FBR reduces sales tax rates on petroleum products

FBR reduces sales tax rates on petroleum products

ISLAMABAD: Federal Board of Revenue (FBR) has reduced the rates of sales tax on domestic supply of petroleum products.

The sales tax rates have been reduced in order to maintain the retail prices for end consumers applicable from the first fortnight of May 2021.

The FBR issued SRO 551(I)/2021 dated May 09, 2021 to amend SRO 57(I)/2016 dated January 29, 2016.

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:

β€œIn line with the vision of the Prime Minister 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.

It is pertinent to mention that the Government was not charging any Petroleum Levy (PL) on Kerosene and light diesel oil.

The cumulative revenue impact of the decision will be Rs. 4.8 billion.

The prices of petroleum products w.e.f 1st May 2021 are as follows: MS Petrol Rs.108.56/liter High Speed Diesel Rs. 110.76/liter Kerosene oil Rs. 80.00/liter Light Diesel Oil Rs. 77.65/liter

A uniform rate of sales tax at 17 percent was announced for all petroleum products through SRO 700(I)/2019 effective from July 01, 2019. However, this notification has been now amended.