ISLAMABAD: Federal Board of Revenue (FBR) announced a reduction in the sales tax rate on petrol to absorb the impact of higher prices of petroleum, oil and lubricants (POL) and facilitate the general public, a notification said.
In this regard, the Federal Board of Revenue (FBR) issued an SRO 860(I)/2021 to reduce the sales tax on petrol to 16.40 per cent from 17 per cent.
The government from July 1, 2019 imposed a flat sales tax rate of 17 per cent through an SRO 700(I)/2019. Since then, it was the first reduction in the sales tax rate on the supply of petrol. Previously, the sales tax rates on kerosene and light diesel oil have been brought down to 6.7 per cent and 0.2 per cent, respectively.
However, the sales tax rate on the supply of high-speed diesel has been kept unchanged at 17 per cent.
On June 30, 2021, the government had announced an increase in the prices of petroleum products. However, the authorities claimed that the government had not passed on the actual hike in prices to the end-consumers.
To provide maximum relief to the consumers, the government has maintained the practice of keeping the prices of petroleum products at an affordable level.
“Ogra [Oil and Gas Regulatory Authority] has been recommending substantial increase in the prices of petroleum products since May 1, 2021, corresponding to the increase in the prices of the petroleum products in the international markets,” an official statement said on June 30, 2021.
However, keeping in view the welfare of the general public, the government has absorbed the impact of the increase by making adjustments in the sales tax and petroleum levy, it added.
