- Will import 0.6 million metric tons instead of the previous target of 0.5 million tons through TCP as strategic reserves
ISLAMABAD: The Government has decided to import 0.6 Million Metric Tons (MMT) of sugar instead of the previous target of 0.5 million tons through Trading Corporation of Pakistan (TCP) as strategic reserves.
The sources said the government, while ratifying the decisions of the ECC titled ‘import of sugar for strategic reserves’, has decided that with the stipulation the ECC decision of January 20, 2021 shall be modified to the extent that the total quantity of white sugar to be imported through TCP, if and when necessitated, during the current season shall be 600,000 MT instead of 500,000 MT. The sources said the federal government has also excluded sugar from third schedule of Sales Tax, 1990, aimed at reverting back ex-mill price of November 30, 2020.
The Federal Board of Revenue (FBR) apprised the Cabinet that before Finance Act, 2021, sugar was chargeable to standard rate of 17% and the price of domestically produced white crystalline sugar was fixed at Rs. 60 per kg under SRO 812(1)/2016. Through Finance Act, 2021, sugar was added in the Third Schedule to the Sales Tax Act, 1990 by insertion of S. No. 50 of Third Schedule.
By virtue of this provision, sales tax @ 17% was chargeable on retail price of sugar except where it is supplied as an industrial raw material to pharmaceutical, beverage and confectionery industries.
Data published by Pakistan Bureau of Statistics showed that the price of sugar was on the rise after the month of January, 2021 and was still showing an upward trend which is causing hardship for the general public.
The Prime Minister had taken notice of the rising price of sugar and during a meeting held on July 19, 2021 had given directions that sales tax on sugar was to be reverted back to ex-mill price till November 30, 2021.
The amendment as proposed could be made by the Federal Government in exercise of its powers under proviso to clause (a) of sub section (2) of section 3 of the Sales Tax Act 1990.
During discussion, the Cabinet stressed that it must be ensured that the benefit was passed to the consumers in shape of lower price. The Minister for Industries & Production informed the cabinet that sugar industry will be asked to ensure that the benefit is passed onto the consumers.
Copyright Business Recorder, 2021