With imposition of CED the government, at last, has brought at par the cooking oil and ghee units in Fata and Pata with the units working in other parts of the country.
This was the demand of Pakistan Vanaspati Manufacturers Association.
The Government has now decided that Fata and Pata units will also have to pay 15 percent central excise duty.
The budget has also increased duty on crude palm oil from Rs 9,000 to Rs 9,500 per ton, although it was not mentioned in the budget speech of the Finance Minister.
The increase in duty is reported to have been made applicable to the entire ghee industry except the Avian Oil and Fats (edible oil refinery) which has been allowed to import crude palm oil at previous duty level of Rs 9,000 per ton.
According to PVMA sources this amendment is discriminatory. According to them, there cannot be two levels of duty within the same industry. In this connection, the PVMA is reported to have called an emergency meeting on June 17 to protest against this move.
The Edible Oil Refinery is also a member of PVMA as a ghee producer. The industry wants one rate of duty for all importers, irrespective of ghee industry, commercial or refinery.
The budget has also given certain concessions for the Oleo chemicals, stearic acid and toilet soap industry and they have been allowed to import RBD palm stearin, crude soya oil, crude and refined coconut oil and palm acid oil at the rate of special duty of 10 percent only. This special exemption is only for the specific industry and is not meant for ghee industry.
For the ghee industry the budget has changed the regime from sales tax to central excise duty. From the clarifications received after the announcement of the budget, it has been revealed that although the Government has reduced the sales tax from 20 percent to 15 percent on all commodities. For the ghee industry it replaced the Sales Tax and has imposed 15 percent Central Excise duty, which will be charged and levied at the Custom Stage as well as at the production stage on the basis of Value Addition Tax (VAT).
Industry sources believe that this move will help in the proper documentation and there will be no misuse, as refunds will not be involved. The Government is of the view that this new regime of tax will generate more revenue.
By imposing 15 percent sales tax on the locally produced cottonseed oil, the government has brought at par all imported and local seed oils. This on the one hand will generate revenue and on the other there will be level playing field for everyone.
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