AGL 40.00 No Change ▼ 0.00 (0%)
AIRLINK 127.04 No Change ▼ 0.00 (0%)
BOP 6.67 No Change ▼ 0.00 (0%)
CNERGY 4.51 No Change ▼ 0.00 (0%)
DCL 8.55 No Change ▼ 0.00 (0%)
DFML 41.44 No Change ▼ 0.00 (0%)
DGKC 86.85 No Change ▼ 0.00 (0%)
FCCL 32.28 No Change ▼ 0.00 (0%)
FFBL 64.80 No Change ▼ 0.00 (0%)
FFL 10.25 No Change ▼ 0.00 (0%)
HUBC 109.57 No Change ▼ 0.00 (0%)
HUMNL 14.68 No Change ▼ 0.00 (0%)
KEL 5.05 No Change ▼ 0.00 (0%)
KOSM 7.46 No Change ▼ 0.00 (0%)
MLCF 41.38 No Change ▼ 0.00 (0%)
NBP 60.41 No Change ▼ 0.00 (0%)
OGDC 190.10 No Change ▼ 0.00 (0%)
PAEL 27.83 No Change ▼ 0.00 (0%)
PIBTL 7.83 No Change ▼ 0.00 (0%)
PPL 150.06 No Change ▼ 0.00 (0%)
PRL 26.88 No Change ▼ 0.00 (0%)
PTC 16.07 No Change ▼ 0.00 (0%)
SEARL 86.00 No Change ▼ 0.00 (0%)
TELE 7.71 No Change ▼ 0.00 (0%)
TOMCL 35.41 No Change ▼ 0.00 (0%)
TPLP 8.12 No Change ▼ 0.00 (0%)
TREET 16.41 No Change ▼ 0.00 (0%)
TRG 53.29 No Change ▼ 0.00 (0%)
UNITY 26.16 No Change ▼ 0.00 (0%)
WTL 1.26 No Change ▼ 0.00 (0%)
BR100 10,010 Increased By 126.5 (1.28%)
BR30 31,023 Increased By 422.5 (1.38%)
KSE100 94,192 Increased By 836.5 (0.9%)
KSE30 29,201 Increased By 270.2 (0.93%)

Two major associations of edible oil sector have withdrawn their budget proposals (2018-19) pertaining to suggested changes in the rate of Customs duty applicable on soybean and palm oil at import stage.
According to a joint statement of Pakistan Vanaspati Manufacturers Association (PVMA) and All Pakistan Solvent Extractors Association (APSEA) received by the Federal Board of Revenue (FBR), both the associations after consulting each other have proposed the FBR to keep duty structure intact and unchanged on the import of soybean and palm oil in the upcoming Finance Bill 2018-19. The FBR may enhance duty/taxes structure on import of soybean in the budget 2018-19.
The tax experts on edible oil sector were of the view that the new proposal would not increase additional revenue of the FBR and may be set aside by the board during budget preparation exercise. On the other hand, the current duty/tax regime is in favor of soybean oil extracted from imported soybeans, since only 3% Customs duty (Rs 1,325), 6% sales tax and 5.5% Advance Income Tax in adjustable mode are applicable, whereas imported soybean oil attracts exorbitantly higher slabs of Customs duty at Rs 9,800, 16% federal excise duty and 5.5% advance income tax in minimum mode.
The import statistics revealed that alone in year 2017, around 350,000 MT of edible oil was extracted at 18% oil content, from 1.9 MM tons of imported beans. Therefore, in line with existing international trading prices, tax incidence on each ton of soybean oil extracted from 5.15 metric tons of beans hovers around Rs 7,100 (portion of which is refundable), whereas duty/taxes incidence on each ton of imported soybean oil is levied with Rs 31,500 with no provision of refunds. Likewise, since imported soybean and palm oils attract identical duty structure, therefore, tax incidence at import stage on palm oil is calculated at Rs 27,000 approximately.
In the light of foregoing, the FBR has granted a sizeable concession in duty and taxes of Rs 24,500 on each ton of oil extracted from beans, totaling to Rs 9 billion or so in year 2017.
The legal experts have moved one step ahead and opined that existing tax concessions enjoyed by soybean importers are definitely causing a material injury to local/national oil seed crops and edible oil so extracted; therefore, imposition of anti-dumping duty by National Tariff Commission (NTC) on import of soybeans cannot be ruled out to protect local oil-seed crops, being justified under stipulations of the World Trade Organization (WTO) regime and anti-dumping rulings.
Experts continued that ample evidence of tax concessions and revelation of decline in production of home-ground/indigenous oil seeds to the tune of negative growth of around 6% by economic survey of Pakistan is available with National Tariff Commission and Competition Commission of Pakistan (CCP) to exercise their jurisdictions in overall national and public interest by disintegrating the suspected cartels. Moreover, the FBR is also mulling to review and enhance duty/taxes structure on import of soybean to safeguard revenue collection.

Copyright Business Recorder, 2018

Comments

Comments are closed.