The government on Thursday exempted the import of 300,000 tons of sugar from withholding tax and 17% sales tax in a bid to lower the price of the sweetener in the country.
In two separate notifications, the Federal Board of Revenue (FBR) said sales and income taxes on the import of 300,000 tons of white sugar by the Trading Corporation of Pakistan (TCP) had been withdrawn.
According to the first notification, SRO 750(I)/2020, an amendment has been made to Second Schedule of Income Tax Ordinance, 2001.
As per the amendment, a new clause 12G has been inserted in the second schedule that read: “The provisions of Section 148 shall, in pursuance of the Cabinet Decision dated August 04, 2020, [will] not apply to import by the Trading Corporation of Pakistan of 300,000 metric tons of white sugar having PCT heading 1701.9910, 1701.9920, specification B.”
The second notification, SRO 751(I)/2020, read that the same specification and PCT heading the import of sugar had been exempted from sales tax.
Last month, the Economic Coordination Committee (ECC) of the Cabinet had allowed import of 300,000 tons of sugar expecting a shortage of the commodity.
“The ECC considered a proposal of the Ministry of Industries and Production for the import of refined sugar by the Trading Corporation of Pakistan (TCP) to maintain buffer stocks, and allowed import of up to 300,000 tons of white sugar,” according to a statement issued by the finance ministry.
It said the mode of procurement and other modalities would be decided by a three-member committee comprising industries and production secretary, commerce secretary and finance secretary.
The decision was taken after the recent review of sugar stocks revealed the fast depletion of stocks. The ECC members were of the view that the country may face shortage of the commodity either by the end of September or early October and there was a need to import sugar.
Sugar is the second commodity that the PTI government has decided to import after first exporting it, highlighting mismanagement that will also have implications for the thin foreign exchange reserves and the budget due to the need for subsidies.
Earlier, the government allowed import of 1.5 million tons of wheat after first allowing its export after coming to power.
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