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FBR reduces sales tax on petroleum products

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Federal Board of Revenue, via a notification dated 31st July 2018, decreased the rate of sales tax on various petroleum products, with the reduction being applicable from August 1st 2018.

Sales tax for motor spirit, excluding High Octane Blending Component (HOBC), has been reduced to 9.5% of the transaction value from the 12% rate that was being applied from 8th July 2018.

The largest drop in sales tax has been for light diesel oil, the rate for which has been reduced to 1% of the transaction value, compared to 9% previously.

Similarly, the sales tax rate for Kerosene has been cut into half after setting it at 6% of the transaction value, compared to 12% set before.

Tax reduction for High-speed diesel oil has been marginal, with a reduction of merely 2% as the new sales tax has been announced at 22% of the transaction value, down from the 24% tax rate previously.

The relief in petroleum prices is expected to serve towards reducing the costs of production and providing the much-needed respite to the masses, while giving a boost to the economic activity.

Posted on: 2018-08-03T14:07:00+05:00

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