Govt increases GST on petroleum products to 22%
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ISLAMABAD: The federal government on Tuesday increased sales tax on petroleum products by five per cent, effectively depriving consumers of an estimated Rs5 billion worth of relief following the fall of crude oil prices in the international market.
The increase in GST on some petroleum products was announced through a notification issued today by the Federal Board of Revenue (FBR) on the advice of the Finance Ministry.
According to the notification, a copy of which is available with DawnNews, sales tax will be charged at the rate of 22 instead of 17pc on High-speed Diesel oil, Light Diesel Oil, Kerosene, and Motor spirit including HOBC.
The notification shall take effect from Jan 1, 2015.
Crude oil prices have fallen sharply in the international market since late June, losing around 30pc as supplies increase and global demand for oil grows more slowly.
The measure to increase GST on the petroleum products was taken by the government to partially offset a shortfall in revenue of the FBR after the decline of oil prices in the global market.
Sources said the decision was taken after Finance Minister Ishaq Dar held a series of meetings with the ministries of finance and petroleum, Oil and Gas Regulatory Authority (Ogra) and FBR to find ways of retaining some of the reduction in oil prices instead of passing on full benefit to consumers.
Sources say the monthly impact of reduction in oil prices was Rs1-3bn, but the real cause of concern was the government’s loss on account of windfall revenue loss on crude, which normally yielded Rs30-35bn every year as a result of higher international price.
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On DawnNews
Comments (74) Closed
Dec 30, 2014 05:54pm
Wah Re Govt. Acha Bewaqoof banaya logon ko!!!!
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Dec 30, 2014 05:58pm
Nation is being deprived of benefits from PTI dharna.
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Dec 30, 2014 06:10pm
Imran please come back. Reverse trend is starting to set in.
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Dec 30, 2014 06:23pm
All that bravado shown by the pmln govt. disappears as soon as the pressure from the opposition is gone. Should be pretty clear to all now that it was the pti that caused the reduction in prices. Pmln is just here to fill there pockets
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Dec 30, 2014 06:23pm
Dharna politics is the solution with this inept and corrupt politicians of Pmnl n
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Dec 30, 2014 06:29pm
Waisay nahin to aisay sahi!!
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Dec 30, 2014 06:30pm
PML N must go
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Dec 30, 2014 06:30pm
This money can now be spent on another "metro". This time in Faisalabad.
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Dec 30, 2014 06:43pm
Typical crony capitalists--will never raise or collect taxes from the rich. Will always throw the burden on the poor. Utterly repulsive lot!
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Dec 30, 2014 06:47pm
strange---how similar are two countries.Our govt. has also increased taxes on petroleum products.
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Dec 30, 2014 07:00pm
Some among us cursed PTI dharna but now they should realize this Govt is in no way ready to facilitate the people.
Appeal to every concerned citizen of Pakistan: When IK rise again against the corrupts, don't miss the opportunity to vent your anger on Noons.
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Dec 30, 2014 07:04pm
Another retrograde and short sighted decision by PML N government.
Cheaper oil prices not only provides relief to millions who have seen their living standards eroded, but will ultimately fuel economic activity and demand that the country so badly needs.
Shame on Nawaz
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Dec 30, 2014 07:06pm
Why doesn't Nawaz announce this himself as well? He was keen to announce the fall in prices!
What a useless govt.
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Dec 30, 2014 07:07pm
Democracy is the best revenge
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Dec 30, 2014 07:11pm
Only after PTI withdrew from protest calls
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Dec 30, 2014 07:31pm
Where are the political parties, particularly PTI and PAT. And where is awaam friendly PPP.
Keep quite and watch tamashaa. now there will be no DHARNAA by great Khan.
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Dec 30, 2014 07:50pm
New Year Gift for the Poor and Helpless people of Pakistan
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Dec 30, 2014 08:00pm
Legal corruption by the government.
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Dec 30, 2014 08:20pm
Imran bhai com back again....we need you
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Dec 30, 2014 08:21pm
Extremely disappointed to learn about this increase. I was looking forward to another 15% slash in petroleum products prices from 1st January 2015. This is not on.
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Dec 30, 2014 08:37pm
Now what PMLN supporters will say? they cannot even blame PTI for this. There is no dharna anymore. These are same people who did not give credit to IK when he forced the govt. to bring down the prices as per international market. Every where in the world the oil prices have dropped significantly.
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Dec 30, 2014 08:48pm
No justice if price go up then it is ruthlessly passed as per formula and if they go down then government changes formula. It's a hopeless country.
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Dec 30, 2014 08:53pm
@Junaid
What's wrong in that ..... Government needs revenue and we do not pay income tax.
