ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet meeting, presided over by Federal Finance Minister Ishaq Dar, has imposed 17 per cent general sales tax (GST) on liquefied natural gas (LNG) and other imported gas.
The ECC meeting also exempted the LNG terminal operator from income tax for five years and decided to tax floating storage and regasification unit (FSRU) to a five per cent import duty, allocated 325mmcfd LNG to independent power plants and allowed extension in deadline for export of 650,000 tonnes of sugar to July 15. The meeting also extended 20-year tax exemption to Gwadar Port for three more years to 23 years.
Federal Board of Revenue (FBR), over exemption of taxes and duties on gas import pipeline and LNG, described that all imported fuels were paying requisite taxes while locally produced natural gas was also subject to 17pc GST. It was, therefore, decided that LNG and imported gas shall be treated like any other imported fuel and taxes as applicable shall be paid.
The Economic Coordination Committee (ECC) of the Cabinet meeting also allocated 325mmcfd of LNG to IPPs which will be enhanced to 400mmcfd by the end of the year. The enhanced volumes would be allocated to Rousch Power after its ratification by the Cabinet committee on energy, led by the prime minister. The IPPs, to be provided LNG in the first phase, include Saif, Sapphire, Orient and Halmore, Kot Addu.
Under another proposal regarding exemption of customs duty and sales tax on lease of FSRU, the petroleum ministry contended that FSRU was a new concept in Pakistan. It received, stored and regasified LNG for onward supply and as such it should be considered as plant and machinery of a floating LNG terminal.
The committee agreed with this point of view and advised the FBR to consider it as plant and machinery in the existing SRO, which meant FSRU to be subjected to 5pc customs duty.
