TUESDAY DECEMBER 13: ECC allows 0.2 million tons of urea import

ISLAMABAD: The Economic Co-ordination Committee (ECC) of the Cabinet Monday decided to import 200,000 tons of urea for the Rabi season and constituted two committees for removal of 16 percent sales tax on agriculture tractors and purchase of 200,000 tons sugar from Pakistan Sugar Mills Associations (PSMA). Sources said the PSMA Chairman was also present in the ECC meeting presided over by Finance Minister Dr Abdul Hafeez Sheikh to present the case of sugar industry.
He wanted the government to purchase sugar from the mills at Rs 58.9 per kg but the officials of commerce ministry opposed the rate saying that wholesale price was much lower than the price proposed by the industry. An official said that Rs 58.9 per kg price also included Rs 3.5 per kg extra charges of Trading Corporation of Pakistan and PSMA.
The finance minister reportedly constituted a committee on the issue of extra charges and wanted participation of all the sugar mills in the process. Hafeez also wanted complete adherence to the PPRA rules in sugar purchase. The PSMA reportedly made 100 percent payment in advance. According to an official, the Finance Minister has convened the next ECC meeting on Thursday and directed the committee to submit the report about the price as well as of sugar situation in the country.
The Federal Board of Revenue opposed the Ministry of Industries summary for removal of 16 percent sale tax on tractors contending that there is a uniform tax policy to bringing all the sectors into the tax net and exempting tractors from tax would be harmful for the policy. Sources said that only advisor to the Prime Minister on agriculture, Kemal Majeedullah, was against withdrawal of 16 percent sale tax on tractors.
According to a statement, the ECC after detailed deliberations on urea situation and supply of gas for its production decided to import 0.2 million tons of urea for the Rabi 2011-12. The ECC also discussed in details the summary moved by the Ministry of Industries, which proposed purchase of 0.2 million tons of sugar from PSMA and constituted a committee to look into the sugar situation in the country, quantity of the sugar from different mills and their respective price, the additional expenses as per the tender terms, in finalising the lifting of sugar from the PSMA, and the role of TCP.
Hafeez was of the view that the rest of the sugar mills who are not participating in the tender should also be invited so that there may not be any complaint in future. The ECC also constituted a committee on the proposal of Ministry of Industries for the removal of 16 percent sales tax on agriculture tractors. The committee headed by the Minister for Industries and comprising Secretaries Revenue, Finance, Industries and Adviser to the Prime Minister on Agriculture, will submit its report to the chair before the next ECC meeting expected this week.
The summary by the Ministry of Industries stated that increase in the prices of tractors has made it difficult for farmers to purchase new tractors and convert traditional farming into mechanical farming for high yield, especially when cost of other agriculture inputs has gone up substantially. Furthermore, Zarai Taraqiati Bank Limited (ZTBL) has also not been extending loans for purchase of tractors since April 2010, creating another impediment for farmers. The production of tractors since March 2011 has also declined drastically from over 72000 units to around 20000 units per annum.
The meeting was attended by Senior Minister for Industries Chaudhry Pervaiz Elahi, Ghulam Ahmad Bilour, Minister for Railways, Ghous Bux Mehar Minister for Privatisation, Anwar Ali Cheema Minister for Production, Mir Changez Khan Jamali Minister for Science and Technology and secretaries of all the concerned ministries and heads of corporations.