ISLAMABAD, Sept 29: The Pakistan Vanaspati Manufacturers’ Association (PVMA) on Friday requested the government for an upward revision of sales tax refund on export of vegetable ghee and cooking oil, saying the decrease in refund resulted in lowering of export of ghee/oil to Afghanistan.
“Since the issuance of the recent two SROs, the export of vegetable ghee and cooking oil to Afghanistan has virtually come to a standstill because of non-competitive position of Pakistan’s exports, compared to exports from countries like Singapore and the UAE to Afghanistan,” said PVMA secretary Dr Ghulam M. Samdani.
Mr Samdani said the Central Board of Revenue through these notifications had deprived Pakistani exporters by approximately Rs4,000 per ton in the export of vegetable ghee and cooking oil to Afghanistan, which had become totally unviable and uneconomic.
The other serious impact of these SROs was that large scale smuggling of vegetable ghee/ cooking oil from Afghanistan to Pakistan would commence affecting the domestic vegetable ghee/ cooking oil industry adversely, he said and added that there was a likelihood that some of the vegetable ghee/cooking oil manufacturing units in the areas bordering Afghanistan in NWFP and Balochistan might even close down.
The secretary said new PVMA Chairman Sh. Amjad Rashid along with other office-bearers would meet with the CBR chairman on October 4 to apprise him of the seriousness of the matter and to take corrective steps immediately.
Recently, the CBR vide its SRO August 17, 2006 and Sept 21, 2006 has substantially reduced refund of sales tax, federal excise and duty drawback on import of edible oils, a major input used in the manufacture and export of vegetable ghee/cooking oil.
The ministry of commerce in January 2002 vide its SRO 31(1)/ 2002 dated Jan 17, 2002 allowed export of vegetable ghee/ cooking oil via land route by allowing zero-rate of sales tax, central excise, and normal duty drawback. Subsequently, the CBR vide its SRO 787(1)/2005 dated Aug 6, 2005 slightly reduced duty drawback on export of vegetable ghee from Rs9,681.83 to Rs9,680 per ton.
