The National Board of Revenue (NBR) has issued a special directive exempting an additional 7.5% value-added tax (VAT) on the production of liquefied petroleum gas (LPG).
This order, which aims to make LPG production and use more accessible, was issued on Monday (13 January).
Currently, LPG is utilised as a cooking fuel in households, as autogas for vehicles at refuelling stations, and as fuel in various industrial establishments.
The order highlights that due to the inadequate supply of natural gas from distribution companies, the demand for LPG in sectors such as garment manufacturing and other industries is consistently rising.
In response to this growing demand, the NBR, exercising its powers under subsection (3) of section 126 of the Value Added Tax and Supplementary Duty Act, 2012 (Act No. 47 of 2012), has granted an exemption from the additional 7.5% VAT at the production stage of LPG.
The NBR also announced that this order will be considered effective from 9 January.
