Businesses want at par GST on local gas and RLNG in budget

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A number of businesses have approached the government to equalise the sales tax on the natural gas in the federal budget for the next fiscal year, as the concessional general sales tax of 5 per cent imposed on the imported liquefied natural gas (LNG) is affecting industries paying 17 per cent sales tax on the supply of local natural gas.

An official source said the GST on RLNG was kept at 5 per cent to lure the independent power producers and industries in Punjab to buy imported gas instead of the furnace oil. However, he said that the price of furnace oil has fallen below the local gas price and industrialists have abstained from entering agreements for LNG.

The supply of RLNG in the Sui gas companies network has created another problem for them as their system is flowing at maximum gas pressure with no new users. The failure to timely market RLNG supplies led Sui Northern to shut down its domestic gas purchases. The companies approached the government against the non-professional manner their supplies were shut down which were eventually restored after the removal of the acting MD of the company who failed to find new users, the source added.

Industrials in Sindh are concerned as RLNG is mainly supplied in Sindh. Their argument is that the province’s gas is being supplied to Punjab and they are offered concessional GST on RLNG.

They are demanding removal of the anomaly, by giving them concessional GST too or an equal sales tax should be imposed all over the country.

So far the government has not given any commitment, the source said, adding that some of the businesses have approached the political parties on the issue. The issue is likely to become a political one if the government does not give an assurance to settle the issue.