GST (General Sales Tax) is the largest tax on most electricity bills in Pakistan. It is a federal tax collected by DISCOs and paid to the Federal Board of Revenue (FBR).
What GST is charged on
GST is calculated on the taxable value of electricity supplied, which generally includes:
- The cost of electricity (units × rate)
- Fixed charges where applicable
- Adjustments such as FPA and QTA, according to current rules
The standard sales tax rate in Pakistan is 18%, and this is the rate commonly applied to electricity. Certain categories or specific relief packages can have different treatment, as notified by the government.
Simple example
Suppose the cost of electricity plus applicable adjustments for a month is Rs 10,000. GST at 18% would be about Rs 1,800, giving Rs 11,800 before any other charges or arrears. Real bills may calculate GST on slightly different components, so use this only to understand the idea.
Additional sales taxes
Some commercial and industrial consumers may also see:
- Further tax: an additional sales tax for consumers not registered for sales tax.
- Extra tax: an additional charge on certain commercial consumers who are not on the FBR's Active Taxpayer List (ATL), depending on bill amount.
Registering for sales tax and becoming a filer can remove these extra amounts for businesses.
Can residential consumers avoid GST?
No — GST applies to residential bills as well, though lifeline consumers and very low-consumption households have received exemptions or reduced treatment in some decisions. The most effective way to reduce GST is to reduce the taxable amount by using fewer units.
Can GST be claimed back?
Registered businesses may be able to claim input tax adjustment for sales tax paid on electricity used in taxable business activity, subject to FBR rules. Consult a tax adviser for your situation.
Checking GST on your bill
- Find the cost of electricity and adjustments.
- Multiply by the applicable rate.
- Compare with the GST line.
Small differences can come from rounding or from which components are included. Large differences should be raised with your DISCO.