A single member bench of Islamabad High Court has restrained the government from charging 32 percent General Sales Tax (GST) from CNG operators and directed the 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 Advocate Sultan Mazhar Sher Advocate against taxation.
The petitioners pleaded that the Supreme Court had directed the government in December 2013 to recover 17 percent 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 percent.
This formula has resulted in huge losses to the CNG industry which was already facing many problems, the petitioners said.
After hearing the arguments, Justice Shaukat Aziz Siddiqui of the IHC restrained the respondents from recovering sales tax at 32 percent 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 IHC has proved that the stance of APCNGA was justified.