The Economic Coordination Committee (ECC) of the cabinet has principally approved a summary to abolish all taxes on oxygen gas, its cylinders and cryogenic oxygen tanks for storage and transportation.
The exemption and abolishment of taxes will be implemented for the next year from November 2021.
As per the details available with ProPakistani, the Ministry of Industries and Production had approached the ECC regarding an extension in tax exemption on the import of oxygen gas, oxygen gas cylinder and cryogenic oxygen tanks after the Federal Board of Revenue had refused its request.
The Ministry of Industries had proposed the abolishment of three percent customs duty, two percent additional customs duty, 17 percent GST and two percent withholding tax on oxygen.
For oxygen cylinders, the summary requested the abolishment of 20 percent customs duty, seven percent additional customs duty, 17 percent GST and 5.5 percent withholding tax. For cryogenic tanks/vessels, the ministry proposed the abolishment of three percent customs duty, two percent additional customs duty, 17 percent GST and 5.5 percent withholding tax.
The Ministry of Industries and Production submitted the same summary “Uninterrupted Supply of Oxygen Gas in the Country for Medical Purposes” for ECC approval in November 2021. The ECC asked the ministry to submit the proposal after consultations with the Finance Division and the Federal Board of Revenue (FBR).
The Finance Division and FBR did not support the proposal for extension in the date of SRO 552(1/2021 and SRO 590(1)/2021 for another year because of the revenue impact of Rs. 900 to 1000 million approximately.
The Ministry of Industries in its summary said that National Command and Operations Centre (NCOC) instructed the ministry vide letter dated January 3, 2022, to maintain sufficient reserves of medical oxygen by all producers (80 percent of total storage) at all times to meet the demand for medical oxygen in the coming days. Therefore, based on requests received from oxygen manufacturers and directions received from NCOC, the ministry again submitted the summary to the ECC.
With ECC approval, the oxygen gas, oxygen gas cylinders and cryogenic oxygen tanks for the health sector would be imported duty-free for the period of the next twelve months on the expiry of the previous exemption in November 2021 to cope with the fifth wave of COVID-19 in the country.
