Pakistan Poultry Association (PPA-Northern Zone) held a demonstration here on Wednesday to oppose the imposition of proposed Reformed General Sales Tax (RGST) on poultry sector and withdrawal of exemption/zero rating on processed chicken. Former Chairmen PPA Raza Mehmood Khursand, Abdul Basit and Khalique Arshad led the peaceful demonstration, which was held outside the Lahore Press Club.
Earlier addressing a press conference, PPA leaders claimed that the government is contemplating to levy a 15 percent RGST on poultry feed while exempting chicken and eggs and withdrawing zero rating on processed branded chicken. Poultry feed contributes 70 percent to the input cost. A 15 percent increase would undoubtedly increase the cost of grandparents, parent stock, broiler and egg production operations, he said, and added that poultry product prices are governed by demand and supply mechanism, as such the increase cannot be passed on to the consumers at will.
They claimed that fearing losses after imposition of these taxes and withdrawal of exemptions, a large number of farms would be closed down and the prices of chicken meat could, in the face of short supply, increase by 100 percent. They stated in case GST on Value Added Product is imposed then it would be completely eliminated from Pakistan as there is only 2 percent consumption of processed chicken.
Raza Khursand, Abdul Basit and Khalique Arshad further said that presently day old chicks are being sold at less than 1/3 the price and broilers are being sold at 20 percent below the cost, while eggs at 32 percent below the cost. RGST will be the final nail in the coffin of the industry, they added. The levy of GST on poultry feed is against all norms, principles and philosophy of the GST. If the output is exempted, the input cannot be subject to GST, they argued.
Quoting from foreign examples, they said that in order to keep the input cost low, the governments of India, Bangladesh, Thailand, Iran and China and even the very affluent countries in the EU, Australia, New Zealand and many states in the US have either exempted or zero rated poultry feed, chicken and eggs. They urged the government not to change the current GST taxation status of the entire poultry sector, as the sector is making tremendous contributions in providing protein to fight malnutrition and under-nutrition.