A major facility of refund of excess unadjusted input tax related to supplies, other than zero-rated, would not be applicable to the CNG stations. In this regard, the FBR has issued instructions to Large Taxpayer Units (LTUs) and Regional Tax Offices (RTOs).
Sources told Business Recorder here on Saturday that the FBR had allowed the gas transmission and distribution companies refund of excess input tax not related to zero-rated supplies. The decision was announced through SRO.748(I)/2010. Through this notification, the refund of excess unadjusted input tax relating to supplies other than zero-rated shall be claimed and sanctioned in the cases of gas transmission and distribution companies, manufacturers of fertilisers, electric power producers and electric power distribution companies may claim refund of excess input tax over output tax in any tax period. If these categories of taxpayers would have input tax more than output tax, they would be eligible to claim refund.
The CNG stations tried to take the benefit of SRO 748 (I)/2010 for claiming refund of excess input tax not relating to zero-rated supplies. However, CNG gas stations are not covered under the definition of the gas distribution companies and subsequently are not qualified for availing this concession/facility. The CNG stations are already operating under the fixed sales tax regime and are not entitled to refund excess input tax. Following is the text of the FBR clarification on CNG stations issued to the LTUs/RTOs: A matter came up in the Board's meeting as to whether the subject SRO is applicable to the CNG stations or not. It was clarified that SRO 748(I)/2010 dated 05-08-2010 is applicable to gas transmission and distribution companies, ie Sui Northern Gas Pipelines and Sui Southern Gas Company, and the aforesaid notification does not apply to the CNG stations, the FBR directive added.