Government increases GST by 1 per cent, possibility of major increase in petroleum prices today

ISLAMABAD: On Tuesday night, the federal government raised the General Sales Tax (GST) on cigarettes by 1 per cent with immediate effect. The decision has been taken to complete the set of conditions by the International Monetary Fund (IMF) to release the next tranche of loan programme.

As per the new notification by the Federal Board of Revenue (FBR), the standard GST rate has been hiked from 17 per cent to 18 per cent. With the decision to hike the GST, the Federal Excise Duty (FED) has also been increased on cigarettes. FED on expensive brands has now reached Rs16.5 from Rs6.5 per cigarette (153 per cent increase). On cheaper brands, the FED has touched Rs5.05 from Rs2.55 (98 per cent surge).

The notification from FBR came after the approval of finance bill from the cabinet. The finance bill will now be presented to parliament for approval on Wednesday. President Dr Arif Alvi showed reservations about the finance bill, upon which the government decided to take it to the parliament for approval as a mini-budget. The bill will be presented in National Assembly and Senate in different sessions on Wednesday (today).

Petroleum prices to increase today
Meanwhile, the government will announce the new prices of petroleum products today. The government may impose a significant hike in the prices of petroleum products by following the current situation of the dollar and the IMF conditions.

Analysts believe that from February 16, 2023, the price of petrol will be over Rs280 while high-speed diesel will be available at Rs290 per litre. Earlier, the Oil Companies Advisory Council sent a protest letter to the government over the minimum increase in the prices of petroleum products compared to the global market.

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