Fertiliser industry: Verification process for subsidy comes under fire

Dealers are required to show NTN before getting the facility

LAHORE: The fertiliser industry has expressed its reservations about a clause in the recent subsidy notification that requires every fertiliser dealer to show its national tax number (NTN) before benefitting from the offer.

“This clause is certainly not viable because it restricts subsidy payments to only those dealers who are registered with the tax authorities,” stakeholders of the fertiliser industry said.



“The government must consider the fact that majority, estimated at over 90%, of the smaller dealers are not registered and do not have NTNs, hence, they will not be able to pass on subsidy benefits to the farmers,” they complained.

Highlighting the simple verification process laid down in the beginning, the stakeholders protested that the Ministry of National Food Security and Research had been unnecessarily tampering with the conditions.

“Several complexities have now been added, causing a long delay in payments,” they deplored, adding a cumulative amount of Rs16.7 billion was now outstanding and the industry was suffering financially due to the subsidy crisis.

The Federal Board of Revenue (FBR) has demanded that urea manufacturers provide invoice-wise details of the subsidised fertiliser being sold.

They also have to specify the names of buyers, NTN number, description, number of bags sold and other relevant information as required, so that the information can be electronically separated on a provincial basis.



After that, the government promises to immediately authorise payment of 80% of the subsidy through the State Bank of Pakistan while 20% of the claims will be released after third-party validation, the subsidy notification states.

The amount paid will be secured through an indemnity bond, to be released after third-party validation. The remaining 20% of the claims will be settled within 90 days, after third-party validation.

Industry representatives say that mutual cooperation and consensus between the government and industry must prevail in such matters of national importance.

Published in The Express Tribune, August 11^th, 2017.

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