Ball and chain: PHC stops SNGPL from severing gas connections of CNG pumps

Restrains company from collecting 32% GST in monthly bills.

Our Correspondent November 25, 2014

PESHAWAR: The Peshawar High Court on Tuesday reiterated its earlier order stating CNG filling stations should not be charged 32% GST in monthly bills and that no action in terms of severing gas connections be taken.

It also asked the company to issue reduced monthly bills to filling stations at the rate of 17% GST, as per its order of November 19, adding gas connections to CNG pumps should not be disconnected till further orders.

The short order was issued on a petition filed by the Khyber-Pakhtunkhwa chapter of the All Pakistan CNG Association. The case was being heard by the division bench of Chief Justice Mazhar Alam Miankhel and Justice Muhammad Younis Thaheem.

During the course of the hearing, Muhammad Yasir Khattak and Shumail Ahmad Butt, counsels for the petitioner, pointed out the court stayed the collection of GST at the rate of 32% from filling stations on November 19.

Yasir Khattak further stated that the SNGPL had failed to follow orders and was not providing reduced monthly bills at the rate of 17%. In addition, the company issued notices to disconnect the gas supply of filling stations as they failed to deposit their October dues.

The PHC division bench ordered that action such as the suspension of gas supply to the petitioner’s pumps could not be taken till the next court order. The respondents were also directed to provide the current bills to filling stations.

On November 19, the high court temporarily restrained SNGPL from collecting GST at more than 17% from CNG filling stations in the province. The court also extended the last date for payment of the bills for another three days. It issued notices to petroleum and natural resources secretary as well as the Oil and Gas Regulatory Authority chairman to submit their comments.

Around 450 CNG pumps filed the petition and named secretary petroleum and natural resources, OGRA chairman, Federal Board of Revenue chairman as well as the SNGPL managing director, Peshawar general manager and Abbottabad general manager as respondents.

During the previous hearing, Yasir Khattak told the court that the Supreme Court, in 2013, declared that GST collection at more than 17% was illegal and unconstitutional, but the government in its October 2014 monthly bill issued such taxes at 32%.

The petition further stated that the government added an additional sales tax rate of 9% to the 17% by virtue of section 3(8) of the Sales Tax Act 1990. The SC took notice of the increase and on December 10, 2013 ordered that the levy of extra tax at the rate of 9% could not be charged.

“Section 4 of the Finance Act 2014 is aimed at reintroducing the provisions of the Sales Tax (Amendment) Ordinance 2014 and [is] thereby causing illegal and [an] unconstitutional increase in the sales tax liability of the petitioner from 17% to 32% of the value of natural gas supplied to them,” the petition reads.

It further stated that on June 18, the SC issued a stay order and restrained the respondents from recovering GST at 32%. However, they were allowed to charge sales tax at 17% on the actual supply of gas till further orders.

“The government has, in a manipulative manner, increased the rate of sales tax for the petitioner by unfairly and unlawfully tampering with the formula for the calculation of the maximum sale price of CNG sold to the public. In this discriminatory manner, 32% sales tax has been imposed,” it reads.

Published in The Express Tribune, November 26th, 2014.


Replying to X

Comments are moderated and generally will be posted if they are on-topic and not abusive.

For more information, please see our Comments FAQ


Most Read