Chairman Federal Board of Revenue (FBR) Tariq Bajwa on Wednesday said the government was charging 17 percent sales tax on supply of CNG to consumers. He informed the Senate Standing Committee of Finance here on Wednesday that the government was charging supply of CNG at the general sales tax rate of 17% of value of supply of CNG to consumers instead of charging tax @17% on purchase of gas by a CNG station and an extra sales tax of 9% to cover the value addition. Thus, the government has eliminated discrimination between the rates of sales tax on supply of CNG and other products, Bajwa added.
During the meeting, Law and Justice Division observed that the President promulgated Sales Tax (Amendment) Ordinance 2014 on applicability of sales tax on CNG stations, which was equivalent to a legislation carried out by the Parliament. A representative of the Law and Justice Division shed light on the importance of the Sales Tax (Amendment) Ordinance 2014 which is at present in vogue. The official of Law Division further read out certain paragraphs of the judgement of the Supreme Court of Pakistan relating to the sales tax on CNG.
Responding to the legality of the Sales Tax (Amendment) Bill 2014, FBR Chairman Tariq Bajwa said the Sales Tax (Amendment) Bill 2014 “is a money bill”. The money bill has been presented in the Parliament for consideration by the National Assembly and Senate, according to him.
Referring to the Article 73 of Constitution, Law Division’s representative informed the committee that a “Money Bill shall originate in the National Assembly: Provided that simultaneously when a Money Bill, including the Finance Bill containing the Annual Budget Statement, is presented in the National Assembly, a copy thereof shall be transmitted to the Senate which may, within fourteen days, make recommendations thereon to the National Assembly. The National Assembly shall consider the recommendations of the Senate and after the Bill has been passed by the Assembly with or without incorporating the recommendations of the Senate, it shall be presented to the President for assent.”