ISLAMABAD, Aug 23: Around 90 per cent of general sales tax (GST) of the total collection has been raised from just 15 items during the year 2006-07 over last year, indicating a narrow base of the tax.

The major players include telecom services, POL products, natural gas, sugar, cigarettes, services, LPG, cement, beverages, auto parts, iron and steel and gases and acids, according to the annual report of the Federal Board of Revenue (FBR) released here on Thursday.

Of 15 major commodities, 11 have recorded a positive growth, and there has been a decline in gross receipts on account of two utilities, cement, and motor cars.

The detailed analysis of individual sectors reveals that the major stumbling block has been the energy sector where gross collection of Rs13 billion turned into negative net receipts due to unprecedented refund claims and payments during fiscal year 2006-07.

Similarly, decline in collection from cement continued throughout the year despite a double-digit growth recorded in federal excise receipts from the source.

Whereas downward revision in its retail-sale price of cement could be one of the reasons for this outcome, but a thorough investigation is needed to find a ‘reasonable’ explanation for the decline.

Finally, decline in tax collection from motor cars has been due to slowdown in one of the major brands of the industry, which was responsible for overall lackluster performance.

On the positive side, continued robust growth in collection from the telecom sector has largely compensated shortfalls originating from electrical energy, cement, natural gas and motor vehicles.

Among leading resource generators, the contribution of telecom and petroleum sectors has been close to 38 per cent.

Within the telecom sector, the 37.1 per cent growth in collection has been due to ever-escalating demand for telephony and fierce competition among service providers.

Not only that the number of mobile phone subscribers has increased by about 2.4 million since July 2006, the tele-density has also increased from 22.2 in June 2006 to 40.6 in June 2007. Furthermore, the land area coverage has also reached 73 per cent in recent months.

Besides telecom sector, strong growth in sales tax has also been recorded in iron and steel, sugar, cigarettes, services (hotels, customs agents and couriers, etc.) auto parts and gases and acids. This performance is consistent with the overall growth in the country and sustained domestic demand.