Stakeholders decide to launch campaign against 17pc GST on seeds

LAHORE: The Pakistan Hi-Tech Hybrid Seed Association (PHHSA) in collaboration with the Rice Exporters Association of Pakistan (REAP) and the All Pakistan Textile Mills Association (APTMA) have decided to launch a forceful lobbying campaign to convince the government for withdrawing the levy of General Sales Tax (GST) on seeds.

“This levy will have an accumulative impact of 25 percent on the final stage of imported or locally seeds thus escalating the cost of doing business for the farmers and posing a threat to the national food security besides making a dent to the efforts of Research & Development (R&D) being made by the local companies to produce hybrid seed locally and making a quantum jump in the overall national agricultural production”.

PHHSA Chairman Shahzad Ali Malik, REAP Chairman Ali Hussam Asghar, PHHSA Senior Vice Chairman Dr Shafiq ur Rehman, Momin Ali Malik, Sajjad Sulaiman Malik, Jamshaid Khan and others announced this at a discussion arranged by the Agricultural Journalists Association (AJA) here on Wednesday.

AJA President Muhammad Luqman, Lahore Economic Journalists Association (LEJA) Sudhir Chaudhry and AJA Secretary General Amjad Mahmood also spoke on the occasion.

“We have developed a strategy and will be giving a presentation to several official quarters including minister of finance, minister of commerce, FBR chairman, ministry of food security etc to convince them that levy of GST will hamper the efforts to boost national agricultural production”, said Shahzad Ali Malik.

He said companies would be performing as tax collectors and farmers being the end users have to bear the brunt of this sales tax of 17 percent and three percent additional tax to be paid by the unregistered companies.

He was of the view that instead of increased revenue this step of the government would result in downfall in it as farmers would prefer to buy seed from informal sector instead of opting for higher-standard certified seed from the formal sector. Use of seed from informal sector means lower per acre yield, he claimed.

Malik said the government was pushing the agricultural sector to adopt Chinese model for higher output but China has achieved it by using the cheaper hybrid wheat and cotton seeds. Though cotton production in Pakistan is increasing and this year it is expected that country would achieve 8.5 million bales but still it is far behind the requirement of our biggest export sector.

He claimed textile mills need at least 15 million bales and if we have to follow China which is getting three times higher production than Pakistan, so we have to promote the hybrid cotton seed. Pakistan’s average yield is 625 kilograms per hectare while China as getting 1865 kilograms per hectare, he averred.

The PHHSA chairman proposed that either the government should withdraw levy of GST or only the importers of the seed should be taxed.

He said locally produced seed should be exempted so as the research being done by local companies should not get damaged.

Rice Exporters Association of Pakistan (REAP) Chairman Ali Hussam Asghar announcing support to Shahzad Malik said that hybrid rice is a success story in Pakistan due to which production has jumped to 8.14 million tons making more exportable surplus available. This rendered Pakistan cheaper than India and other competitors.

He said they could have made more exports if they have not been facing issues of availability of quarters. He said we need to grow more to export more and for this we should promote hi-tech seeds. He urged the government to consider immediate withdrawal of GST on locally and imported seeds.

Dr Shafiq-ur-Rehman of the PHHSA said maize is another success story in Pakistan which due to hybrid seed production had reached to 60 maund per acre during last three years from 47 maund per acre. He said local companies were taking care of small growers while we also need higher maize production to cater the need of our poultry sector which is growing at a rate of 11-12 percent per annum. He said Pakistan’s poultry sector needs 7 million tons of maize next year and if we failed then the country had to spend precious foreign exchange both for imported maize for poultry sector and seed for sowing.

Executive committee members of the sssociation including Sajjad Sulaiman Malik, Jamshaid Khan and Momin Ali Malik said that hybrid seed sector was still in its infancy in the country and it should be incentivised instead of taxed heavily.

Sajjad said that increased cost of doing business would force the farmers to stop farming and sell their land for housing sector which would be a threat to the national food security.

Jamshaid Khan who hails from KPK said that over 50 percent of the off-season vegetables come from his province and if seed prices increased due to GST, then farmers would opt for tree plantation or leaving the farming.

Copyright Business Recorder, 2022