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PLL deducts Rs500m CD from regasification charges of PGPC’s LNG terminal
LNG import terminal

PLL deducts Rs500m CD from regasification charges of PGPC’s LNG terminal

ISLAMABAD: Following a decision of the honourable court, Pakistan LNG Limited (PLL) has deducted Rs500 million customs duty from the regasification charges of Pakistan Gas Port Consortium’s (PGPC) liquefied natural gas (LNG) terminal.

The row between PLL and PGPC emerged as the later refused to pay customs duty and withholding tax worth Rs2.5 billion. This refusal sparked criminal proceedings under the Customs Act against PGPC. The stoppage of regasification through the PGPC terminal was also on the cards in case the duty was not cleared. Also, two cheques worth Rs480.68million were also dishonoured by the concerned bank with remarks that the matter was pending with the court.

Sources said PLL had earlier called an important meeting of its board of directors as the Customs Collectorate Port Qasim decided to initiate criminal proceeding against PGPC under Customs Act, 1969. Model Customs Collectorate Port Bin Qasim issued a demand notice to PGPC for payment of deferred customs duty on import of floating storage and regasification unit (FSRU) by August 15, 2018, said sources.

The available copy of demand notice of Model Customs Collectorate Port Bin Qasim to PGPC informed that an approval to pay Rs1.5 billion worth customs duty in five instalments in one year on defer payment basis was made on January 10, 2018. Similarly, although PGPC has given cheque worth Rs480 million for the payment of the third instalment, yet it (PGPC) stopped Customs to encash it.

The Customs Collectorate had also declared in its demand notice to PGPC that violation may result into the initiation of criminal proceedings under relevant rules besides other actions for recovery of outstanding leviable duties and taxes including but not limited to stoppage of regasification through FSRU installed at the PGPC jetty.

The honourable court order on July 26 instructed the collectorate not to encash postdated cheque submitted by PGPC in advance for payment of the third instalment. However, on the next date of hearing (August 8), the court after hearing both sides dismissed the writ petition of PGPC. In pursuance of the court order, two post-dated cheques of Rs454,454,550 and Rs32,405,473 respectively were sent for encashment to the concerned bank but the same was dishonoured and returned by the bank with remarks that payment stopped by the drawer and cheque returned due to Islamabad High Court stay order.