Mohsin Siddiqui (Chief Reporter)

Sui Northern Gas Pipeline Limited (SNGPL) finds itself in a challenging situation after receiving a tax demand notice amounting to Rs160 billion from the Federal Board of Revenue (FBR).

The gas utility company has urgently reached out to the Ministry of Energy (Petroleum Division) with two consecutive letters within a span of two weeks. These letters appeal for leniency in the recovery of the Rs160 billion tax demand.

Continuing its communication initiated on February 16, 2024, and February 23, 2024, regarding the tax notice issue, SNGPL has expressed concern over the undue tax demand imposed by the FBR. This demand, attributed to gas swapping issues from FY 2014-15 to 2020-21, is significantly impacting SNGPL’s financial liquidity.

According to the managing director of SNGPL, despite pursuing legal remedies, the company has been subject to a conditional stay granted by appellate forums, mandating a payment of Rs5-10 billion towards the FBR’s demand. However, given the current liquidity crisis exacerbated by the circular debt issue, meeting this demand is unfeasible for SNGPL.

Amir Tufail, in his letter, emphasized the criticality of ensuring the smooth operation of the RLNG supply chain in the country. He warned that coercive actions by the FBR to recover the tax demand could further strain SNGPL’s liquid resources and disrupt the RLNG supply chain, endangering operational stability.

To address this pressing issue, SNGPL has sought the intervention of the petroleum secretary, urging him to engage with the FBR to refrain from initiating coercive actions for recovering the substantial tax demand.