ISLAMABAD: In a bid to offset the revenue shortfall, the General Sales Tax (GST) on petroleum products has been increased General Sales Tax (GST) by 5 percent to 22 percent from the existing 17 percent.
This move will enable the government to collect additional Rs19 billion due to increase in GST and Rs10 billion on account of the existing petroleum levy in the month of January 2015.
However, the raise will deprive people of half the relief they would have received (Rs3-6 per litre) from January 1, 2015.
According to reports, the government is estimated to collect over Rs45 billion in the current fiscal on account of increase in GST on POL products provided POL prices do not tumble further.
The financial experts see the government move as to offset the estimated loss of Rs70 billion in revenue.
According to finance minister Ishaq Dar the FBR had worked out an estimated loss of Rs65-70 billion in revenue for the current financial year on account of the decline in the prices of petroleum products and the reduction in revenue will impact the budget and divisible pool.
As per the notification, people will be deprived of relief amounting to Rs3.90 on one litre of petrol, Rs5 on high octane blending component (HOBC), Rs3.30 on light diesel oil (LDO) and Rs3.50 on kerosene oil and Rs4.50 on high speed diesel (HSD).
It is to be noted that Ogra will initiate a summary for cut in POL products and submit it today (Wednesday) to the Ministry of Petroleum and Natural Resources that will forward it to the Finance Ministry for approval.
It is pertinent to mention here that India in last month had raised tax rates on both petrol and diesel.
