Phosphatic/potassic fertilizers: government to pay subsidy on basis of ST invoices, returns

The government will pay subsidy on purchase of phosphatic and potassic fertilisers on the basis of sales tax invoices and sales tax returns submitted by the manufacturers/commercial importers of the said commodity. Sources told Business Recorder Saturday that under the proposed procedure on payment of subsidy, the release of amount of subsidy shall be ensured within 5 working days of generating sales tax invoice. The subsidy claimed of each manufacturers/commercial importer shall be sent to the Ministry of National Food Security & Research by Federal Board of Revenue (FBR).
Ministry of National Food Security & Research has requested the Finance Division to approve the new procedure for provision of subsidy on DAP as delay in implementation of Prime Minister's package would cause discontentment amongst farmers. According to sources, Prime Minister's package announced on September 15, inter alia contained the provision of subsidy of Rs 20 billion to the farming community on purchase of phosphatic and potassic fertilizers. Fifty percent funding for the subsidy was to be contributed by the provincial governments. To finalize the system for ensuring that the benefit of announced subsidy reaches its intended beneficiaries, ie, the farming community, a number of meetings were held in the Ministry of National Food Security & Research. These meetings were inter alia attended by Chairman/representatives of FBR, representatives of the Provincial Governments, manufacturers/importers of DAP and the representatives of the farming community. After detailed discussion, a new procedure was finalized in the meeting and salient features of the proposed system are:
Firstly, subsidy will be paid to the manufacturers/commercial importers after the sale of bagged DAP. Secondly, subsidy shall be paid @ Rs 500 per 50-kg bag. Thirdly, subsidy shall be paid on the basis of sales tax invoice and sales tax returns submitted by the manufacturers/commercial importers.
Fourthly, Ex-Karachi price would be printed on each bag. The manufacturers would however, give wide publicity regarding actual price which would include freight. The country would be divided in 6-7 zones for determining freight charges. Fifthly, subsidy to NP and JPK would be determined on the basis of the percentage of the phosphatic content in the above mentioned products. Sixthly, the importers/manufacturers would immediately cancel the dealership if a dealer or his sub-dealer is found guilty of overcharging or tying the product with other fertilizers.
Seventh, the DAP fertilizer manufacturer/importers will ensure wider public awareness about the fertilizer prices. They would also launch mega media coverage through print and electronic sources of this purpose. Eighth, provincial governments would be given the responsibility for strict monitoring. The said procedure needs to be notified and entire system needs operation.
No provincial government except Balochistan has, however, agreed to contribute its shares for the subsidized DAP. They insist that the federal government should bear entire burden of subsidy. The cultivation of Rabi crops has already started and DAP is an extremely necessary ingredient for enhancing productivity. The farmers are not buying fertilizer as they are waiting for the immediate implementation of the Prime Minister's package, sources added.