Govt increases GST on petroleum products by 5pc
ISLAMABAD: The government has increased taxation on petroleum products by increasing the General Sales Tax (GST) by 5 percent (from 17 percent to 22 percent). Owing to this step, people will be deprived of half the relief they would have received (Rs3-6 per litre) from January 1, 2015.The decision will enable the government to collect an additional Rs19 billion as GST and Rs10 billion on account of the existing petroleum levy just in the month of January 2015.
The government is estimated to collect over Rs45 billion in the current fiscal just because of the increase in GST on POL products provided POL prices do not tumble further. However, it is not clear how long this taxation will stay at 22 percent in case POL prices start surging in the international market.
The government has taken the decision ostensibly to partially offset the estimated loss of Rs70 billion in revenue quoting the example of India. The News in its edition of December 30, 2014 broke the story with the headline ‘More taxation or development budget cut is on cards’ on account of the mammoth loss of Rs70 billion in revenue.