PVMA seeks removal of Section 8B of Sales Tax Act in budget

KARACHI: Sheikh Umar Rehan, Chairman of the Pakistan Vanaspati Manufacturers Association (PVMA) has urged the federal government, Finance Minister Senator Muhammad Aurangzeb, and the Chairman of Federal Board of Revenue (FBR) to abolish Section 8B of the Sales Tax Act for the edible oil and ghee industry in the upcoming federal budget.

Currently, Section 8B mandates the advance withholding of 10% of input costs, which Sheikh Rehan described as an unfair burden on an industry that deals with essential food products.

“This clause should not apply to the edible oil and ghee sector, which is already under immense financial pressure due to multiple layers of taxation,” he said.

He emphasized that the industry is grappling with rising production costs, which it can no longer sustain. One of the key challenges, he noted, is the delay in the release of billions of rupees in sales tax refunds, currently held up by the FBR.

“Timely disbursement of these refunds is essential to ensure manufacturers have the working capital they need,” Rehan added.

He explained that if refunds are paid on time, the industry would not need to rely on expensive bank loans, which would significantly lower production costs. “Ultimately, this would lead to a reduction in the prices of ghee and cooking oil — benefiting consumers directly.”

Sheikh Umar Rehan stressed that if the government aims to curb inflation, it must adopt industry-friendly policies. He highlighted the removal of Section 8B and the prompt payment of sales tax refunds as critical steps toward stabilizing the edible oil sector and providing economic relief to the public.

Copyright Business Recorder, 2025