PVMA tells Revenue Board: ghee prices relief possible only on five percent levies cut

ISLAMABAD (February 12 2003) : The Pakistan Vanaspati Manufacturers' Association (PVMA) has conveyed to the Central Board of Revenue that reduction in ghee/ cooking oil prices to give relief to the common man was only possible if sales tax and duty were scaled down by 5 percent.

Sources said that a seven-member PVMA delegation, headed by chairman, Sheikh Abdul Razak, and comprising former chairman Sheikh Ikram, Akhtar, and Abdul Razak, conveyed the industrialists' point of view to CBR officials on Monday in a meeting which lasted for more than one hour.

The PVMA delegation told the CBR officials that the association is the only representative body of almost all the vegetable ghee/cooking oil units of the organised sector and contribute over Rs 25 billion annually in the government exchequer in the form of duties and other taxes.

However, it was committed for full co-operation to the government and welcome the reduction in the prices of essential food items and it shares the government intention to provide relief in the food items.

The delegation added that the government had enhanced sales tax on imported edible oils from 15 percent to 20 percent and also levied 15 percent GST at the manufacturing stage on vegetable ghee/cooking oil in annual budget 2002-03, despite the fact that the manufacturers of vegetable ghee/cooking oil were already paying custom duty/sales tax ranging from 70 percent to 80 percent of C&F price of imported edible oils.

Sources said the millers apprised the CBR authorities that as a result of these enhanced duties and taxes and the rise in the international market price of imported edible oils by $ 237 per tonne since June, 2002 production cost of vegetable ghee/cooking oil has gone up by Rs 4.7 per kg and these factors were serious constraints for the PVMA member units in cutting down the prices of vegetable ghee/cooking oil on their own unless the sales tax on imported edible oil is reduced from 20 percent to 15 percent and GST at the manufacturing stage.

The delegation demanded of the CBR officials, who represented the government side during the parleys, that taxes and duty on ghee/ cooking oil be brought down at the pre-budget level of 2002-03.

Sources added that the PVMA hoped that in case its suggestion of cutting down the taxes rates is accepted by the government the prices of vegetable ghee/cooking oil would be reduce by Rs 2 per kg which would be a relief to the general public by Rs 32 per 16 kg.

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