Thursday, 29 September, 2022

Tax at Source

Gas distribution cos want refund of Tk 1559cr from NBR

Gas distribution cos want refund of Tk 1559cr from NBR

Popular News

Gas distribution companies asked the National Board of Revenue to return Tk 1559.48 crore which was realised as additional tax at source on gas bills from fiscal years 2015-16 to 2021-22.

The companies said that the NBR realised the tax on gas bills instead of the companies’ distribution margins, making them pay more tax at source than the tax liability as the gas prices increased.

According to them, an additional amount of tax worth Tk 1559.48 crore than their tax liability was curtailed from their income over the past seven years.

The companies allege that the revenue board is yet to refund the money despite the submission of income tax returns every year by an income tax adviser since FY2015-16.

In an inter-ministerial meeting, chaired by Energy and Mineral Resources Division (EMRD) additional secretary SM Zakir Hossain, the EMRD proposed to set the tax at source to 0.32 percent from 3 percent now.

The proposed tax at source is expected to help reduce the burden of gas distribution companies, said sources at the meeting held on August 17, 2022.           

The meeting proposed to fix tax at source on end-user price at 0.40 percent instead of 3 percent, which would help to adjust the income tax with the tax liability.

However, as the gas price increased and distribution margin fell at consumers-end since June 2022, the tax at source should be 0.32 percent on end-user price.

According to Bangladesh Energy Regulatory Commission (BERC), the gas distribution companies are supplying natural gas to consumers at the BERC-fixed tariff.

As per the latest tariff, the current distribution margin to supply the natural gas was fixed by Tk 0.1300 per cubic meter in June, 2022. It had been Tk 0.5500 per cubic meter since August 2015.

As per the BERC instructions, the collection of the amount of the gas sales should be deposited to Petrobangla’s concerned companies, except the gas distribution margin. According to income tax ordinance 1984 (Section-52), rule-16, the gas bills will be deposited to distribution company’s bank account after deducting 3 percent tax at source.

An official said the amount of the tax at source has been increased after increase of natural gas tariff in June, 2022.

He said the gas distribution companies failed to get refund of additional collection of Tk 1559.48 crore after adjustment collected between 2015-16 and 2021-22 fiscal years. Official sources said the companies are currently facing financial crisis in making different payments including LNG charge against gas bills and implementing development projects at their own funds.

“The companies are in severe financial trouble to implement their ongoing projects as well as payment of gas bills,” the official said.  According to Petrobangla sources, the government earned Tk 17,866.23 crore income tax in the fiscal year 2020-21, which is estimated to increase to Tk 21,975.46 in fiscal year 2022-2023.