ISLAMABAD: The sub-committee of the National Assembly Special Committee on Agricultural Products has recommended withdrawal of general sales tax (GST) on agricultural equipment and apparatus.
The parliamentary panel met under the chairmanship of Shandana Gulzar Khan, here on Wednesday to discuss concerns of the fertiliser manufacturers of Pakistan Advisory Council, mismatch between input and output GST on urea production; mismatch of GST on DAP, NP, SSP (local manufacturing); allocation of funds for release of GST refunds, payment of pending subsidy amount since 2018, briefing on the disbursement of subsidy on fertiliser under the Covid-19 fiscal stimulus package, and subsidy disbursement mechanism of each province.
Brigadier (retired) Sher Shah, representative of fertiliser sector, said that urea prices are higher in the global market.
There is talk of subsidising gas, said Shah, adding that they pay the highest taxes.
The government has to pay their Rs52 billion under the head of refunds and subsidies, Shah added.
He further said that fertiliser sector’s entire business is being run on credit.
The government gave a subsidy of Rs252 billion on gas to the sector during the last 10 years, said Shah, adding that the fertiliser sector has given benefits to the people to the tune of Rs604 billion.
He said that farmers are charged less for GST and more is paid to the government.
Secretary National Food Security and Research said that they opposed the tax hike.
Agriculture should be the first priority in the budget, said Khalid Khokhar of the farmers’ union.
Minister for National Food Security and Research Syed Fakhar Imam said that whenever the government tried to give relief to the farmer, middle men come as hurdle.
“We all want the farmer to get subsidy,” said Imam, adding that the government is introducing a new system to deliver subsidies to the farmers.
There are 8.2 million farmers in the country.
Efforts are being made to provide subsidy to all, said Imam, adding that they hoped that the provinces would improve the agricultural system.
He further said that 47 percent of seeds in Pakistan are unregistered.
All electricity theft is collected from farmers, said Khokar, adding that the GST has been imposed on agricultural apparatus.
He further said that GST is also proposed on food items in the budget.
The committee recommended abolition of GST on agricultural apparatus and equipment.
Copyright Business Recorder, 2021
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