A customs appellate tribunal has upheld the recovery of a 10% regulatory duty, amounting to billions of rupees, from six oil companies on the import of petrol (motor spirit) in 2022.
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The two-member tribunal ruled in favor of departmental appeals against an order by the collector customs (appeals) which had been in favor of the oil importers, including Hascol Petroleum Ltd, Gas & Oil Pakistan Ltd, Taj Gasoline Ltd, My Petroleum (Pvt) Ltd, Puma Energy Pakistan Ltd, and Euro Oil (Pvt) Ltd.
The oil companies claimed an exemption from the regulatory duty under SRO 806(1)/2022, issued on June 20, 2022. However, the federal government had imposed a 10% duty on petrol imports through the same SRO, specifying that this regulatory duty would not apply to cargoes for which letters of credit (LCs) had already been opened or were already at sea.
The scheme was time-specific, applicable only until June 30, 2022, and ceased to exist from July 1, when SRO 966(1)/2022 came into effect. The import of petrol, where customs duty at a rate of 10% was paid, was to be exempt from the regulatory duty.
When denied the exemption, the oil importers filed petitions before the Sindh High Court, seeking an extension of the benefit to the imported goods, including petrol. The SHC allowed the provisional release of the imported goods by securing the disputed amount through pay orders or bank guarantees. However, the high court ultimately dismissed the petitions in its final decision.
The tribunal’s decision reinforces the federal government’s imposition of the regulatory duty, ensuring that the oil companies comply with the payment of billions of rupees in duty for their petrol imports.
