December-June period: FBR estimates to generate Rs 1.5 billion thru RD on LPG

The Federal Board of Revenue (FBR) has estimated to generate around Rs 1.5 billion from the imposition of the regulatory duty at the rate of Rs 4,669 per MT on the import of Liquefied Petroleum Gas (LPG) during remaining seven months (December to June) of 2017-18.
Sources told Business Recorder here on Tuesday that the FBR has worked out the revenue impact on the basis of data available on the import figures of the LPG during 2016-17 and 2017-18. The RD would be imposed at the rate of Rs 4,669 per Metric ton on import of LPG falling under Pakistan Customs Tariff (PCT) heading 2711.1910. The estimated revenue impact of this revenue measure during the remaining seven months (December to June) comes to Rs 1.5 billion approximately.
The Finance Division has requested the FBR for imposition of Regulatory Duty (RD) on import of LPG. The FBR will issue a notification on the imposition of the RD on LPG. From the effective date of SRO, the RD would be applicable on the import of LPG. The RD to be imposed on LPG would be made part of the customs duty collection of the FBR in the remaining period of 2017-18, sources said.
The Ministry of Energy (Petroleum Division) has imposed Petroleum Levy for Sale of LPG produced/Extracted in Pakistan @ Rs 4.669 per Metric ton vide SRO(I)/2017 dated 2nd November, 2017. The Ministry has proposed that RD on imported LPG may be levied at the same rate so that a level playing field is provided to the importers and local producers.
Liquefied Petroleum Gas (LPG) classifiable under PCT code 2711.1910 is currently exempt from Customs Duty under Fifth Schedule to the Customs Act, 1969. During FY 2016-17, a total quantity of 481,512 MT and during current financial year (July-October, 2017) a quantity of 190,680 MT has been imported.
In order to maintain parity with locally produced LPG, it is proposed that RD @Rs 4669 per Metric ton may be levied on import of LPG (PCT code 2711.1910). The estimated revenue impact of the revenue measure during the remaining seven months (December to June) is Rs 1.5 billion approximately.
In terms of section 18(3) of the Customs Act 1969, the FBR with approval of Federal Minister-in-charge is empowered to levy RD. However, the said power has been challenged by various petitioners in the High Courts of Sindh and Lahore. Accordingly, as a matter of abundant caution, the FBR has used the forum of ECC to grant approval of imposing RD on the import of LPG.