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Dec 30, 2014 09:11pm
Wow , Why should we suffer if fbr couldn't meet the target.
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Dec 30, 2014 09:13pm
The government tax revenues have decreased but the government import bill has also substantially decreased. So PMLN needs to stop making fools of the masses. Secondly, now when the prices increase again in international market, the tax rate will not be decreased and hence people will be paying more for the same liter of oil.
Now that IK and his dharna is over, people should be ready for such shameful acts from the corrupt status quo parties.
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Dec 30, 2014 09:23pm
Pakistan needs to repay the billions of dollars of loans that its friends like China is giving it.
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Dec 30, 2014 09:31pm
The economic juggernaught is back !!
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Dec 30, 2014 09:31pm
Dharna against this unjustified GST.
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Dec 30, 2014 09:33pm
Imran Khan should at once start his dharnas.
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Dec 30, 2014 09:37pm
@Javed
If govt needs revenue, then increase the tax base, or increase taxes on the rich.
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Dec 30, 2014 10:05pm
Government wants another Dharna, but this time it will prove a last straw on the camel's back.
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Dec 30, 2014 10:11pm
To all the IK supporters, Why cant Imran Khan attend the parliament and do the same that he did in the dharnas....Parliament is the best place to register your protest if you have 40 or so seats.....No?
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Dec 30, 2014 10:32pm
Whilst I am disappointed with this decision I am surprised that some people here are associating petroleum price reduction a consequence of PTI dharna. Dharna was against PML N government and a demonstration of Imran Khan's desire to be PM at any cost. How ignorant can one get?
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Dec 30, 2014 10:32pm
Good move. Will help bolster govt revenue collection and move toward a sustainable tax:GDP ratio which is quite miserable in Pakistan.
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Dec 30, 2014 10:36pm
This nation soon will realize the need of IMRAN KHAN .
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Dec 30, 2014 10:42pm
Broad day light dacoity.
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Dec 30, 2014 10:45pm
People were already deprived of CNG and now face increase GST on petroleum products. Not time for this decision!
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Dec 30, 2014 10:58pm
@Ajamal
Its the politics of commission. Elementary, my dear Watson.
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Dec 30, 2014 11:13pm
@ Farooq
What a " democratic " government !
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Dec 30, 2014 11:43pm
Go Nawaz Go,
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Dec 31, 2014 12:21am
@Javed the wrong is: instead of collecting income taxes from tax thieves, government is penalizing the people who have already paid their taxes honestly. The formula looks, don't chase the thief, instead make the rest responsible to payback stolen amount.
Well, can understand this policy as the biggest thieves are he himself and his friends who are in his team at some level. I don't live in Pakistan but cant control my emotions on this non sense.
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Dec 31, 2014 12:38am
Here they started again as soon as the dharna is gone. People should never start trusting them.
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Dec 31, 2014 12:42am
@Javed I am glad that a PMLN support also commented on it and it is exactly what i was anticipating. How could anyone justify this? It is government responsibility to collect taxes and if people are not paying they should be punished. This is no way to generate revenue. Please stop supporting wrong
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Dec 31, 2014 12:45am
@Nauman I think you should be commenting on this act of PMLN government rather than IK. I am sure that you are thinking IK is responsible for this?? No??
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Dec 31, 2014 12:47am
@Janu Not-German I am sure IK is responsible for this increase in taxes if he was not responsible for anything else. :p
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Dec 31, 2014 12:52am
Its a ploy. Soon NS will withdraw this increase in GST to prove that he cares sooooooo much for the people.
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Dec 31, 2014 01:03am
O joy! Just when we thought that lower prices were about to drive a boom in the economy comes the news that things are back to their chaotic normal.
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Dec 31, 2014 01:25am
I guess its time to call imran khan back?
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Dec 31, 2014 01:50am
The whole nation suffers because one corrupt and liar finance minister cannot meet his targets. Why should Ishaq Dar worry about performance and care for public when he knows he did not became minister because of public votes. This be sharam became minister only because his son married Nawaz sharif daughter. Ishaq Dar is total incompetent and Nawaz sharif will never hire him for his personal business. Pakistanis remain sleeping
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Dec 31, 2014 01:55am
@Nauman Imran is no longer in the parliament. He and his party members resigned, remember? Besides it's not a parliament but jumma bazar.
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Dec 31, 2014 02:42am
Govt need money for ... their overseas banks and businesses.
Shame on them, they are surely against Pakistanis.
I strongly believe that only PTI is left to be tried, our hope for now, if they act on time.
