Petroleum Division has proposed to the federal cabinet to revise petroleum levy (PL) on local LPG downward to Rs 2500/MT as opposed to the Rs 20000/MT (Rs 17,500/MT) approved in the Finance Bill 2018 to meet the revenue target of Rs 2 billion set for financial year 2018-19.
Documents available with Business Recorder reveal that the Finance Division conveyed budget estimates for financial year 2017-18 in respect of PL on LPG amounting to Rs 2 billion which was achieved. The Division again set the target of Rs 2 billion PL on LPG for the financial year 2018-19 which has been approved by parliament under the Finance Act 2018.
The rate of levy was computed previously by dividing the target amount with the locally produced volume of LPG for the remaining 8 months period of financial year 2016-17 at the per metric ton rate of Rs 4669/MT.
In order to recover the revenue target of Rs 2 billion approved by Parliament under Finance Act 2018 in respect of PL on LPG, rate of PL Rs 2500/MT has been computed on the basis of locally produced volume of 2017-18. The rate so computed is below the maximum rate of PL on LPG, i.e, Rs 20,000/MT revised by parliament under Finance Act 2018.
In order to meet the approved revenue target amounting to Rs 2 billion for financial year 2018-19, PL at the rate of Rs 2500/MT is required to be notified immediately. However, Law and Justice Division has refused to approve the draft notification.
Law and Justice Division returned the draft notification to Petroleum Division with directive to reconsider the matter including obtaining approval of the federal government meaning the cabinet in respect of the rate of recovery of the PL as proposed in the draft notification.