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ISLAMABAD: The federal government is considering to impose General Sales Tax (GST) on all petroleum products from October 1, 2022 to generate additional revenues as international oil prices have been on downward trend.
A proposal has been sent to Prime Minister’s office and in case of approval, the consumers will pay tax on account of Rs10.5 percent GST and Rs30 per liter petroleum levy, in addition to paying other charges like dealers and distribution companies’ margins, Business Recorder reported on Saturday.
As per the BR’s report, the government has set a target to collect revenue of Rs91 billion from both GST and PL on petroleum products.
The government is expected to collect Rs60 billion PL and Rs31 billion GST per month but depends on oil prices internationally and exchange rate.
This will guarantee minimum Rs279 billion per annum revenue only on account of GST from petroleum products at current consumption levels, according to the report.
At present, the government charges no GST on petrol, high speed diesel (HSD), kerosene oil (SKO) and light diesel oil (LDO). Due to increased prices of petrol in global market and unstable exchange rate, the government’s tax revenues from petroleum products have been adversely affected.
The advantage of the PL is that collection under the levy is not shared with the provinces. The GST collection becomes part of the federal divisible pool that is then distributed between the Centre and the provinces under the National Finance Commission award. For the current fiscal year, the government has projected PL collection at Rs750 billion.
