Sugar mills supplies to USC exempted from sales tax

The government has exempted the 10 percent sugar mills' stocks from sales tax that they will provide to the Utility Store Corporation (USC) for selling at its outlets at subsidised rates.
Sources said the exemption was meant to persuade the mill-owners that they will not bear any extraordinary burden on providing 10 percent stocks to the USC to offer at its outlet at Rs 29.50 per kg.
The mills were selling stocks at Rs 36 and in some areas at Rs 36.50 per kg. This included Rs 4 to 5 per kg sales tax. The exemption will bring the ex-factory rates down to Rs 31 and Rs 31.50 per kg, leaving a differential of Rs four and four and half rupees in rates at which the mills have been asked to provide the stocks for selling at USC.
The government had asked the PSMA to provide 10 percent of the stocks produced during 2005-06, at Rs 27 per kg during a meeting held some time back.
The PSMA was told by the authorities who held the meeting in Islamabad that the government would sell the stock to the low-income group to give them some relief.
The PSMA presented the demand in one of its meetings recently held in Lahore to seek views of its members.
Sources said some of the participants raised the issue of the rates at which the government demanded the stocks and asked the PSMA office-bearers to go back to the authorities to get the rates revised. However, a good majority agreed to sell the stock at the offered rates.
Those who were in favour of selling the commodity to the government at offered rates opinioned that the move will ease the pressure on the industry from some quarters.
It may be noted that sugar industry is under severe criticism for the last many months for selling their stocks to the public at irrationally higher rates.
Things went totally against the mill owners some time in March last when National Accountability Bureau NAB moved in to probe against them the allegations of profiteering and exploitation.
Although the strong lobby of the mill owners managed to block the move.
However, majority still believes that the mill owners made undue profit on their stocks and the issue should have been dealt by NAB.