ISLAMABAD: The Federal Board of Revenue (FBR) has reduced the sales tax on petrol to a nominal 1.43 per cent effective from November 11, 2021.
The sales tax rate has been reduced from 6.84 per cent to provide relief to the masses against a sharp rise in the prices of petroleum products in the international market. The FBR issued SRO 1450 (I)/2021 for announced reduction in the sales tax rates on petrol and high-speed diesel. The tax authority reduced the sales tax rates by 73 per cent on petrol, compared with the rates notified on October 7, 2021. The revenue body also reduced the rate of sales tax on high-speed diesel to 6.75 per cent from 10.32 per cent. However, the sales tax rates on kerosene and light diesel oil (LDO) have been kept unchanged at 6.70 per cent and 0.20 per cent, respectively.
The revenue body has already imposed a reduced rate of sales tax on petroleum products, as the normal sales tax rate is 17 per cent. The government on November 4, 2021 notified increased petroleum prices, which are now at an all-time high. Under the notification, the petrol was fixed at Rs145.82/litre instead of Rs137.79, showing an increase of Rs8.03. The HSD has been fixed at Rs142.62/litre, compared with Rs134.48, up Rs8.14.
The price of kerosene was set at Rs116.53/litre from Rs110.26, up Rs6.27. Likewise, the rate of light diesel oil (LDO) increased to Rs114.07/litre from Rs108.26, showing an increase of Rs5.72. According to the government authorities, despite the all-time high prices, the government had absorbed the price shocks through reduction in the sales tax rates.
