The Federal Board of Revenue (FBR) is likely to approach Sui Northern Gas Pipeline (SNGPL) and Sui Southern Gas Company (SSGC) to ensure that the National Tax Numbers (NTNs) and the Sales Tax Registration Numbers (STRNs) of CNG stations are mentioned on their monthly gas consumption bills for documentation and proper credit of tax collected at source.
Sources told Business Recorder here on Monday that the FBR is seriously reviewing proposals of its tax consultants to improve documentation of the CNG sector. According to Board tax advisors, all CNG stations are NTN holders as well as registered under the Sales Tax Act 1990.
If all CNG stations are registered under the Sales Tax Act, 1990 then SNGPL and SSGC are issuing sales tax invoice with their respective sales tax registration number (STRN) and all STRN are linked with NTN. In order to ensure proper collection of tax from the CNG stations, there is a need for the enforcement by SNGPL and SSGC.
Sources said that if all CNG Stations are not registered under the Sales Tax Act, 1990, then the only issue is of recording NTN of CNG Stations by SNGPL and SSGC in their billing database for documentation purposes. It has been recommended to enforce, recording of NTN of CNG Stations by SNGPL and SSGC in their billing database with the intervention of Ministry of Finance and Ministry of Petroleum and Natural Resources.
When contacted, a tax expert said that under section 234A of the Income Tax Ordinance 2001, the gas distribution companies are required to collect tax with the gas bills. It is a revived provision and mechanism has to be developed to utilise the information for proper assessment of taxes.
The tax department needs to develop formula for determining the income of the CNG stations. The collection of tax from this source is easy, the number of authorised persons being few. However, there is a problem in proper utilisation of information. At the same time, the SNGPL and the SSGC can easily ensure that the CNG stations are mentioning NTNs/STRNs on their monthly gas consumption bills, the tax expert added.
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