The Federal Board of Revenue (FBR) has reduced the Sales Tax on petrol. According to a notification, the tax has been slashed by 5.63%, affecting July 16, 2021. FBR has issued SRO 937(i)/2021 for this purpose on Monday.
The step has been taken to absorb the high impact of petroleum products and facilitate the general public.
According to the SRO, the tax on MS Petrol reached 10.77% from 16.30%. The notification read: “In exercise of the powers conferred by clause (b) of sub-section (2) of section 3 of Sales Tax Act, 1990, the federal government is pleased to direct that the following further amendment shall be made from July 16, 2021.”
Meanwhile, the authority has maintained Sales Tax on High-Speed Oil at 17%, Kerosene Oil at 6.70% and Light Diesel Oil at 0.20%.
Previous Reduction in Sales Tax on Petrol:
It is pertinent to mention that this is the second reduction within this month. On July 6th, FBR reduced the tax on petrol to 16.3% from the previous 17%. Meanwhile, the tax on Kerosene Oil was brought down to 6.7% and Light Diesel Oil to 0.20%.
On July 1st, 2019, the government imposed a flat 17% Sales Tax on Petroleum Products, and this was the first reduction since then.
Increase in Petrol Prices:
On June 16, the petrol price increased by Rs. 2.13 per litre. On July 1, the petrol price jumped up by Rs. 2 per litre. Now, the price has gone up by Rs. 5.4 per litre with effect from July 16.
As per reports, The Oil and Gas Regulatory Authority (OGRA) sent a summary to the Petroleum Division. OGRA proposed to increase petrol price by Rs. 11.5, high-speed diesel price by Rs. 2.40, light-speed diesel price by Rs. 1.40, and kerosene oil price by Rs. 1.50.
The Prime Minister, Imran Khan, reviewed and approved the proposal, but with some tweaks and changes. The finance ministry announced the new prices. Petrol price has been increased by Rs. 5.4 and diesel price by Rs. 2.54.
