ECC exempts LNG import from GIDC, 5pc GST

The Economic Coordination Committee (ECC) of the Cabinet which met here on Wednesday under the chair of Federal Minister for Finance Ishaq Dar approved exemption of LNG import from GIDC.

The proposal was submitted by the ministry of petroleum and natural resources. It was, however, decided that 5 per cent GST on LNG import would be levied in any case. The finance minister said: “the decision is taken with a view to facilitate the general public and encourage investment in the sector.”

“We cannot allow total exemption from general sales tax because we want to promote tax culture in Pakistan. If the business is thriving, there is no harm in contributing a small percentage to the exchequer,” Dar said.

The ECC considered and approved a proposal moved by the Cabinet Division for amendment in the OGRA Ordinance 2002 to monitor/establish prices of all refined oil products in the country after the law, justice and human rights division’s comment that the proposed draft bill was in order and recommended to place it before the CCI.

A committee under the chairmanship of Minister for Science and Technology Zahid Hamid examined the issue holistically before the proposal was submitted seeking final approval from the ECC. The amendments are made in the rules guiding (a) Oil sector regulations which include monitoring the prices of petroleum products in the market and definition of petroleum products including CNG. Also the power and function of authority as well as role of the federal government in determining the well-head gas prices, including imported gases in the pricing of natural gas, and power to determine prices without public hearing under certain conditions are specified. It also deals with imposition of fines and penalties, and determining and notifying the maximum sale prices of CNG to be charged by a licensee from a consumer for vehicular use – (b) strengthening the administrative functions of OGRA.

On the proposal moved by the finance division to give permission to Packages Limited for equity investment abroad through a special purpose vehicle in Mauritius with initial remittance of USD 100,000, the ECC accorded approval with the clear instruction that the equity/investment would not exceed USD 15million.

The ECC also gave consent to the proposal by the ministry of industries and production for directing Trading Corporation of Pakistan to ensure procurement of 0.185 million tons of urea fertilizer under SABIC facility by December 15t, 2014, for the upcoming Rabi crop. The balance quantity of 0.385 million tons may be imported as soon as possible from open international market. The foreign exchange required for the import of the stock will be approximately around $123.92 million and would involve Rs 4.19 billion of subsidy.

The ECC disposed of a proposal moved by the ministry of petroleum and natural resources regarding gas pipeline infrastructure development plan in the wake of LNG imports and anticipated indigenous supplies asking the OGRA and the ministry of petroleum and natural resources to mutually take a decision on going ahead with the development plan within a week.

On a proposal from the ministry of ports the shipping, the ECC allowed Port Qasim Authority (PQA) to buy or lease four LNG compatible Tug Boats from its own resources while also according permission for their commercial usage on cost recovery basis with the direction that these boats should also be used for other purposes.

The chair also directed that the boats should be made available before January 7, 2015, as LNG shipments would be due by that point in time. The charges for boat services would be mutually decided by the PQA, ministry of port and shipping and the ministry of P&NR, the ECC further directed. It shall meet again today for considering some other important agenda items.