KARACHI: The Sindh High Court (SHC) has sought comments from secretary Ministry of Finance, Commissioner Inland Revenue – III, Large Taxpayers Unit, Deputy Commissioner Inland Revenue, Large Taxpayers Unit and others on a plea filed by M/s Sui Southern Gas Company Limited (SSGCL) over sales tax collation on supply of natural gas to CNG stations.
A two-member bench comprising Justice Munib Akhter and Justice Abdul Malik Gaddi heard the application.
Earlier, the petitioner’s counsel stated that petitioner is collecting sales tax on supply of natural gas to the CNG stations as provided in rule 20 of special sales tax procedure rules ,2007 read with section (46) of 52 and sub section (8) of section 3 of the sales tax act, 1990.
According to the petitioner, the officials of the Inland Revenue issued notice on November 24, 2015 to the petitioner, without mentioning any specific provision of law. He alleged that the petitioner can only adjust its input against its output tax and any amount of tax as withholding agent cannot be adjusted against its own input tax.
Counsel argued that petitioner is entitled for input tax credit for the tax paid on its entire purchases for making taxable supplies against output tax payable including the entire amount of sales tax collected from CNG stations under section 3 (8) of the sales tax act, 1990. Counsel pleaded to the court to set aside impugned notice of the respondents.