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The Supreme Court observed on Wednesday that the government has resorted to increasing the general sales tax (GST) on petroleum products by as much as 25 per cent even as crude oil prices slump in the international market.
Hearing a suo motu case on the matter, the court ordered the government to submit a report within a week detailing the various taxes imposed on petroleum products, and their comparison with global and regional standards.
"Whenever prices fall in the global [oil] market, sales tax is imposed [in Pakistan]," Chief Justice Mian Saqib Nisar remarked during the hearing, asking why the government tends to levy increased taxes on petroleum products when it should be providing relief to the public.
See: Petrol, diesel prices go up
"You jack up the sales tax when prices of crude oil fall," the CJP said, addressing Additional Attorney General (AAG) Nassar. He observed that GST has been raised in the past to as much as 25pc.
Justice Nisar chided the AAG when he contended that petrol prices in Pakistan were the lowest in the region, including India.
"Don't compare the prices with India. Do we have any comparison with India, say in the field of IT?" the CJP asked rhetorically.
The AAG informed the court that three types of taxes are collected on petroleum products: customs duty, petroleum levy and sales tax. In response to the CJP's question, he revealed that 11.4pc GST was currently being charged.
Two profit margins, including that of oil marketing companies (OMCs) and petrol pump dealers, are gained through the sale of petrol and diesel, he said.
Justice Ijazul Ahsan asked AAG Nassar why petrol prices are not reduced in Pakistan even when crude oil prices fall from $100 a barrel to $50. "We don't decide the prices based on crude oil," the AAG responded.
CJP Nisar remarked that the court will order a complete audit of petrol pricing in the country.
Before adjourning the hearing for a week, the bench ordered relevant ministries and departments to file written replies explaining the imposition of various taxes on petroleum products.
Comments (25) Closed
We are blessed to have institute like SC who is virtually taking care of each and every misdeed of government. I think we just need only institute like SC nothing else
Good decision by CJP
Good job CJP.
Governments in India an Pakistan will not let go of this cash cow. In India excise duty on petrol has been increased 14 times to keep the price high when international prices were falling. The only justification can be to curtail demand , particularly from vehicle users.
Sc is unaware, global prices is rising.
Very Nice. Good move in the public interest.
The present judiciary is a beacon of hope for the people of Pakistan, which is in oppressed by the current GOP.
Govt is not interested in issues related to general public ... there issue is only how to protect convicted NS
Why are sales taxes increasing? Import taxes and sales taxes are the only way any government can earn money if income tax revenue is low.
Once again, excellent decision in the name of true justice, transperency, checks and balances as well as due process of law by the wonderful Supreme Court of the Islamic Republic of Pakistan. Well done and keep it up.
But its not the role of SC to decide. Its a policy decision
this is not SC duty to decides taxes, until somone complaint. SC few month back take notice an make judicial commision head by Justics ameer hani for water problem in Karachi. Can somone info what progress till now?
long live CJ
This is not SC job. In India too prices are much higher but we do not expect SC to interfere. Other political parties are there opposition is there to highlight the issue and debate on it Why SC?
Who says global prices are falling? Global prices are in fluctuations according to situations in Syria and Yasmin.
Thanks SC and CJP. Pakistani nation salutes you.
The sales tax is the largest revenue generator for the govt. It pays for the salaries of the executive, judiciary and armed forces. It uses the funds to build roads, libraries, schools and other free services. It's not judiciary,s job to question why there is a sales tax on Mobil phone. My T-Mobil bill in the US includes 15 to 20 percent taxes and the courts never questioned the govt for the reasons for the various taxes. If the govt is short of funds, it has to borrow funds domestically or from the international banks at a high rate. If we keep questioning and try to prevent the govt to raise funds, lot of people will not paid for their services.
SC is unaware that global prices are rising. But SC should also see why so may Direct Taxes. Why there is no tax on Agriculture as well as no tax on Pakistan Forces commercial activities.
Great CJP. Salute you sir for your care in every aspect of our miserable life made by these corrupt politicians
Love you "Nisar sb" only a man in the country who is doing good for the country and layman our politicians just telling a lie and corrupt with a lie and corrupt people of Pak are voting them and through the ragging, they win the election for their ill-gotten looting the money via ambush such as increasing tax on Mob oil, every basic thing which use by the underprivileged. Education, health, water, and electricity also vanish or annihilation
Global prices recently have been going up and not down. As for the increase in sales tax rates, isn't any government permitted to do as it pleases while in power? The public in general has to suffer but who cares for their welfare?
Looks SC is behind times and not keeping up with the price of oil. It’s going up in the last few months and expected to go up higher with Iranian crises
For sure this is a matter for Executive branch of the state. The honourable court is overreaching its domain. Refrain.
What about CNG mafia? Has anybody attempted to see how CNG cartel is increasing prices of gas quietly?
Courts have no right to decide tax percentage on anything and it is government prerogative.