Revenue Board mulling CNG wastage revision

ISLAMABAD (January 04 2003) : The Central Board of Revenue (CBR) is seriously considering to revise the percentage of compressed natural gas (CNG) wastage at the CNG stations for determination of sales tax.

The All Pakistan CNG Station Association has asked the sales tax authorities not to make any downward revision in the CNG wastage percentage.

The CBR's move to examine the actual wastage would reduce the profit margin of the CNG industry. Contrary to this, the sales tax department is making all efforts to increase sales tax collection through determination of exact wastage of different industries, including CNG units.

In this regard, the representatives of the association and sales tax officials recently held a meeting in CBR.

The association was of the view that most of the CNG machinery installed in major cities is old and percentage of wastage has been calculated at 13 percent by the CBR sales tax auditors, Sui Northern Gas Pipelines Limited (SNGPL) and Hydro Carbon Development Institute of Pakistan. This percentage is applicable for the last 6-8 months.

The demand of CNG machinery/equipment globally has encouraged the use of old/used machinery, as the new equipment is not easily available, whereas, some of the new CNG stations of Karachi have installed new machinery/equipment where percentage of wastage may be less than 13 percent.

The wastage of CNG usually takes place at the time of compression, filling of CNG in the motor vehicles through use of old machinery and by using defective meters, which accumulates to 13 percent.

However, the CBR is pressing the association for surprise surveys of CNG stations to figure out the exact amount for levying sale tax.

The association has proposed to the authorities to work out separate percentage of wastage for CNG stations with new machinery.

They said that 13 percent is actual wastage rate and welcomed sales tax department to carry out physical verification of any CNG station except Karachi.

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