The Pakistan Cotton Ginners Association (PCGA) has demanded withdrawal of sales tax on cottonseed oil, saying that the measure would help stabilise raw cotton (raw cotton) price in open market. The PCGA in its budgetary proposals said that edible oils such as sunflower and canola are exempted from sales tax but ST is being charged on cottonseed oil. It added that disparity keeps phutti prices depressed in the market and forces the government to support the growers from its resources.
It suggested that sales tax on cottonseed oil should be withdrawn in the forthcoming budget so that phutti price should remain stable in the market in the future. The PCGA added that withdrawal of sales tax from cottonseed oil would create healthy competition.
The PCGA said that sales tax levied on oil dirt and kachra of the ginning process, which makes very nominal value and should also be withdrawn. It said the exercise carried out by the tax machinery for a small quantum of sales tax from kachra and oil dirt makes no sense.
The ginners are also not so methodical. Therefore, extra financial burden is faced by the department of sales tax against the collection of small revenue.
It claimed that kachra of ginning is burnt / buried as per rules of agriculture ministry as it can give birth to such pests which may be dangerous for cotton and other crops as well as general environment. T he PCGA noted that kachra and oil dirt have no economical value and be exempted from sales tax.
The PCGA reminded that the Member Sales Tax had promised it during a meeting that its demand of exemption of oil dirt and kachra would be considered during the budgetary preparation.