The sales tax on petrol was 1.43% which has been reduced to 0% but the same tax on high-speed diesel has been increased to 7.20% from 6.75%, according to a notification issued by the Ministry of Finance and Revenue.
However, the deduction of sales tax on petrol will not affect the price of petrol for consumers.
The GST has been increased to 8.19% from 6.70% on kerosene oil and 0.46% from 0.20% on light diesel as well.
The GST collected on petroleum sales goes to provinces. The reduction in the GST allows the federal government to increase the Petroleum Development Levy, which goes to the federal kitty.
On November 5, the federal government increased the prices of petrol and high-speed diesel (HSD) by Rs8.
The Finance Division offered a long-winded explanation to justify the price hike but ended up admitting that it was done to maintain government revenue.
