Lahore: A single bench of Islamabad High Court has restrained the Government from charging 32 per cent General Sales Tax (GST) from CNG operators using a deceptive formula and directed authorities to charge 17 percent GST.
The All Pakistan CNG Association (APCNGA) and some other CNG operators had moved the court against the Government of Pakistan, OGRA, FBR, SNGPL and SSGC through Mr. Sultan Mazhar Sher Advocate against repressive taxation.
The petitioners pleaded that Supreme Court in December 2013 directed the government to recover 17 per cent GST from CNG operators which was never implemented; rather a misleading formula was adopted which increased the sales tax burden of CNG owners to 32 per cent.
This formula has resulted in huge losses to the CNG industry which was already facing many problems, the petitioners said.
After hearing the arguments, Mr. Justice Shaukat Aziz Siddiqui of the Islamabad High Court restrained the respondents from recovering sales tax at 32 per cent and directed them that sales tax shall be recovered at the rate of 17 per cent of the price of actual supply of gas to CNG stations till further orders.
Commenting on the development, leaders of the CNG sector Pervaiz Khan Khattak and Ghiyas Abdullah Paracha said that the decision of the Islamabad High Court has proved that the stance of APCNGA was justified.
The landmark decision has provided a great relief to the CNG industry reeling under suppressive taxation regime and it will help hundreds of CNG operators to avoid bankruptcy, said Khattak.