KARACHI, June 12: The price of imported and locally produced infant milk will go up by Rs30-40 per tin and Rs15-20 per box respectively following levy of 15 per cent sales tax on both imported and locally produced infant milk.

This was stated by office-bearers of Baby Food Manufacturers and Marketers Association — Tahir Khaliq, S.M. Uzair and Manzoor Ahmed — in a joint press conference at a local hotel on Thursday.

They said that according to budget 2003-04, the decision to withdraw sales tax exemption on infant milk would be applicable from July 1, 2003, but the Customs Department has already started demanding 15 per cent GST on consignments awaiting clearance at the port.

Infant formulas had always been free from sales tax. The government had tried to impose sales tax on infant formulas on number of occasions but after very strong reaction from consumers, the implementation was withdrawn on each occasion, they said.

The government, they said, has again imposed the sales tax and this move would deprive infants, who for any reason cannot be breast fed, with the quality nutrition available to them at affordable prices. It will ultimately leave mothers with no choice but to go for cheaper and sub-standard alternates such as fresh milk etc.

They said it was strange that the government had opted to continue with the exemption granted to other dairies such as cream and cheese which were less important in nature and usually consumed by the elite class.

Tahir Khaliq who is also ex-president of the KCCI said that the total market of infant milk was estimated at Rs2.5 billion in which the share of imported item was 50 per cent while the rest is enjoyed by Nestle.

He said the government would earn a revenue of Rs250-300 million by imposing 15 per cent sales tax on imported infant milk and locally made milk.

He said the government should have eliminated the 20 per cent customs duty on import of infant milk to offset the impact of 15 per cent sales tax but it had not provided any relief in the budget. He urged the government to remove the sales tax so that consumers could get cheaper milk.