GST on solar panels cuts to 10% from 18%, announces Dar

Deputy Prime Minister and Foreign Minister Senator Muhammad Ishaq Dar on Wednesday said that the digital sales tax on services would remain within the jurisdiction of provinces, while the proposed 18% GST tax on solar panels had been reviewed and revised down to 10% following consultations, reported 24NewsHD TV channel.

Speaking in the National Assembly, Senator Dar stated that after detailed discussions with coalition partners and relevant stakeholders, consensus had been reached on resolving several contentious budgetary issues. As part of the revisions, it was agreed that the imposition of digital sales tax on services falls under the constitutional domain of provincial governments.

“The concerns regarding digital taxation were valid. We held in-depth consultations with all stakeholders, including the Federal Board of Revenue (FBR), and it has been decided that the matter will be clearly addressed in the Finance Minister’s budget winding-up speech,” he said.

Dar further clarified that the earlier proposal of imposing 18% general sales tax (GST) on solar panels had sparked considerable debate. Upon review, it was revealed that 54% of components used in solarization were already taxed under the existing regime, and the 18% tax applied only to the remaining 46%. However, after mutual consultations, we have now proposed reducing the solar GST from 18% to 10%, he announced.

Dar emphasized that tax proposals are essential for revenue generation, and any relief in one area necessitates compensation elsewhere. He pointed out that when the cabinet found the initial proposal of a 6% salary increase for government employees insufficient and raised it to 10%, corresponding budgetary adjustments also had to be made.

“We must move forward collectively. Our approach is rooted in consensus and cooperation,” he said.

Highlighting another key issue, Dar said it was decided to maintain funding for a proposed university in Sindh under the Public Sector Development Programme (PSDP) at Rs 4.7 billion through the Higher Education Commission (HEC).

He also acknowledged valid concerns raised by MNAs regarding the closure of the Public Works Department (PWD) and confirmed that the Pakistan Infrastructure Development Company Limited (PIDCL) would now oversee all federal development projects across provinces.  He said, while PIDCL was initially formed for Sindh, its mandate has now been expanded to oversee development projects across all provinces.

Dar concluded by reaffirming the government’s willingness to address genuine concerns through mutual dialogue and constructive engagement.

Meanwhile, PPP MNA Syed Naveed Qamar thanked Prime Minister Shehbaz Sharif and Deputy Prime Minister Ishaq Dar for accommodating key PPP and Sindh government budget proposals.

Speaking in the National Assembly, Qamar said the government accepted major demands raised by PPP lawmakers during the budget debate. He welcomed the reduction of proposed sales tax on solar equipment from 18% to 10%, aligning with the party’s stance.

He also acknowledged the government’s decision to expand the mandate of the Pakistan Infrastructure Development Company Limited (PIDCL) to all provinces, instead of limiting it to Sindh, effectively addressing another PPP concern.

Meanwhile, legislators from both opposition and treasury benches called for the establishment of Special Agriculture Zones, IT Facilitation Centers nationwide, increased farmer support, and funding for churches and temples to promote economic growth and social inclusion.

Resuming general budget discussions on the fifth day in the National Assembly, Dr Zulfikar Ali Bhatti of PML-N stressed the need to develop rural areas and strengthen the agricultural sector.

He proposed the establishment of Special Agriculture Zones nationwide, equipped with all necessary facilities to enhance agricultural productivity.

He also advocated for providing incentives to farmers. Additionally, he called for the creation of IT facilitation centers in rural regions and the implementation of skill development programs for youth, particularly in these areas, to promote self-sufficiency.

Fateh Ullah Khan of PPP strongly denounced Israel’s aggression against Iran. Drawing attention to the suffering of flood victims in his constituency, he urged the government to provide compensation to those affected.

Awais Haider Jhakar of the Sunni Ittehad Council (SIC) highlighted the challenges faced by farmers and criticized government policies that have contributed to a decline in agricultural production.

Sanjay Parwani of the MQM criticized the government for failing to allocate what he described as even a single penny for the country’s churches and temples in the 2025-26 federal budget.

Abdul Ghafoor Haideri of JUI (Fazl) urged the Deputy Speaker Ghulam Mustafa Shah to issue a ruling demanding strict punishment for the miscreants involved in the attempted abduction of Maulana Fazlur Rehman’s son and called for the immediate arrest of those responsible.

PPP’s Zulfiqar Ali Behan called for the imposition of an agricultural emergency in the country and the removal of taxes on fertilizers to boost agricultural production. He also urged the establishment of a university in Naushahro Feroze.

Chaudhry Mubeen Arif Jatt of SIC called for the immediate withdrawal of the proposed 18 percent GST on solar panels. He also highlighted the hardships faced by farmers, noting that their produce is being sold at prices lower than their production costs.

Chaudhry Riaz Ul Haq of PML-N demanded a review of the Federal Board of Revenue’s (FBR) excessive powers and emphasized the need to lower fertilizer prices.

Ejaz Hussain Jakhrani of the PPP said that the Gambat Institute of Medical Sciences (GIMS) is providing excellent services in liver transplantation. He also stated that the Sukkur-Hyderabad Motorway is a vital need of the people and urged the authorities to pay attention to the project.

MNA Sohail Sultan said that it is the government’s duty to provide relief to the people. He urged the government to increase the monthly income of laborers and suggested including youth programs in the current budget.

Parliamentary Secretary Sajid Mehdi lauded the armed forces and their chiefs for performing outstanding performance against the Indian aggression against Pakistan.

He applauded the former Prime Ministers Zulifqar Ali Bhutto (Late) and Mian Muhammad Nawaz Sharif in their efforts to achieve the honour of first atomic power in Muslim world.

He said that Pakistan is far behind in modern agriculture, lamenting that even we cannot produce is seed of any crop. He linked the development of the country with agriculture sector, adding, we cannot progress unless we develop agri sector.

“Our allocation is much less for research sector” he said and requested the authorities concerned to pay special focus on the agriculture and live stock sectors. “Cotton is major source of economy of any country and Pakistan has much exposure in this crop but unfortunately it is being neglected”.

He said that a small relief was given to farmers in shape of solar power but the government-imposed tax on this facility which is injustice. He demanded to tax free the pesticides and fertilizer.

Syed Shah Ahad Ali Shah of SIC underscored the importance of offering targeted incentives to empower the nation’s youth.

Reporter Rozina Ali