ISLAMABAD: The government has reached two options for decreasing the price of HSD on the wishes of the Chief Justice of Pakistan (CJP) Saqib Nisar.
The government detected Oil and Gas Regulatory Authority (Ogra) was charging 31 percent general sales tax (GST) on high-speed diesel in summaries forwarded to it as per the guidance of the finance ministry, even if the published GST rates were on the lower side, reported Dawn.
A senior official said the government was willing to decrease the GST to 24 percent or 17 percent and the Supreme Court is going to consider these options over the weekend.
As per sources, the HSD price for July was recommended based on 31 percent GST, whilst the real notified rate was 24 percent.
Ironically, the Petroleum Division recommended the finance ministry to determine HSD prices based on 24 percent GST, which was rebuffed by the interim finance minister and GST was jacked up to 31 percent.
The GST on other petroleum productions was also raised to standard rate of 17 percent from 12 percent previously.
According to the official, the Petroleum Division had finalized two options for HSD to appease the apex court taking into consideration its higher inflationary effect and preserve the prices of other products with 17 percent GST.
Also, the government was presently amassing Rs28.23 per litre on HSD on the premise of 31 percent GST, which will be reduced to Rs21.86 per litre if GST rate decreases to 24 percent, said the official.
Similarly, tax on HSD would fall to Rs15.50 per litre if 17 percent standard GST rate became applicable.
It is projected the total revenue loss would be around Rs4 billion on basis of a decrease in GST rate on HSD from 31 percent to 17 percent.
He expressed hope the apex court would agree to a standardised 17 percent GST for all petroleum products.
At current rates, the government hopes to fetch Rs55 billion per month on all POL products which includes Rs22 billion from petrol, Rs30 billion from HSD and Rs500 million from other products.
