ISLAMABAD: In order to rationalize the rate of sales tax on petroleum products, the Federal Board of Revenue (FBR) is going to introduce fixed rate of sales tax on petroleum products.
In this regard, the FBR has moved recommendations and proposals to the Finance Ministry for inclusion in the upcoming budgetary proposals.
Presently, Rs 9.99 per litre sales tax of motor spirit excluding is charged. Rs 25.16 sales tax is being charged from per litre High Speed Diesel oil. Moreover, Rs 10.65 sales tax is being charged from per litre HOBC. Rs 3.60 sales tax is being charged from per litre kerosene as well as Rs 3.38 is being charged from per litre Light Diesel Oil.
A well-placed source at FBR told Customs Today that after inclusion of the proposed recommendations in the Finance Bill, Finance Minister Ishaq Dar would announce them in his budget speech.
“Once the proposals are approved and passed by the parliament, FBR will announce fixed rate of sales tax on petroleum products through SRO” the source said adding that at present a standard rate of sales tax at the rate of 17% was levied on the supply of LNG except supply made to CNG sector which was charged at the rate 5%.
The source said that FBR earned revenue of Rs 10 billion last year by levying sales tax on petroleum products in January this year. FBR fixed sales tax per litre on all petroleum products from February 1, 2016, replacing the existing mechanism of charging sales tax on percentage basis.
Furthermore, the source said that previous system of charging sales tax on the basis of percentage has resulted in increase/decrease in sales tax on POL products, depending on their monthly prices. However, the source said that fixation of sales tax on POL products would ensure collecting the same amount of sales tax in both the cases of raise or decrease in prices of petroleum products.
