The Federal Board of Revenue (FBR) has reduced the sales tax rate on petrol from 6.84 percent to 1.43 percent with effect from November 11, 2021.
According to SRO.1450(I)/2021 issued on Thursday to amend the SRO.57(I)2016, the sales tax rate on high-speed diesel oil (HSD) has been reduced from 10.32 percent to 6.75 percent. However, the sales tax on Kerosene and light diesel oil remains unchanged at 6.70 percent and 0.20 percent, respectively.
In its biannual review released earlier, the FBR revealed that petroleum products made up the major chunk of the collection of domestic tax. The FBR’s data revealed that petroleum products, the top revenue-generating source with a 34.9 percent share, recorded 30.1 percent growth during 2020-21.
Like in the domestic sales tax, petroleum is the leading source of sales tax collection at the import stage. Its share in total sales tax imports is around 23 percent. During FY 2020-21, collection from POL products was Rs. 255.7 billion against Rs. 231.3 billion in FY 2019-20, reflecting a growth of 10.6 percent, according to FBR.