Mechanism formulated to pass on Rs20b subsidy to farmers
Will be transferred by adjusting GST, implementation from mid-October
In the earlier meetings, the manufacturers had also agreed to print the ex-Karachi price on the DAP bag to avoid any manipulation of prices. PHOTO: FILE
ISLAMABAD:
The government and fertiliser manufacturers have agreed on a mechanism to pass on Rs20-billion subsidy to farmers announced in the budget.
“It was agreed that the subsidy amount will be given to the importers and manufacturers of DAP through a set of mechanism, which will be subsequently passed on the farmers,” said sources in the Ministry of National Food Security and Research.
A meeting to this effect was held in Islamabad on Friday in which it was agreed that the subsidy will be transferred to importers by adjusting the General Sales Tax (GST) on the import of DAP.
“Both sides agreed that the Ministry of Finance will transfer the subsidy amount to the FBR, which will adjust it with the GST against the import of DAP, whereas the local manufacturers of DAP will have to claim the subsidy amount after production of the required DAP quantity,” said the sources.
Furthermore, the two sides also agreed on giving Rs500 subsidy per DAP bag along with allowing manufacturers to withdraw Rs160 from October 1. Prices were increased on per 50kg urea bag following the increase in gas prices for urea manufacturers.
The implementation process on DAP subsidy, however, will begin from mid-October.
Monday’s meeting held in Islamabad was attended by representatives of fertiliser manufacturing companies, officials from Ministries of Industries and Production, national food security and research, finance and FBR.
In the earlier meetings, the manufactures had also agreed to print the ex-Karachi price on the DAP bag to avoid any manipulation of prices. The federal government had announced Rs20 billion subsidy aimed at giving relief to farmers to reduce the cost of production.
The Ministry of National Food Security and Research has taken immediate step to devise a formula to pass on the subsidy to farmers in term of cheap fertiliser. Similarly, a subsidy of Rs14 billion was also announced by the government in the previous budget, but it lapsed due to the failure on part of the government and manufacturers to reach an agreement.
Published in The Express Tribune, September 23rd, 2015.
The government and fertiliser manufacturers have agreed on a mechanism to pass on Rs20-billion subsidy to farmers announced in the budget.
“It was agreed that the subsidy amount will be given to the importers and manufacturers of DAP through a set of mechanism, which will be subsequently passed on the farmers,” said sources in the Ministry of National Food Security and Research.
A meeting to this effect was held in Islamabad on Friday in which it was agreed that the subsidy will be transferred to importers by adjusting the General Sales Tax (GST) on the import of DAP.
“Both sides agreed that the Ministry of Finance will transfer the subsidy amount to the FBR, which will adjust it with the GST against the import of DAP, whereas the local manufacturers of DAP will have to claim the subsidy amount after production of the required DAP quantity,” said the sources.
Furthermore, the two sides also agreed on giving Rs500 subsidy per DAP bag along with allowing manufacturers to withdraw Rs160 from October 1. Prices were increased on per 50kg urea bag following the increase in gas prices for urea manufacturers.
The implementation process on DAP subsidy, however, will begin from mid-October.
Monday’s meeting held in Islamabad was attended by representatives of fertiliser manufacturing companies, officials from Ministries of Industries and Production, national food security and research, finance and FBR.
In the earlier meetings, the manufactures had also agreed to print the ex-Karachi price on the DAP bag to avoid any manipulation of prices. The federal government had announced Rs20 billion subsidy aimed at giving relief to farmers to reduce the cost of production.
The Ministry of National Food Security and Research has taken immediate step to devise a formula to pass on the subsidy to farmers in term of cheap fertiliser. Similarly, a subsidy of Rs14 billion was also announced by the government in the previous budget, but it lapsed due to the failure on part of the government and manufacturers to reach an agreement.
Published in The Express Tribune, September 23rd, 2015.