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Thursday, May 23, 2024

Removal of 17 percent GST on Solar Panels

17 percent general sales tax on solar panels  imposed by the PTI government was removed by the PM Shehbaz Sharif.

In an attempt to promote power generation by adopting alternative sources of energy to reduce oil import bill standing at $20 billion, 17 percent general sales tax on solar panels  imposed by the PTI government was removed by PM Shehbaz Sharif.

According to local media, Pakistan’s import bill touched $65.53 billion in March FY22 from $44.73bn over the subsequent months of the last year, showing a rise of 46.51 per cent. To cope with the current challenges, it is essential to take effective measures. Previously, PTI government imposed 17 percent GST on solar panels and inverters which threatened the core of the National Renewable Energy Policy, aiming to attain a share of 30 percent of renewables in energy mix by the year 2030.

Moreover, Planning Commission prepared an Annual Plan 2021-22 focusing on the principal mechanisms of the energy mix. In the entire chapter, the word ‘solar’ is noted by its non-existence. Although, the target to raise the share of solar in the energy mix to 1.7 percent was indicated in the annex to the chapter which seemed to be an impossibility by the analysts previously. However, current removal of 17 percent GST can be a vital step to stimulate “green energy” especially when the country has great potential of alternate energy sources in the areas of Sindh, Balochistan, and Bahawalpur, as mentioned by the PM himself.

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Furthermore, businessmen and industrialists appreciated that the removal is announced in response to their demand of proper supply of gas without affecting the needs of consumers. Also, the PM promised that the latest decision of banning imported goods will not harm the importers who had booked and paid for their orders to the vendors already.

To sum up, Pakistan is behind India in the domain of information and technology which has soared to a $200 billion export market, in comparison to $1.5 billion of Pakistan. Construction of IT towers throughout the country, the PM also stressed the necessity of transparent and coordinated policy to form export industrial zones which will ultimately improve the trade deficit of the country, offering free-land to the exporters by one-window procedures.