The Senate Standing Committee on Finance on Monday recommended the government of abolishing deemed duty and reviewing of petroleum pricing formula. Senator Rukhsana Zubari said the removal of deemed duty would bring down petroleum prices by Rs 7 per liter as some members demanded immediate withdrawal of deemed duty.
Chairman Federal Board of Revenue (FBR) Abdullah Yousaf opposed the withdrawal of 15 percent GST on petroleum products, arguing that it would open a new Pandora box. The GST will earn Rs 150 billion to the government next year while assuring to submit the total revenue collected through GST, custom duty as well as the money went to the oil refineries in terms of deemed duty during the ongoing fiscal.
Chairman FBR said overall review of oil pricing formula is required by the Ministry of Petroleum. He said he would propose five percent duty reduction on High Speed Diesel (HSD) ie from 10 percent to 5 percent with the proposal of 5 percent duty on crude oil to minimise the revenue loss on the custom duty.
Senator Dilawar Abbas was of the view that GST should be reduced gradually from 15 percent on petroleum products while government is considering to reduce deemed duty from 10 to 5 percent. Senator Rukhsana Zubairi said the duty was allowed when the oil prices were very low. Presently the oil prices are high in the international market, the government should abolish the duty. The committee, which wind up deliberations on budget proposals said to have finalised 65 proposals to be given to the government for incorporation in the budget.
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