ISLAMABAD: Federal government is likely to impose general sale tax (GST) on petroleum products in the second half of November as an additional measure to cover October’s shortfall of Rs 22 billion, an official of Petroleum Division told Business Recorder on condition of strict anonymity.
On March 1, the then prime minister Imran Khan announced sales tax exemption on all petroleum products - petrol, HSD, kerosene and light diesel oil (LDO).
The FBR is facing an uphill task to collect over Rs 700 billion revenue for November 2022 to overcome the October shortfall of Rs 22 billion.
For the first half of November the government has raised petroleum levy to its maximum limit of Rs 50 per litre on petrol; however, there is significant room to increase the Petroleum Levy (PL) on High Speed Diesel (HSD) which is Rs 4 per litre at present.
The government has set a target of Rs 62.5 billion PL collection on petroleum products every month.
Petroleum prices to remain unchanged for next fortnight: Ishaq Dar
In addition, the government has reportedly projected additional revenue of Rs 30 billion if it decides to levy 17 percent GST on petroleum products each month.
The shortfall in collection of petroleum levy against the budgeted target was Rs 187.5 billion in July to September 2022 – with actual collection in July amounting to Rs 15 billion, August Rs 17 billion and September Rs 20 billion against the target of Rs 62.5 billion every month, sources said.
The federal government was unable to achieve projected target of PL for July-September 2022-23 due to a massive decline in consumption of two major petroleum products – petrol and HSD due to the raise in their prices.
A representative of Oil Companies Advisor Council (OCAC) told Business Recorder that low fuel consumption and projected increase in oil prices globally from this month due to the OPEC+ decision to curtail output by2 million barrels a day would widen the overall revenue shortfall.
During the first quarter (July-Sept) fiscal year 2022-23, petroleum products sales declined to 4.5 million tonnes against 5.9 million tonnes in the same period last year, reflecting a decline of 23 percent year-on-year due to high prices of oil globally and unstable exchange rate.
Copyright Business Recorder, 2022
Also read:
Comments
Comments are closed.