ISLAMABAD: The National Assembly Standing Committee on Finance Friday unanimously passed two 'Money Bills' envisaging additional revenue measures of Rs 38 billion in the current fiscal year by imposing Gas Infrastructure Development Cess and Petroleum Levy on Liquefied Petroleum Gas (LPG).
The meeting of the committee, held with Fauzia Wahab in the chair, unanimously approved the proposed legislation after briefing by the Minister for Petroleum and Natural Resources Dr Asim Hussain that imposition of proposed taxes is essential to reduce the price of LPG and for development of gas infrastructure in the country. The government has estimated Rs 34.390 billion collection on account of Cess tax from various sectors during the on-going fiscal year and Rs 4 billion from Petroleum Levy.
The revenue collection on account of Cess tax included Rs 11.10 billion from fertiliser sector, Rs 11 .87 billion from CNG stations with 6.10 billion from CNG stations in Region-I and Rs 5.77 billion from CNG stations in Region-II. An amount of Rs 4.62 billion collection has been estimated from Industrial Sector, Rs 5.88 billion from IPPs, Rs 0.430 billion from Mari Gas Company Limited (MGCL) and Rs 0.460 billion from Pakistan Petroleum Limited (PPL) during the current fiscal year through Cess tax.
Petroleum Products (Petroleum Levy) amendment Bill 2011and Gas Infrastructure Development Cess Bill 2011 has already been cleared by the Upper House and are expected to the approved from the National Assembly in the current session to go for implementation. The Secretary Finance Dr Waqar Masood said that Ministry of Finance does not agree to the Senate committee's proposal to include schedule-II in the legislation with the objective to specify Cess rate.
The committee members wanted that there should be some kind of restriction in the legislation so that the amount collected by imposing Cess for development of infrastructure is not used for other purposes. The law also proposed 4 percent penalty in addition to average KIBOR of three month on the companies that would fail to deposit the collected amount to the government.
Minister for Petroleum and Natural Resources Dr Asim Hussain said that the power cartels operation in the LPG sector has been making windfall profit and proposed LPG levy would help remove distortion between price of local and imported LPG. He said that LPG would not be imposed on consumers and collected from the companies.
He said that government was exploring all options to remove discrepancies in LPG quotas. He said that the government required Rs 100 billion each for infrastructure development for Iran Pakistan gas pipeline (IP) and LNG pipeline from Karachi to Lahore and no one was ready to give loan of such a huge amount.
He said that the best option was to get the required funding by imposing tax because loan cost would increase the price of gas to be subsequently passed on to the consumers. He said that Gas Infrastructure Development Cess would be collected from the companies and would have no impact on the consumers.