Sources said that government had also planned to increase GST on the commodity in the last budget 2011-12, however the decision could not be taken on that time due to pressure from certain quarters. It might be recalled here that government has decreased GST rate on sugar few years back in order to reduce commodity price that went up to over Rs 100 per kg.
Sources said that government is of the view that country has sufficient sugar stock, therefore prices would not go up with the increase of GST as happened in the past. Sugar price could increase by Rs 4 to Rs 6 per kg due to proposed decision of increasing GST on the commodity. Sugar price in the country is around Rs 60 per kg at present.
Meanwhile, the Federal Board of Revenue (FBR) is facing loss of Rs 24 billion annually in terms of revenue collection due to reduction of GST on commodity. Sources were of the view that government is likely to abolish regulatory duty on the import of some items in the budget (2012-13). The government is likely to abolish federal excise duty (FED) on 5-6 different kinds of oils in budget (2012-13).
The government is contemplating not to impose any new tax in the upcoming budget. The government is planning to fix revenue collection target at over Rs 2.3 trillion for the financial year to come 2012-13.