Agricultural machinery: continuation of ST zero-rating questioned

A question has been raised about the continuation of sales tax zero-rating facility on import of agricultural plant and machinery under SRO.68 (I)/2009, as industrial machinery and equipment is subject to 17 percent sales tax under the taxation measures to generate additional revenue in 2010-11.
Tax experts told Business Recorder here on Wednesday that the government has imposed 17 percent sales tax on import of industrial plant, machinery and equipment through sales tax SRO 230 (I)/2011. The zero-rating facility on import of plant and machinery was withdrawn through the said notification. However, the FBR has not touched SRO 69(I)/2009, which allows sales tax zero-rating facility on import of plant and machinery for the agriculture sector.
Secondly, SRO 542(I)/2006 allows exemption of sales tax on import of agricultural machinery, equipment and implements including tillage/seed bed preparation equipment, seeding or planting equipment, irrigation, drainage and agro-chemical application equipment, harvesting, threshing and storage equipment and post-harvest handling and processing and miscellaneous machinery.
Within the agriculture sector, there seems to be some kind of discrimination as a few items have been granted sales tax zero-rating whereas other kind of machinery/equipment is totally exempted from sales tax. This is evident from the comparison of SRO.69 (I)/2009 and SRO.542 (I)/2006.
They have raised a question that if the government has withdrawn sales tax zero-rating facility on all kinds of plant, machinery and equipment, what is the rationale behind continuation of sales tax zero-rating facility on import of agricultural plant and machinery?. As industrial plant, machinery and equipment is now liable to 17 percent sales tax, it is not clear why agricultural machinery has not been brought into the sales tax regime.
The industrial importers have also raised a question about the taxability of the agricultural machinery after withdrawal of zero-rating on other kinds of plant, machinery and equipment. On the other hand, if the rationale is to impose 17 percent sales tax on agricultural inputs including pesticides, fertilisers and tractors, then why the FBR has not withdrawn sales tax zero-rating facility on agricultural machinery, they questioned.
However, sources admitted that it is the right of the government to exempt any sector or impose tax. Some experts are surprised that the integral items of agricultural sector have been subjected to sales tax and plant/machinery of other sectors is also subject to sales tax.
The agricultural machinery remained zero-rated and continues to remain exempt from sales tax. According to experts, continuation of sales tax zero-rating facility on the import of agricultural plant and machinery may result in accumulation of refunds. Recently, the facility of zero-rating on plant, machinery and equipment including parts thereof has been withdrawn by amending SRO 549(I)/2008, dated June 11, 2008 through SRO No 230(I)/2011, dated 15.03.2011. These goods will now be liable to sales tax at the rate of 17 percent.