The Federal Board of Revenue (FBR) has abolished or reduced the sales tax on all petroleum products from January 16, 2022. It has abolished sales tax on light diesel oil from the said date.
FBR issued on Thursday an SRO.183(i)/2022 to amend S.R.O. 57(I)/2016. According to the notification, the general sales tax (GST) on petrol has been reduced from 2.50 percent to 0.79 percent, showing a decrease of 1.71 percent.
The sales tax on high-speed diesel oil has been reduced from 5.44 percent to 3.17 percent, reflecting a decrease of 2.27 percent. Likewise, the sales tax on Kerosene has been decreased three percent, bringing it down from 8.30 percent to 5.30 percent.
Read also : PTCL Group Posts Highest Ever Revenue of Rs.138 Billion
The federal government has also reduced the rate of petroleum levy to absorb the international oil price rise with effect from February 1, 2022.
Notably, the price of petroleum products has peaked at $90 per barrel in the international market — the highest level since 2014 with an increase of 14.5 percent in January over December.
Based on the existing levels of consumption, the estimated revenue loss on account of zero sales tax on petroleum products would be between Rs. 21 billion to Rs. 25 billion in one month, an official of the tax machinery told ProPakistani on condition of anonymity.
The Finance Division had said that the existing GST rate and petroleum levy on various petroleum products were well below the budgeted targets and that the government was bearing the revenue loss of around Rs. 30 billion (fortnightly) from what was budgeted to the current petroleum levy and sales tax rates.
The petroleum levy on petroleum products has also been revised. The rate of petroleum levy on petrol has been reduced from Rs. 17.62 per liter to Rs. 13.92 per liter, on HSD [high speed deisel] from Rs. 17.14 to Rs. 9.30 per liter, on SKO [superior kerosene oil] from Rs. 5.91 to Rs. 1 per liter and on LDO [light deisel oil] from Rs. 7.66 to Rs. 5.50 per liter.