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Dec 31, 2014 03:23am
In San Francisco, California where I live; we are seeing drops in petroleum prices in the last 3-4 months by almost 55-60% due to drops in prices of raw petroleum worldwide!
Pakistan on the other hand is always on an 'upward' spiral!
Pathetic excuse for governance!
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Dec 31, 2014 05:28am
The only thing not yet taxed is the air (polluted) we breathe.
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Dec 31, 2014 07:12am
If you need extra revenue, then please broaden the tax base to all the elite classes including landlords, politicians and on undocumented business ship-owners.
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Dec 31, 2014 07:17am
An advise to think tanks of government, if they are increasing GST @ 22% on petroleum products, will they focus on availing the benefit of global low oil prices by importing more oil than the allocated budget?
If yes then what is the impact of benefit of bulk imports of oil to the public? I don't understand the logic of increasing GST rate, totally in contradiction of economic principles ! Instead of increasing GST rate, government can avail the benefit of low oil prices by importing more oil than the allocated import budget and fullfil the domestic needs plus our local oil production also plays a part in the industrial cycles !
Senseless decision !
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Dec 31, 2014 07:26am
@Munz
We have governments which mostly comprise persons devoid of any shame and integrity. Thats our misfortune.
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Dec 31, 2014 07:35am
@Abdul
You are right. Parliament is a jumma bazaar - of mostly corrupt, inefficient and shameless people.
Gen. Ayub Khan, giving reason for imposing martial law in 1958, had said that the country had gone to the dogs. I wonder what he would have said about the present lot in the assembly.
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Dec 31, 2014 08:43am
Give with one hand and take back with the other hand - what a perverted strategy against the people. Come on TV and announce it to the nation yourself Mr. PM.
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Dec 31, 2014 09:25am
NS had announced a fortnight back that prices of petroleum products would be reduced further. He has gone back on his words as usual. What is his credibility before the nation ?
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Dec 31, 2014 11:04am
@SYED ADNAN SHAFQAT
There are no think tanks in the government, only empty minds occupied with how to make money in the shortest time.
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Dec 31, 2014 11:19am
if you think 30 people sit in was the reason govt reduced pricing its a fools dream the only reason they did it because the saudis are now gonna take the prices up and the govt will stand innocently that they did decrease it but now the market has gone up. plz be a bit sensible rather than dharnatic
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Dec 31, 2014 11:23am
Thank you Nawaz Sharif and PML. I can't wait to donate my hard earned money to your lavishing lifestyle.
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Dec 31, 2014 11:40am
@Imran :I was not in favour of dharna ,but see as dharna gone gov is ripping the nation with his hard and cruel policy.
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Dec 31, 2014 11:42am
Once the reduction in POL prices was announced by the honorable PM himself at peshawar , how come the public announcement can be reverted , bizarre ? . A , logical conclusion can be drawn , that politicians are not only hypocrites , whoopers but fall in the classic categories of shysters, as well . May Allah guide them the right path . Aameen !
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Dec 31, 2014 01:45pm
Hence proved...Pakistan government does not want to transfer the benefits to its people.
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Dec 31, 2014 02:05pm
I love this country full of surprises.
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Dec 31, 2014 03:31pm
look towards India,they benefited from these low prices of petroleum products, even the Indian currency is 63/1doller much higher than Pakistani currency that is known as saving the country,, in India 1litre of petrol costs 71rs against the Pakistan same costs 80rs
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Dec 31, 2014 03:54pm
PTI should stage another DHARNA to control the PMLN govt's stupid anti-people policies........Govt only understands the language of DEMONSTRATION...............PMLN govt is not a pro-people and people-friendly govt..............After the increase in GST all prices will increase.................it will make our lives miserable.............
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Dec 31, 2014 04:07pm
Khan Sahab please come back.
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Dec 31, 2014 04:50pm
@arshidfazil
You are right but we as a nation want freebies . Look at the comments.
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Dec 31, 2014 10:50pm
An old tactic by Munshi Jee. Collection of revenues through heavy taxes on poors!
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Jan 01, 2015 02:33am
I hope now you people know what was the importance of IK,s dharna.
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Jan 01, 2015 12:41pm
If International price reduction in oil is followed, per liter should be less 56 Rupees.
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Jan 01, 2015 04:12pm
@Muhammad Irshad
Whatever price reduction had been ceded by the government on previous two occasions, it had only been due to the sit-in by IK and his PTI. If the pressure generated by IK had not been there, the price reduction would have been very nominal.
Pervaiz Rashid had said after the first substantial reduction in price that it would have been more had there been no dharna. Now it is very clear how adamantly and arrogantly the government would have acted on the issue if IK had not staged the prolonged sit-in.
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