The Cabinet has reduced Additional Custom Duty (ACD) from seven percent to two percent on the import of edible oil with immediate effect, official sources told Business Recorder. The Revenue Division, sources said, informed the Cabinet on July 16, 2019 that in Budget FY20, with effect from July 1, 2019, the rate of ACD was increased from two percent to seven percent on goods subjected to 20 percent and higher tariff slabs, including specific rate slabs.
Since the edible oils are subjected to specific rates of customs duty, ranging from Rs 8,000/PMT to Rs 16,800/PMT, therefore, import of edible oils also stands subjected to 7 percent ACD. Edible oils are daily use items of common man and increase in ACD will increase the cost of living for low income levels. In order to provide relief to common man, the Revenue Division proposed that ACD may be reduced from 7 percent to two percent on import of edible oils falling under Pakistan Customs Tariff codes 1507.1000, 1507.9000, 1511.1000, 1511.9020, 1511.9030, 1512.9100, 1512.1900, 1512.2100, 1512.2900, 1514.1100, 1514.1900, 1514.9100, 1514.9100 and 1514.9900 to the pre-budget position.
An amount of Rs 7.6 billion, approximately, will be borne by the government on account of this relief measure. According to industry, increase in additional customs duty from two to seven percent on the import of edible oil had resulted in increase in prices of cooking oil and created serious disparity between imported soybeans oil and edible oil due as there was considerably lower duties and taxes on soybeans. The industry had submitted revised calculations with revenue impact to the Finance Ministry on the impact of additional customs duty from two to seven percent on the import of edible oil. The data on soybean oil extracted from imported soybeans and enhanced taxation structure on edible oil revealed that the additional customs duty on the import of edible oil needs to be reverted to two percent to avoid massive raise in price of cooking oil.
During discussions in the federal cabinet meeting on July 16, 2019, Prime Minister, Imran Khan reaffirmed the government''s resolve to bring maximum number of eligible people into the tax net. The need to create an atmosphere of trust through effective communication strategy and dialogue was however emphasized.
After according approval of reduction in ACD from seven percent to two per cent on import of edible oils, the cabinet further decided that Chairman FBR will hold consultative sessions with stakeholders and trade associations'' and brief them about government''s determination on tax collection, and encourage them to register without compromising on the government''s policy.
Commerce Division has been directed to prepare proposals aimed at generating trade opportunities for communities living along the borders with Iran and Afghanistan.