Income tax on CNG stations to be cut to 4 percent: CVT withdrawn on import of cars

The Central Board of Revenue (CBR) has decided to reduce income tax on compressed natural gas (CNG) stations from 6 percent to 4 percent, under Presumptive Tax Regime (PTR). Sources told Business Recorder on Monday that the CBR has proposed amendment in the Finance Bill 2007 following a meeting between tax authorities and All Pakistan CNG Association.
In this regard, APCNGA central chairman Tariq Kandan and Saman Khan and other representatives met senior CBR officials to discuss the levy of 6 percent income tax. The CBR officials agreed to amend the Finance Bill to bring down the tax rates from 6 percent to 4 percent under PTR. However, the APCNGA would not be able to claim credit in case of other withholdings under any other head. For example, they cannot claim credit on utility bills, vehicles and cash withdrawals from banks.
Under the proposed amendment in the Finance Bill, "the rate of tax to be collected under section 234A in the case of a compressed natural gas station shall be four per cent of the gas consumption charges."
It has been specified in the Finance Bill that there shall be collected advance tax at the rate specified in Division VII of Part IV of the First Schedule on the amount of gas bill of a CNG station. Sales tax leviable on supplies of CNG stations will be collected from gas distribution companies at the rate of 24 percent of value of supply as mentioned in Sales Tax Special Procedures 2007.
Collectors at Large Taxpayer Units (LTUs) Karachi and Lahore would co-ordinate with SSGC and SNGPL in this regard. In another major development, the CBR has abolished capital value tax (CVT) on the import of cars from June 18, 2007. A notification has been issued under the relevant provisions to withdraw the levy.