ISLAMABAD: The rates of sales tax on domestic supply of petroleum products has been reduced according to Federal Board of Revenue (FBR) by May 01,2021.
- The FBR has amended S.R.O. 57(I)/2016 (sales tax on petroleum products) through a notification S.R.O. 557 (I)/2021 issued on Monday.
- According to the notification, the standard rate of 17 percent would remain applicable on Motor spirit and High-speed diesel oil from May 1.
- The federal government had kept the prices of petroleum products unchanged for the first half of May ahead of Eid ul Fitr.
The Federal Board of Revenue (FBR) has reduced sales tax from 17 percent to 15.44 percent on Kerosene oil and from 17 percent to 7.56 percent on Light diesel oil from May 1, 2021, to adjust sales tax rates for maintaining prices of the petroleum products unchanged during May.
Following are the revised sales tax rates on petroleum products from May 01, 2021:
Motor spirit: 17 percent ad valorem
High speed diesel oil: 17 percent ad valorem
Kerosene: 15.44 percent ad valorem
Light diesel oil: 7.56 percent ad valorem
On April 30, 2021, a press statement was issued by the finance division:
Prime Minister aims to provide relief to the consumers in the holy month of Ramazan, the Government has decided not to increase the prices of the petroleum products. The implementation of this proposal requires an adjustment in the rates of petroleum levy on all petroleum products and a reduction in sales tax as well in case of kerosene oil and light diesel oil.
The cumulative revenue impact of the decision will be Rs. 4.8 billion as the implementation of this proposal requires an adjustment in the rates of petroleum levy (PL) on all petroleum products and a reduction in sales tax as well in the case of kerosene oil (SKO) and light diesel oil (LDO). The government was not charging any PL on SKO and LDO.
The government reduced the rate of PL on petrol to Rs. 6.39 per litre from Rs. 11.23 per litre. The GST on petrol, however, remained unchanged at Rs. 15.77 per litre notified for the second quarter of April.