6/3/07 (Daily Times) ISLAMABAD  -  The Pakistan Vanaspati Manufacturers Association (PVMA), while opposing the subsidy on ghee by the government, has said that subsidy to the Utility Stores network will only benefit 10-15% of the consumers, whereas the PVMA member units financially suffer because of intense competition within the association.

The PVMA has proposed that the government should seriously consider reduction in sales tax FED of Rs 2.5 per kg and the same benefit will be passed on to the consumers immediately by the PVMA member units.

The PVMA’s proposals for the budget 2007-2008 were discussed by a PVMA delegation led by Association’s chairman, Sh. Amjad Rashid with Central Board of Revenue Chairman Muhammad Abdullah Yousaf, and later with Ministry of Industries, Production & Special Initiatives Secretary, Shahab Khawaja. The budget proposals, among others, included methodology for computation of withholding tax and its deduction on imported edible oils at import stage, rationalization of customs duty and other taxes on imported edible oils in proportion to the increase/decrease in their prices in the international market, extension of same customs duty on crude palm oil refineries and the refineries within the PVMA member units, refund of excess income tax of 1.75% on export of vegetable ghee/cooking oil, reduction of customs duty on imported tinplate in view of concession enjoyed by M/s Siddiqsons Tinplate (Pvt.) Ltd and enhancement of customs duty on imported palm stearin as well as tallow.

The PVMA delegation presented the budget proposals to the CBR chairman. The issue of subsidy of Rs 6 per kg on vegetable ghee through Utility Stores Corporation of Pakistan on the base price of Rs. 67.30 per kg was also raised with him.

The PVMA delegation held the view that subsidy to the Utility Stores network will only benefit 10-15% of the consumers whereas the PVMA member units will not only financially suffer because of intense competition within the association but low income population of the country will face the same situation as was the case when sugar was subsidized. The PVMA delegation felt that the Government had collected additional revenue at Rs. 2.5 per kg in federal excise duty and withholding tax as a result of increase in the import price of RBD palm olein since Jan 2006.

The PVMA delegation proposed that the Government should seriously consider reduction in Sales Tax/FED of Rs. 2.5 per kg and the same benefit would be passed on to the consumers immediately by the PVMA member units.

The CBR chairman patiently listened to the PVMA presentation and noted the proposals made. Later the PVMA delegation held a meeting with Ministry of Industries, Production & Special Initiatives Secretary, Shahab Khawaja, who was apprised of the presentation made earlier to the CBR chairman.