Government may slash GST on pesticides

LAHORE (May 04 2003) : The Federal Government is considering a proposal to provide relief to the growers by reducing the rate of general sales tax (GST) on agriculture pesticides in the budget for the fiscal year of 2003-04.

In this regard, various suggestions are under consideration and the final decision is expected within the next two weeks, said Ijaz Ahmad, Chairman, Pakistan Crop Protection Association (PCPA).

Talking to Business Recorder here on Saturday, Ijaz said that government officials concerned had held three rounds of talks with the representatives of PCPA.

Another round of talk is being held on Monday, May 5, in Central Board of Revenue (CBR).

It may be mentioned that PCPA is represents around 70 local companies engaged in pesticide business.

Ijaz said that the growers were facing manifold problems due to high input costs, and reduction in GST on pesticides would go a long way towards resolution of their problems. Various organisations including Cotton Crop Management Group (CCMG), Punjab Agriculture Department, Directorate of Plant Protection Karachi, all the four provincial agriculture departments have already recommended to the federal government to provide relief to the growers.

Ijaz said that levy of sales tax on pesticides had resulted in 20 percent increase in its prices.

He supported the demand of withdrawing GST from pesticides in order to provide relief to agriculture sector.

If it is not possible for the government, the rate of GST on pesticides should be reduced from 18 percent to 15 percent as was done in the case of fertilisers, he said.

“Fertiliser sector with its business volume of around Rs 55 billion per annum has at source sales tax rate of 15 percent while in case of pesticides, the trade volume is between Rs 12 and 15 billion per annum, and the rate of GST is 18 percent,” he pointed out.

He said that slashing of GST from 18 percent to 15 percent on pesticides would cost around Rs one billion.

He was of the view that this decision would not only provide relief to the agriculture community of Pakistan, but would also raise the popularity graph of the government.

He said that the government must ignore the unjustified pressure of international donor agencies and extend maximum relief to the growers.

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