ECC exempts ethanol from sales tax

Pakistan’s Economic Coordination Committee (ECC) has exempted the ethanol component of Ethanol 10 (E10) blended fuel from the country’s General Sales Tax (GST). The move was part of an effort to curb the increase of sugar prices in the country. The ECC said it would maintain the price of sugar in stores at PkRs38 (US$0.46) per kilogram for a few months to keep prices in the open market low. According to media reports, the price had gone up to as much as PkRs60 (US$0.73) in some cities. Pakistan’s GST is 16% of the price. If ethanol were not exempted from the tax, the price of fuel would go up considerably. (July 15, 2009)