The sub-committee of the National Assembly Special Committee on Agricultural Products has recommended the withdrawal of General Sales Tax (GST) on agricultural equipment and apparatus.
The parliamentary panel met under the chairmanship of Shandana Gulzar Khan on Wednesday to discuss the concerns of the fertilizer manufacturers of the Pakistan Advisory Council, the mismatched input and output GST on urea production, the mismatch of the GST on DAP, NP, SSP (local manufacturing), the allocation of funds for the release of the GST refunds, the payment of the pending subsidy amount since 2018, a briefing on the disbursement of subsidy on fertilizer under the COVID-19 fiscal stimulus package, and the subsidy disbursement mechanism of each province.
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Brigadier (Retd.) Sher Shah, the representative of the fertilizer sector, said that the prices of urea are higher in the global market. He said that there is talk of subsidizing gas, and added that they pay the highest taxes. The government has to pay their Rs. 52 billion under the head of refunds and subsidies, he claimed.
He stated said that the entire fertilizer sector business is being run on credit, and that the government had given a subsidy of Rs. 252 billion on gas to the sector during the last ten years. Additionally, the fertilizer sector has given benefits to the tune of Rs. 604 billion to the public. He further said that farmers are charged less for GST and more is paid to the government.
The Secretary of the National Food Security and Research said that it opposed the tax hike.
Khalid Khokhar of the Farmers Union stated that agriculture should be the first priority in the budget.
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The Minister for National Food Security and Research, Syed Fakhar Imam, said that whenever the government had tried to give relief to the farmers, middlemen had become a hurdle. “We all want the farmer to get a subsidy,” he said, adding that the government is introducing a new system to deliver subsidies to farmers.
There are 8.2 million farmers in the country, and efforts are being made to provide subsidies to all, Imam explained, adding that they hoped that the provinces would improve the agricultural system. He said that 47 percent of seeds in Pakistan are unregistered.
Khokhar said that all the electricity theft is collected from farmers, and that GST has been imposed on agricultural apparatus. He added that GST is also proposed on food items in the budget.
The committee recommended the abolition of the GST on agricultural apparatus and equipment.
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