ISLAMABAD, Dec 27: The government on Wednesday slashed the assessment value for the levy of 15 per cent general sales tax (GST) on sugar, causing a Rs4.03 per kg decrease in the ex-factory price of the commodity to Rs29.32 per kg from Rs33.35.
Mills will now pay GST on the fixed value of Rs25.50 per kg instead of the earlier Rs29 per kg to control its price in the domestic market. With the fixation of the ex-factory price at Rs29.32 per kg, which includes Rs3.82 GST, the government expects the retail price of sugar to remain within the range of Rs34-Rs36 per kg.
A senior official of the Central Board of Revenue (CBR) told Dawn that the price fixation would be reviewed monthly in consultation with the Pakistan Sugar Mills Association (PSMA).
He said if the retail price of sugar escalated, the fixation value would be revised upward.
The decision to reduce the assessment value was announced through a sales tax notification SRO1269 of 2006 issued by the CBR, amending its earlier notification SRO564 of 2006.
The CBR fixed the value, noticing that different mills had announced different rates, ranging from Rs28-Rs32 per kg, said the official.
The variation in ex-factory price of sugar would now be removed at both domestic and import stages, he said, adding that the move would help reduce the price of sugar and remove the possibility of any sudden increase in the price of sugar, which at one stage had crossed Rs40 per kg.
Meanwhile, an official of the Ministry of Agriculture told this correspondent that cane crushing would be completed as per the announced schedule. He said almost all mills in the province of Punjab had started crushing.
An estimated 52 million tons of cane production this year is expected to produce 3.8 million tons of sugar as against a requirement of 3.7 million tons.
The carryover stocks of 0.6 million tons, lying with the Trading Corporation of Pakistan, would lift the total production to around 4.4 million tons.
“The available sugar stocks are much more than the requirement” leaving no room for millers and farmers to exploit the consumers this year, said the official.
