Business

Govt to consider increasing GST on petroleum on IMF demand

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Staff Reporter

2 years ago

According to sources, the federal administration is debating whether to propose imposing a General Sales Tax (GST) on petroleum or raising the present rate of charge in order to comply with the IMF’s demand that the 18% GST be reinstated.

In the budget for the upcoming fiscal year, a rise in the gas tax from Rs. 60 to Rs. 100 per liter is planned. At the moment, petroleum and diesel are subject to a levy of Rs60 per liter, which generates an estimated Rs 950 billion in income annually. Since March 2022, the GST on fuel goods has stayed at 0%.

The planned GST rate in the budget was 18%. The reinstatement of the GST standard rate has been demanded by the International Monetary Fund, sources.

The government has declared that it will keep fuel prices the same while lowering high-speed diesel by Rs 1.77 per liter. The announcement states that the price of petrol will not change from Rs 279.75 per litre. The cost of high-speed diesel has decreased, though, to Rs 285.56 a litre from Rs 1.77 paise per litre previously.

This move, which attempts to stabilize domestic fuel costs, comes amid volatility in the price of oil globally. The Ministry of Finance routinely examines petroleum product pricing, taking into account the effects on consumers and the economy, in order to bring them into line with global market trends.

Sources from the Ministry of Finance suggest that there has also been a decrease in the price of light diesel oil of Rs. 2.12 per liter and kerosene of Rs. 1.35 per liter, even though these changes are not specifically stated in the notification.

Staff Reporter