The Ministry of National Food Security & Research has assured the payment of three-month pending DAP subsidy after verification of sales tax receipts from the Federal Board of Revenue (FBR). Sources toldBusiness Recorder Wednesday that a meeting was convened by secretary ministry of food security Abid Javed last Friday to discuss the issue of DAP subsidy payment to fertilizer importers. The meeting was also attended by representatives of Fertilizer Importers Council and fertilizer producers/manufacturers.
During the meeting, fertilizer importers said presently, subsidy claims of around Rs 5.1 billion are pending for all imported DAP sales from September to December 2016 and private importers are under severe financial stress, of which they are not in a position to participate further under the existing DAP subsidy scheme.
They maintained that the delay of subsidy claims is a clear violation of the government notifications (F.No. 1-11/2012/DFSC-II/Fertilizer) and now banks are blocking financing lines of the importers, of which they are not in a position to import DAP for the Kharif season.
During the meeting, the ministry official informed importers that subsidy payment is being delayed as provinces have not yet verified/confirmed the supplies of DAP. The ministry asked the importers to get verification from the provinces and accordingly submit to the ministry so as to ensure release of subsidy.
However, importers turned down the ministry's proposal saying that they are not agreed for any change in the mechanism for payment of subsidy claims, already described in the subsidy notification.
They also made it clear that since subsidy claims have not been paid for the last four months, it is not possible for them to import further DAP as they are under severe cash constrains. As more DAP cargoes are not being imported, farmers are likely to face shortage of fertilizer in March and April this year as import process takes some 2-3 months to arrange and ensure arrival of DAP consignments, they maintained. They asked the ministry that supply of DAP can be verified from the FBR as importers have paid sales tax on the import of fertilizer.
Sources said after detailed discussion, it was mutually decided that the ministry of food security will release subsidy claims of three months, ie, September to November 2016 by 2nd January 2017 after verification of computerised sales tax payment receipts. It was also decided that Punjab subsidy claims will be released for the months of September, October and November 2016 without further verification as Punjab has already verified the same.
Importers also urged that 80 percent claims of other provinces be released urgently for three months, ie, September to November and the remaining 20 percent after the receipt of provincial verification.
Sources said following the meeting, the ministry of food security has also written a letter to the FBR for verification of computerised payment receipts of sales tax submitted by importers/manufacturers of fertilizer for payment of subsidy on fertilizer from June 25th to November 2016.
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