Through the Finance Bill 2018, to waive the value addition tax @ 3% chargeable on import of LNG under Rule-58B of Sales Tax Special Procedure Rules, 2007, an amendment has been proposed in the tax laws.
The Finance Bill 2018 revealed that the reduced rate of 12 percent sales tax would be applicable on the import of LNG by M/s Pakistan State Oil and M/s Pakistan LNG Limited. The RLNG would be subjected to reduced rate of 12 percent sales tax if supplied by M/s Pakistan State Oil and M/s Pakistan LNG Limited to M/s SNGPL, as per Finance Bill 2018. According to sources, the reduction in the sales tax on LNG distribution companies from 17 to 12 percent would bring a sizeable relief to the LNG consumers.
So far the FBR has announced through the Finance Bill 2018 to provide reduced rate of sales tax @ 3% on all fertilizers across the board and reduced rate from 10% to 5% on supply of natural gas to fertilizer plants for use as feed stock. Moreover, rate of sales tax on LNG imported by fertilizer manufacturers for use as feed stock is also being exempted. Some more relief is expected for fertilizer companies in the winding-up speech of the Finance Minister, sources added.