Urea sales resume on govt assurance
Backlog of Rs20b subsidy claims persists
Fertiliser prices in Pakistan are generally set at subsidised rates by the government, in accordance with similar policies of regional countries. PHOTO: EXPRESS
LAHORE:
Fertiliser manufacturers will resume sales after receiving assurances of subsidy notification being issued by the ministries of finance and food security & research along with simplification of the claims verification process.
A sum of Rs27.96 billion was allocated for subsidies in the recently announced federal budget after which prices were capped by the government. However, neither of the aforementioned ministries issued notifications for initiation of the subsidy scheme due to which producers of urea, the most commonly used and produced fertiliser, suspended sales to farmers pending official recognition of the scheme.
Farmers fare better due to subsidy on urea
Apart from procedural delays in issuance of the notification, the process for verifying sales and subsidy claims was also deemed tedious since it was spread over several levels including physical verification by provincial officials.
In light of the importance of the fertiliser industry to national output, both directly and indirectly, the government has promised issuance of the notification within ten days. The verification process has also been simplified by limiting it to cross-checking sales with general sales tax (GST) returns filed by the companies.
The Federal Board of Revenue (FBR) is expected to take the lead in the latter task with the new leadership expected to facilitate the process. A backlog of Rs20 billion subsidy claims under the previous scheme still haunts the Ministry of Food Security along with causing cash flow problems for companies due to delayed payments.
Punjab proposes abolishing sales tax on all types of fertiliser
Fertiliser prices in Pakistan are generally set at subsidised rates by the government, in accordance with similar policies of regional countries, to enhance agricultural production and provide relief to farmers. The policy, however, is a costly affair and consumes a significant portion of precious federal revenues which on a per capita basis are lower compared to regional governments.
Published in The Express Tribune, July 5th, 2017.
Fertiliser manufacturers will resume sales after receiving assurances of subsidy notification being issued by the ministries of finance and food security & research along with simplification of the claims verification process.
A sum of Rs27.96 billion was allocated for subsidies in the recently announced federal budget after which prices were capped by the government. However, neither of the aforementioned ministries issued notifications for initiation of the subsidy scheme due to which producers of urea, the most commonly used and produced fertiliser, suspended sales to farmers pending official recognition of the scheme.
Farmers fare better due to subsidy on urea
Apart from procedural delays in issuance of the notification, the process for verifying sales and subsidy claims was also deemed tedious since it was spread over several levels including physical verification by provincial officials.
In light of the importance of the fertiliser industry to national output, both directly and indirectly, the government has promised issuance of the notification within ten days. The verification process has also been simplified by limiting it to cross-checking sales with general sales tax (GST) returns filed by the companies.
The Federal Board of Revenue (FBR) is expected to take the lead in the latter task with the new leadership expected to facilitate the process. A backlog of Rs20 billion subsidy claims under the previous scheme still haunts the Ministry of Food Security along with causing cash flow problems for companies due to delayed payments.
Punjab proposes abolishing sales tax on all types of fertiliser
Fertiliser prices in Pakistan are generally set at subsidised rates by the government, in accordance with similar policies of regional countries, to enhance agricultural production and provide relief to farmers. The policy, however, is a costly affair and consumes a significant portion of precious federal revenues which on a per capita basis are lower compared to regional governments.
Published in The Express Tribune, July 5th, 2017.