The Small and Medium Enterprise Development Authority (Smeda) has urged the government to allow import of Farm Cooling Tanks (FCT) at the rate of five-percent customs duty like other dairy equipment so as to promote the dairy sector. This proposal was given by the Authority in its budget proposals for the year 2005-06, said Asad Zahoor, Head of the dairy sector in the Smeda while talking to Business Recorder here on Wednesday.
Zahoor maintained that an anomaly had been pointed out by dairy sector stakeholders with respect to customs duty on Farm Cooling Tanks imports ie combined impact of customs duty is 53 percent on import of FCTs, while import of compressors and other items used in an FCT are allowed at 5 percent.
This hampers import of important equipment that may be vital for the development of dairy sector and bringing improvement in quality of milk in the country.
It is therefore proposed that FCTs be allowed at 5 percent customs duty at par with other dairy equipment.
Asad Zahoor said that Farm Cooling Tanks could be utilised to bring the temperature of milk down to 4 degree Celsius after milking, as it would slow down the pace of bacteria increase, apart from enhancing life of the milk.
By this way, milk could be preserved for more time and its transportation from rural areas to cities or processing units could be made easy, improving the income of farmers too.
To a query, he said the Smeda, like previous years had conducted an exercise to prepare budget recommendations for year 2005-2006 with a particular focus on the small & medium enterprises (SMEs) operating in vital sectors making a considerable contribution to country's GDP and export earnings.
Asad said that the Smeda has also proposed that import ban on Canadian embryos be lifted. It has been clearly demonstrated that embryos do not transfer BSE and the OIE. He stated "there should not be trade barriers to embryos based on BSE".
As Iran, Japan, China, Europe, Australia, New Zealand and USA have already lifted the ban imposed on import of Canadian embryos; Pakistan must also lift this ban.
This step would lead to aid in populating of large modern dairy farms using embryo transfer and artificial insemination technologies and a combination of Pakistan and Canada genetics.
Small preliminary trials in Pakistan have already produced a live calf and a recent trial in Pakistan produced 42 viable embryos from 4 donors bred to high production Holstein sires.
For the promotion of dairy sector, it has been suggested to allow tax exemption to agro-processing machinery, apart from allowing fiscal incentives to support innovation and new product development.
For the development of large-scale corporate/commercial dairy farms and investment in modern technology at farm level, it is proposed to allow income tax exemption on corporate dairy/livestock farms for five years.
The exemption may be subject to minimum investment, use of technology, development or performance indicators/factors. Presently, 15 percent Sales Tax is applicable on Yogurt and other processed/value added dairy products like cheese, flavoured milk, condensed/sweetened milk etc.
The total receipts to the national exchequer are nominal as compared to administrative costs of collection and implementation. In consideration of the cost benefits involved, it is proposed to allow Sales Tax exemption on all processed /value added dairy and/or livestock products.
To encourage dairy and livestock farming, milk collection infrastructure and processing for value addition/quality improvement it is proposed to allow dairy & livestock related equipment, parts, including packaging materials and consumables imports at zero percent customs duty.
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