SOHAIL SARFRAZ

ISLAMABAD: The Federal Board of Revenue (FBR) has increased sales tax from 20 percent to 25.5 percent on Motor spirit, 17 to 24 percent on HOBC, 20 to 30 percent on Kerosene, 36.5 to 45 percent on High speed diesel oil and on Light diesel oil from 20 to 29.5 percent from September 1, 2015.

In this regard, the FBR has SRO.847 (I)/2015 issued here on Monday. According to sources, the FBR has estimated revenue to the tune of Rs 6-7 billion from changes in the sales tax rates on POL products. The increase in sales tax on POL products will offset the negative revenue impact in the wake of declined oil prices that had caused over Rs 200 billion revenue loss during the last financial year.

However, another official was of the view that in fact FBR is facing overall shortfall in revenue collection from petroleum products due to fall in its prices. This measure would only partly compensates in collection.

Last SRO 720(I)/2015 was issued on July 31, 2015 which remained in enforce from August 1-31 2015. Under a notification issued here on Monday, the FBR has increased sales tax on all major petroleum products ranging from 25.5 percent to 45 percent with effect from September 1, 2015. The highest ever sales tax rate was increased for High Speed Diesel (HSD) which was raised from 36.5 percent to 45 percent, they added.

According to an SRO.847(I)/2015 issued here on Monday, Motor spirit covered under

Pakistan Customs Tariff Heading 2710.1210 would now be subjected to sales tax at 25.5% ad valorem; HOBC under Pakistan Customs Tariff Heading 2710.1210 would be subjected to sales tax at 24 % ad valorem; Kerosene (Pakistan Customs Tariff Heading 2710.1911) sales tax 30% ad valorem; High speed diesel oil(Pakistan Customs Tariff Heading 2710.1931) sales tax 45% ad valorem and Light diesel oil covered under Pakistan Customs Tariff Heading 2710.1921 would now be subjected to sales tax at the rate of 29.5 ad valorem.

Following is the text of the SRO issued here on Monday: SRO.847(I)/2015 In exercise of the powers conferred by clause (b)of sub-section (2) of section 3 of the Sales Tax Act, 1990, the Federal Government is pleased to direct that the following further amendment shall be made in its Notification No.SRO.383(I)/2005 dated 30th April, 2015, namely:-

In the aforesaid Notification, for the existing Table, the following shall be substituted, namely:-

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TABLE


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S. No.    Description                     PCT heading                  Rate


(1)           (2)                              (3)                      (4)


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1        Motor spirit excluding HOBC       2710.1210      25.5%  ad valorem


2        HOBC                              2710.1210        24 % ad valorem


3        Kerosene                          2710.1911         30% ad valorem


4        High speed diesel oil             2710.1931         45% ad valorem


5        Light diesel oil                  2710.1921       29.5 ad valorem"


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