ISLAMABAD - The Oil Marketing Companies (OMCs) and petroleum dealers have jacked up the prices of petroleum products by up to Rs 2.70/litre across the country owing to hike in GST on petroleum products and supply of the products to non-registered companies.
Sources in oil sector told this scribe that inflation-hit masses should get ready to bear another jolt as the federal government, in a hoodwinking measure, has imposed 19 per cent GST, instead of 17 per cent, on the petroleum products on the supply of POL products to non-registered companies in the country. And, owing to this hike in GST, OMCs and petroleum dealers have started fleecing the consumers by jacking up per litre prices of POL products by up to Rs 2.70 across the country.
The public, which had high hopes from the new government, got disappointed on June 12 as the new federal government tabled its first budget and increased GST ratio by one per cent while POL products prices soared up by Rs 1.35/litre across the country due to that impact of GST increase. Even, a notification of increase in prices of petroleum products was issued by the petroleum & natural resources ministry following 1 per cent raise in the GST. Though public, political parties staged protest demonstrations against the raise in taxes and asked the government to withdraw increase in the levy yet the heat of public anger and miseries could not be felt by incumbent government.
Background discussions and interviews with energy experts revealed to this scribe that the government had increased GST to 19 per cent instead of 17 per cent on petroleum products and supply of POL products to non-registered companies in a really smart way. They said that fleecing innocent over-burdened masses through hoodwinking measure is a rare incident in the history of the country.
“Yes, owing to 100 per cent direct collection of GST on POL products from the consumers, the experts at finance division imposed 19 per cent GST instead of 17 per cent on POL products over the supply of POL products to those companies which do not have registration numbers,” an energy expert said, adding that the new federal government, in a tricky way, has imposed 19 percent GST instead of 17 per cent GST if the Finance Bill 2013 is read carefully.
Surprisingly, the experts were of the opinion that since 95 per cent petrol pumps located in different parts of the country are non-registered, so the babus at finance division devised this hoodwinking measure and resorted to fleece the masses with billions of rupees by jacking up ratio of GST for non-registered companies. And, due to this increase, per litre prices of petroleum products have been increased for third time in a single month after June 13 across the country.
Finance Bill 2013 said that sales tax act, 1990 clause 3(2)(a) seeks to amend section 3 to enhance rate of sale tax from 16% to 17% and charging further tax @ 2% on taxable supplies to a person who has not obtained registration number. Enforcement through finance bill 2013 is effective from June 13, 2006.
“It is hereby declared accordingly in terms of section 3 of the said Act that it is expedient in the public interest that the aforesaid provisions shall have effect on the 13th June, 2013,” said declaration under the Provisional Collection of Taxes Act, 1931 (XVI OF 1931).
As per recent hike owing to increased ratio of GST, the petrol price has further gone up by Rs 1.72/litre, diesel Rs 1.80/litre, high octane blended component (HOBC) Rs 2.70/litre, while kerosene oil Rs 1.60/litre and light diesel oil (LDO) Rs 1.54/litre across the country.
Shockingly, in a single month of June after third time hike in the per litre prices of POL products, the price of petrol has reached Rs 102.35/litre, high speed diesel (HSD) Rs 107.30/litre, HOBC Rs 139.10/litre, kerosene oil Rs 96.19/litre and LDO Rs 91.44/litre.
When contacted, Mariam Shah, a spokesperson of Pakistan State Oil (PSO), confirmed this scribe that PSO was charging 19 per cent GST from non-registered companies over the supply of POL products as per directive of the Federal Board of Revenue (FBR).
“Yes, sales tax is being passed on with effect to the FBR directives, she said, adding that however PSO has written a letter to the FBR, petroleum ministry and the director general (Oil) requesting the government to review its decision as recent changes in law would directly affect the consumers and a crisis of petroleum products might take place in near future at any time in case if petroleum dealers decline to purchase the POL products owing to differences in oil prices.
Similarly, All Pakistan Petroleum Dealers Association president Chaudry Zafar Elahi said we (dealers) have started collection of 19 per cent GST on POL products from the public already suffering due to sky rocketing prices of petroleum products. He said it is unaffordable for the petroleum dealers to bear extra burden of increased GST while not a single petrol pump is registered with the government.
“We have sought two months time from the minister of petroleum & natural resources for the registration of non-registered petrol pumps,” he said, adding that petroleum minister Shahid Khaqan Abbasi has assured us that he would resolve the matter and would also raise the issue with the finance minister Ishaq Dar for immediate solution.