ISLAMABAD: A meeting of the Senate Standing Committee on Finance Tuesday rejected the proposed inclusion of sugar in the Third Schedule of the Sales Tax Act, 1990, stating that it would increase the retail price of the commodity by Rs8-10 per kg and burden the masses already badly hit by the dearness. The finance committee presided over by Senator Talha Mahmood remarked that the inclusion of sugar in the Third Schedule would increase its price and consequently burden the people.

In response to a question about the need to include sugar in the Third Schedule, the Federal Board of Revenue (FBR) member informed the committee that the FBR has taken policy measure to deal with the issue.

Saleem Mandviwalla stated that the proposal to charge sales tax on sugar, on the basis of, the printed retail price would impact consumers and would also create problems for the government.

The FBR officials stated that the FBR had facilitated the dealers through all possible incentives to bring them into the tax net. The sugar mills are supplying the commodity to the unregistered persons and paying three percent additional sales tax.

However, the dealers are not ready to come into the tax net, which compelled the government to introduce such kind of measures.

The committee did not agree to the justification provided by the FBR for placing the sugar in the Third Schedule, and rejected the proposal. Earlier, the committee protested over the absence of the finance minister and the secretary finance from the first sitting of the committee, after being constituted, to discuss the Finance Bill 2021.

Senator Sherry Rehman led the walkout of all the committee members except Mohsin Aziz to register their protest.

"Absence of secretary finance, (if Finance Minister was attending the cabinet meeting), is a bad message to the committee and the senators". The committee members also pointed out that last year not a single recommendation of the committee was incorporated in the budget for the current fiscal year.

However, the Additional Secretary (Budget) Finance Ministry said that this was not accurate that the government did not accept the recommendations of the committee last year rather an appropriate number of changes proposed in the Public Finance Management Act were incorporated in the Finance Bill.

Later on, Mandviwalla and chairman of the committee exchanged hot words after Mandviwalla started raising questions on every clause of the Finance Bill.

Upon this, Senator Mahmood told Mandviwalla "you are working on an agenda" and must take permission of the chair if he wanted to ask any question.

Copyright Business Recorder, 2021