CNG lobby contests legal status of gas cess

Says they are forced to pay tax <br /> at higher rate.

ISLAMABAD: Owners of compressed natural gas (CNG) filling stations have questioned the legal status of Gas Infrastructure Development Cess (GIDC) imposed by the government on gas-consuming sectors.

“The government is collecting billions in GIDC from the CNG and other gas-consuming sectors, citing that the money will be spent on Pak-Iran gas pipeline,” said the All Pakistan CNG Association in a statement on Wednesday.

“However, top state officials have said time and again the pipeline project is difficult to execute due to international pressure.” How the government could collect billions of rupees from commercial sectors to support a stalled project without considering that GIDC had increased the cost of doing business and pushed up inflation, asked the association’s Supreme Council Chairman, Ghiyas Abdullah Paracha.

He pointed out that all gas-consuming sectors were paying GIDC at Rs100 per million British thermal units (mmbtu), but CNG stations were paying Rs200 per unit, terming it discrimination.

In the federal budget for the upcoming fiscal year, Paracha said, the government increased GIDC to Rs300 per mmbtu on all sectors except for domestic consumers. However, after fierce resistance from the business community, the cess was either kept unchanged at Rs100 or increased to Rs150 for some industries.

This time too, he said, the CNG station operators were discriminated against as they would still have to pay Rs300 per mmbtu, which could impact prices of the fuel, which serves as an alternative to petrol. Paracha added that government officials had been contacted time and again to resolve the pricing and tax issues, but to no avail.

Published in The Express Tribune, June 19^th, 2014.

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