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FBR issues notice to SSGC to recover Rs8.2 billion tax

FBR issues notice to SSGC to recover Rs8.2 billion tax

KARACHI: Federal Board of Revenue’s Large Taxpayers Unit (LTU) Karachi, acting on a Sindh High Court’s judgment, has issued a notice to Sui Southern Gas Company Limited (SSGCL) for recovery of Rs8 billion tax.

On November 25, 2016, the court had dismissed utility firm’s petition to adjust the amount under unaccounted for gas (UFG) losses.

“After scrutinising the sales tax returns and auditing accounts for the years 2010-2011, 2011-2012, 2012-2013 and 2014-2015, the LTU discovered the SSGCL had purchased the gas and supplied the same having declared line losses over and above the prescribed limit set by Oil and Gas Regulatory Authority (OGRA).”

Officials at the SSGCL said the recovery proceeding has already been challenged in the court.

The LTU official said the gas utility had claimed 9.43 percent, 10.80 percent, 8.43 percent, 13.82 percent and 13.62 percent UFG losses for years 2010-2011 to 2014-2015, respectively. “The regulatory authority, however, rejected the claim and allowed UFG at 4.25 percent for 2010-2011 and 4 percent for remaining years,” he said.

The FBR sources further informed that the SSGCL had filed a petition against the OGRA decision, but it was dismissed by the SHC. “Since SHC is the last appellate forum under the OGRA rules and SSCG cannot file an appeal at a higher court, thus FBR finalised its calculation for recovery,” another official at LTU Karachi said.

He said the calculation had been settled on the difference between UFG claims made by the SSGCL and allowed by the OGRA. “Thus, the recovery for the year figured at Rs8.2 billion,” the official added.

Also, the notice issued by the LTU stated that value of gas available for the sale for the period under review turned out to be Rs662.39 billion on which the company claimed input tax amounting to Rs110.07 billion declaring higher line losses.