The Federal government has decided to exempt taxes on sugar import, hence, the import of 300,000 metric tonnes of refined crystal white sugar will be fully exempted from withholding tax and sales tax.
The federal government has waived the withholding tax and 17% sales tax on the import of 300,000 metric tonnes of sugar to overcome the sugar crisis in the country and normalize sugar prices, according to the Federal Board of Revenue (FBR) has officially issued 2 notifications, The Nation has reported.
The notifications said that the import of 300,000 metric tonnes of refined crystal white sugar imported by the Trading Corporation of Pakistan would be fully exempted from withholding tax and sales tax. It may be recalled that in view of the rise in prices due to the sugar crisis in the country, the Economic Coordination Committee (ECC) had recently approved the import of 300,000 metric tonnes of sugar through the Trading Corporation of Pakistan to improve the supply of sugar in the country.
In order to normalize the prices, the FBR has issued a notification to the Trading Corporation of Pakistan which provides a full exemption from sales tax and advance income tax (withholding tax) on sugar imports.
According to The Nation, The Ministry of Industries and Production told ECC that a meeting was held on March 18, 2020, of Sugar Advisory Board (SAB), it was observed during the meeting that 0.442 million tonnes per month would mean that the estimated available stock of sugar which is 5.634 million tonnes would be enough for consumption till December 2020 and there would be a remaining of 0.296 million tonnes at the time of the next reaping season. It was decided in the meeting that there were adequate stocks and balances at the end of the crop year which would be 0.271 million tonnes @ 0.442 million tonnes/ month average, according to normal off-take /consumption pattern.
However, the current stock position has been reduced dramatically, stocks reduced by 50 percent as compared to the last meeting which meant that the stocks declined from 3.365 million tonnes to 1.685 million tonnes. As a result of this unusual decline the stocks’ would last only till mid-November 2020, which was before the start of the next crushing season. Therefore, the ECC had agreed to allow the import of up to 300,000 MT sugar.