The government has withdrawn its major decision of reducing duties and taxes on the import of palm oil and palm olein to reduce the prices of ghee and cooking oil in the local market.
The Minister for Planning and Development, Asad Umar recently stated that the government has decided to reduce the sales tax from 17 percent to 8.5 percent, and the customs duty from Rs. 10,000 metric tons to Rs. 5,000 metric tons, and abolish the Additional Customs Duty on the import of palm oil and palm olein.
He said that the international prices of edible oil have increased by 48 percent as compared to a 38 percent increase in the domestic market, and that the Federal Board of Revenue will issue the necessary statutory regulatory order when the Minister of Finance returns from the USA.
Informed sources told ProPakistani that the matter of the reduction in duties and taxes on the import of palm oil was not taken up in the meeting of the Cabinet on Wednesday, and that neither the Ministry of Industries & Production nor the Revenue Division have submitted summaries to the Cabinet in this regard.
The reduction of duties and taxes on the import of palm oil was linked to the reduction of its prices in the local market. The government has stopped presenting summaries to the Cabinet on this issue because the industry has failed to commit to a reduction in prices.
Sources in the Ministry of Industries & Production said, “Apparently, the government has temporarily dropped the idea of reducing duties and taxes on the import of palm oil and palm olein”.
The importers are waiting for the Federal Board of Revenue’s (FBR) notifications on reduced duties and taxes on the import of edible oil after the announcement by Minister Asad Umar.
The FBR has not issued statutory regulatory orders (SRO) for any reduction in duties and taxes as announced by Minister Asad Umar. His announcement about the reduction in sales tax, customs duty, and additional customs duty (ADC) on the import of edible oil is not practically possible until the FBR issues the required notifications.
These notifications will only be applicable to the future import and clearance of edible oil. This reduction is not valid for the existing stocks of ghee and cooking oil in the market. The industry cannot reduce the prices of ghee and cooking oil on the existing stocks in the market. The consignments to be cleared on the reduced rates of duties and taxes are only possible after the issuance of the SROs by the FBR. The existing ghee and cooking oil products in the market will be sold at the current prices because these items have consumed edible oil at higher rates of duties and taxes applicable on already cleared previous consignments.