Pakistan Sugar Mills Association (PSMA) has requested Prime Minister Syed Yousaf Raza Gilani not to increase General Sales Tax (GST) on sugar as this will increase the commodity price by Rs 10 per kg. In a letter to the Prime Minister, Chairman PSMA Javed Kayani has argued that since the government is taking tangible measures to control inflation, the decision to charge 16 percent GST on sugar, will multiply the woes of the poor man.
The Association is of the view that if the government wants to increase GST on sugar, the decision be implemented before the start of new crushing season. Chairman Federal Board of Revenue (FBR) Salman Siddique announced a couple of days ago that a summary will be submitted to the Economic Co-ordination Committee (ECC) seeking approval to withdraw 50 percent exemption in the rate of Sales Tax on sugar.
Currently, the rate of GST on sugar is 8.5 percent at the rate of Rs 28 per kg, which is much lower than the market price of sugar which is in the range of Rs 65 to 70 per kg. In 2009, the government had reduced general sales tax on sugar by 50 percent and fixed the ex-mill price of sugar at Rs 45 per kilogram, inclusive of all taxes. Prime Minister had also asked the Minister for Industries and Production to ensure availability of sugar at Rs 38 per kg at utility stores across the country.
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