amicable and mercantile considerations.
However, but a boost in gas prices, a income shortfall of Rs51 billion was approaching to come down to Rs37 billion by a finish of a year.
Published in The Express Tribune, Dec 7th, 2016.
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