Tax anomaly forces closure of 16 ghee and oil units

ISLAMABAD (January 29 2003) : The anomaly in taxes has resulted in closing down of 16 ghee and cooking oil industries in the settled area, NWFP after losing market to industries falling in FATA and PATA, which have been enjoying an edge of Rs 8.25 per kg over the rest.

The affected mill owners apprehend that the remaining 14 units may also shut down if a level playing field is not provided to all the industries without further delay.

Even ghee industries falling in other parts of the country, which had market in the NWFP for their products, have suffered a serious setback, and finally closed down.

Two industries of Islamabad – Fazal Vegetable Ghee Mills (Pvt) Limited and Silver Oil Mills (Pvt) Limited, are its typical examples.

Other ghee/ cooking oil mills, which have shut down, included Nawaz Ghee Mills, Limited, Tordher Vegetable Ghee Limited, Ghani Ghee Mills, Mardan; Sarhad Ghee Mills, Peshawar; Kaghan Ghee Mills, Limited Gadoon Amazai; Afghan Ghee Industries, Imala Ghee Mills, International Ghee Mills, Friends Ghee Mills, Allied Ghee Mills, Khyber Ghee Mills, Zafar Oil Mills, Kohat and Daman Oil Mill.

TAX EXEMPTION: Ghee industries in FATA and PATA have been enjoying a complete exemption in taxes, which provide them an edge of Rs 8.25 per kg over the other industries, which have been paying 15 percent GST, 10 percent duty and 3 percent withholding tax on their products.

This concession on taxes has made FATA and PATA an attractive place for ghee industries.

Sheikh Ikram, a leading Islamabad-based industrialist and Chairman Hafeez Iqbal Oil and Ghee Mill (Pvt) Limited, Hattar, foresaw anomaly in taxes between FATA/ PATA and rest of the country's industries as a major setback.

He wanted a level playing field for the parties.

Ikram said the exemption to ghee industries in FATA/ PATA was an injustice to other millers who were feeling difficulty to find a market for their products due to a difference of over Rs 8 per kg.

Haji Akhtar, one of many affectees, termed the concession in taxes to industries in FATA and PATA a killer for the other industries of the country.

Haji Saheb demanded that the government should take notice of, what he said, alarming situation confronted by the industry of the settled area.

He added “If the concession in taxes is meant to provide ghee at subsidised rates to the people of FATA/PATA then its production should be restricted to those areas.”

He recommended that flour (atta) supply could be taken as a precedent for ghee.

Haji Akhar maintained that he would appreciate if ghee is subsidised for people in FATA/PATA like atta but other areas should not suffer for the benefits of a few industries.

A report made available to the Business Recorder shows that four industries have become fully operational during the last eight months in FATA/ PATA.

These are besides those two units, which were already operational in these areas.

The ghee/ cooking oil industries, which are operational in FATA/ PATA included Bara Vegetable Ghee Mills (Pvt) Limited, Khyber Agency with 18,000 tonnes, Sadat Ghee Mills, Khar Bajour Agency (18,000 tonnes production), Masood Ghee Mills South Waziristan Agency (18,000 tonnes), Gul Cooking Oil and Vegetable Ghee Mills (Pvt), Limited (18,000 tonnes), United Ghee Industries, Malakand Agency, (18,000 tonnes), Malakand Ghee and Oil Mills, Thana, Malakand Agency.

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