ISLAMABAD: The Economic Co-ordination Committee (ECC) of the Cabinet on Tuesday approved exemption of 16 percent general sales tax (GST) on the fixed charge of hydroelectric power, increased urea price from Rs 1300 to Rs 1600 per 50kg bag and approved a loan of Rs 6.1 billion for Pakistan Railways.
The ECC presided over by Finance Minister Dr Abdul Hafeez Sheikh decided to exempt levy of GST on fixed charges of Hydroelectric Power to improve the cash flow position of Water and Power Development Authority (Wapda) and decided to allow the sale of 450,000 tons of wheat to private sector at that rate of Rs 950 per 40kg, Rs 100 below the support price of Rs 1050 announced by the government owing to a decline in wheat prices in the international market.
Source said the government would give a subsidy of Rs 2.720 billion on account of price differential of Rs 100 per 40kg on the sale of wheat to private sector. A summary moved by the Ministry of National Food Security and Research requested the ECC to allow the sale of 1 million tons of wheat at the rate of Rs 950 per 40kg to private parties and a subsidy at the rate of Rs 6045/ton may be picked up by the Finance Division as early off-loading of surplus stock was crucial due to shortage of storage capacity, rising cost of mark-up and an expected all-time high wheat stock in the international market in 2012.
The ECC also constituted a committee to expedite the process for one million ton wheat export to Iran through barter arrangements after a detailed discussion on the proposal of the Ministry of Food. The committee has been directed to expedite the process by itemising the goods which may be imported from Iran in return of wheat export. The committee on wheat export to Iran comprises Minister for Water and Power, Minister for Food Security and Research, Deputy Chairman Planning Commission and Secretaries Commerce, Finance and Food Security and Research. According to an official, Pakistan may import iron ore and fertiliser from Iran against the export of one million tons of wheat.
Managing Director Passco argued that if his department retained the surplus wheat, it would lead to cause a burden on the government in the shape of incidental charges. The ECC also discussed the possibility of export of wheat to Iran through a barter trade arrangement.
A statement issued after the meeting stated that the ECC also approved loan of Rs 6.1 billion to Ministry of Railways for the repair of 96 locomotives. The loan will be given in advance to Pakistan Railways Advisory and Consultancy Services Limited, which is a subsidiary of Pakistan Railways whose shares are wholly owned by Government of Pakistan.
The ECC also approved the proposal to fix price of imported urea at 1600 per 50kg bag. The ECC also constituted a committee to look into the implications of the construction of economic zones. It may be recalled here that China-Pakistan Economic Zones have already been approved by the ECC. The ECC also decided to exempt levy of GST on the fixed charges of the Hydroelectric Power. The ECC formed a committee comprising Minister for Water and Power, DCPC, Secretary Finance and Secretary Water and Power to look into the matter of "delay in payments by the Power Purchasers to IPPs under Power Policy 2002".
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