ISLAMABAD: Sindh Chamber of Agriculture (SCA) has approached Prime Minister Shehbaz Sharif against abnormal increase in prices of agricultural tractors with imposition of 10 percent sales tax and also opposing the proposed sales tax increase of up to 14 percent on tractors.
In a communication to Prime Minister and newly appointed Chairman Federal Board of Revenue (FBR), Nabi Bux Sathio Senior Vice President Sindh Chamber of Agriculture Hyderabad expressed serious concerns and opposed further increase in sales tax rate from 10 to 14 percent on these tractors.
The chamber informed that prior to June 30, 2022, the goods were classified under Eighth Schedule of Sale Tax Act, 1990 and 5 percent sales tax was charged to the agricultural farmers of Pakistan.
Thereafter from July 1, 2022 onwards it was brought under Sixth Schedule in Finance Act 2022 whereby exemption of sales tax was allowed at Serial No. 170.
This exemption in the Sixth Schedule supported the local manufacturers of agricultural tractors in Pakistan.
The local manufacturer of tractors did not pass on the benefit of the said facility to the farmers (purchaser of Agricultural Tractors). The local manufacturers had added the exemption amount in the cost of the tractor and made absorbent profits for themselves instead of farmers, Senior Vice President Sindh Chamber of Agriculture stated.
From July 1, 2024 the government increased he rate of sales tax to 10 percent. The local manufacturers who had already illegally included the 18% previous tax in the cost of the agricultural tractor have now once more added another 10% in the price, Sathio stated.
Despite the fact that they had already included the exempted amount under Sixth Schedule to their selling prices.
It has come to in knowledge of the farmers’ association that the local manufacturer of tractors are using their influence and wish to further increase the rate of sale tax by additional 4% to bring the sales tax rate from 10% to 14%, the association alleged.
All the above increase of sales tax on tractors is in violation of SRO.563/2022, which specifically issued to provide maximum benefits to farmers.
Under SRO 563/2022, the sales tax has to be reduced for farmers only. This benefit is not given to the farmers and that all the increase in price will have direct effect on increase of agriculture products. This will reduce food production in Pakistan and consequently Pakistan would spend its foreign exchange to purchase imported agriculture food products.
In the light of these facts, the SAC requested that FBR may inquire in this matter and save the farmers and the agriculture products of Pakistan and not to increase the sales tax for agricultural tractors as this will create huge burden on the farmer community of Pakistan who is already suffering huge problems at present.
Copyright Business Recorder, 2024
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