On the ‘do more’ demand of the International Monetary Fund (IMF), thefederal government accepted more stringent conditions under whichsales tax on petroleum products and tax exemptions for theagricultural sector are likely to be removed.
According to the LoI, 10.5% sales tax will be imposed on petroleumproducts from October this financial year. The imposition of sales taxon petroleum products may increase the price by Rs 20 per litre.
If the tax targets are reduced, the sales tax exemption for theagricultural sector will be removed. The IMF has been assured thatsales tax exemptions on agricultural drugs, fertilizers and tractorswill be removed.
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