ISLAMABAD -  The Senate standing committee on finance and revenue on Wednesday expressed displeasure on the bureaucracy’s move to enhance general sales tax (GST) on high-speed diesel (HSD) and petrol without getting approval from the Prime Minister and federal cabinet.

The Federal Board of Revenue (FBR) on Tuesday increased the GST rate on high-speed diesel (HSD) and petrol to 40 per cent and 23.5pc respectively to generate windfall revenues for the government by not passing on the benefit of a fall in international oil prices to consumers. The Senate committee, which met under the chair of Senator Saleem Mandviwalla, noted that how bureaucracy could enhance taxes sans approval of the Prime Minister and federal cabinet.

“Sales tax on petroleum products could not be increased without approval of the competent authority,” said Senator Mohsin Laghari. He further said that FBR’s decision of increasing taxes on oil products deprived people from the lower prices of HSD and petrol.

Mandviwalla said that Oil and Gas Regulatory Authority (OGRA) should determine oil prices in the country. The government should abolish OGRA if government fixes petroleum products prices, he added.

The committee members and FBR chairman Tariq Pasha exchanged hot words on the issue.

Chairman Committee Senator Saleem Mandviwalla said that Chairman Senate has asked the FBR to provide tax details of Sharif’s family in the committee, which was presented in the Joint Investigation Team (JIT) that probed Panama papers case. He further said that Chairman Senate has asked the FBR to provide the aforesaid record. Chairman FBR said that they would present the record to the committee.

Chairman FBR Tariq Pasha informed the Senate standing committee that government had missed the tax collection target by Rs259 billion during previous financial year 2016-17. The target was missed due to lower taxes on oil products, seeds and fertilizers. He informed the committee that FBR had collected Rs3362 billion during the year 2016-17 as against the original target of Rs3621 billion, which was later revised to Rs3521 billion. Despite missing the target, the collection had shown growth of 8 percent on yearly basis, he added.

Sharing details, Pasha informed that FBR had suffered shortfall of Rs111 billion due to reduced General Sales Tax (GST) on oil products, Rs16 billion due to reduced GST on fertilizers and Rs7 billion due to lesser tax on seeds. 

The committee also discussed the recent rupee depreciation against US dollar in a single day. Governor State Bank of Pakistan Tariq Bajwa said that they could not share the reasons of rupee depreciation in the presence of media, as it would lead to speculations for dollars value. Later, the committee held in-camera session on this issue.

Deputy Governor Riaz Riazuddin, who was acting governor when dollar value was increased, told the committee that there was no pressure from the government on it.

Committee chairman Senator Saleem Mandviwalla said that government is trying to control the dollar value. He further said government has artificially controlled the dollar value.

The Senate standing committee on finance and revenue was informed that Auditor General of Pakistan had conducted audit of cellular companies including PTCL during 2013-14.  The officials informed that there were some issues relating to withholding tax and Federal Excise Duty. We had presented the report in the Public Accounts Committee, they added.

The committee has also discussed the role of State Bank of Pakistan in JIT that probed Panama Papers case. Chairman committee asked from the Deputy Governor SBP whether they received directions from ministry of finance regarding Panama Papers case. However, the Deputy Governor SBP refused it. The PML-N Senators said that committee should not discuss the issue as Supreme Court had already announced its decision on case.