ISLAMABAD: The ghee and cooking oil industry has approached Prime Minister Imran Khan against new taxation measures taken under the Finance Bill, 2021, which would result in price increase by minimum Rs13 per kg from July 1, 2021.
According to a communication of the Pakistan Vanaspati Manufacturers Association (PVMA) to the PM here on Thursday, the industry has warned that the prices of ghee and cooking oil will increase maximum up to Rs18 per kg as a result of additional taxation on the industry.
The letter said that the industry intends to submit as how the price of ghee shall jump minimum by Rs13/kg, due to taxation measures incorporated in Finance Bill 2021-22.
First, vide section 3(I) of the Sales Tax Act 1990, three percent further tax has been imposed on sales made to the un-registered persons.
Second, the section 8B of the Sales Tax Act 1990 allows only 90 percent input tax adjustment to the manufacturers on their sales, other than public listed companies.
Third, the withholding tax (WHT) @ 0.1 percent and 0.5 percent has been imposed on sales tax made to wholesalers/distributors.
The cumulated impact will result into increase in prices of ghee and cooking oil by Rs13 per kg and may go on as high as Rs18 per kg with effect from July 1, 2021.
This unprecedented increase in taxes will automatically translate into record inflation figures periodically issued by the Federal Bureau of Statistics.
In the light of foregoing may we suggest to re-consider above proposals by eliminating the additional taxes introduced through recent Finance Bill in larger public interest, the PVMA added.
Copyright Business Recorder, 2021