Govt. to withdraw 50pc GST exemption on sugar

ISLAMABAD: The Federal Board of Revenue (FBR) will send a summary to the Economic Coordination Committee (ECC) for granting approval to withdraw 50 percent exemption in the rate of Sales Tax on sugar, Chairman FBR Salman Siddique told reporters on Wednesday.

After the Regional Commissioners’ Conference ended here at P Block Auditorium, the chairman FBR told media persons that the FBR would send a summary to the ECC for consideration in its next meeting to withdraw exemption of 50 percent in the rate of Sales Tax on sugar.

Currently, the rate of GST on sugar is 8.5 percent and the price of sugar for discharging the tax is fixed at Rs28 per kg, which is much lower than the market price of sugar standing in the range of Rs65 to 70 per kg. “In case of withdrawal of 50 percent exemption on sugar Sales Tax, the sugar will become dearer for Pakistanis,” a market player told this scribe on Wednesday.

On the question of FBR’s target for 2010-11, chairman FBR said that the annual tax target was revised downward from Rs1,667 billion to Rs1,604 billion because of government’s inability to impose the Value Added Tax (VAT) that was aimed at collecting Rs73 billion.

“Now with the proposed taxation measures of 15 percent flood surcharge and 2.5 percent excise duty from April 1, the FBR will strive to achieve its revised target of Rs1,604 billion,” he maintained.

It is relevant to mention here that the FBR was earlier talking about revised target in the range of Rs1,630 billion along with additional taxation before holding talks with the IMF’s team, as the FBR chairman had informed the Senate Standing Committee in the recent past that their revenue target was Rs1,630 billion.