The federal government has provided partial relief to vegetable ghee and cooking oil units located in Fata and Pata by allowing them to clear their import consignments without payment of 15 percent excise duty.
But this relief is only for the consignments of edible oil which had arrived at the port prior to the budget date.
Against imposition of 15 percent central excise duty on ghee and cooking oil units, the Fata and Pata units had raised the plea that they are located in poor areas, therefore they should be exempted from CED.
The government, however, did not agree to it but gave them partial relief that they could clear their edible oil consignments which had arrived before the budget dates.
Now they will take this benefit but they have stopped further booking for importing edible oil. It is yet to be seen what happens afterwards.
According to Pakistan Vanaspati Manufacturers Association (PVMA) sources, the government has surrendered to the demands of Fata/Pata units.
In fact, the market is very much surprised with this announcement of partial relief as there is no precedent that the customs has two different rules for clearance within the same industry.
The special considerations issue about the Fata/Pata units was going on for last one year and this was one of the reasons of the deterioration in the ghee industry.
Although the PVMA had made strong representation against any concession to the Fata/Pata units, the government conceded under pressure of the Fata/Pata units.
This will create another anomaly as those industries which are paying full duty would not be able to compete properly against the units located in Fata/Pata.
Market sources said that this budget has created chaos in the market vis a vis sales tax procedure.
Although the government has abolished 3 percent further tax on unregistered buyers, the undocumented sales have multiplied which is directly affecting those ghee industries which are carrying out proper documentation.