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ISLAMABAD: The Cabinet SubCommittee on Agriculture on Friday recommended to the Economic Coordination Committee to cut general sales tax on tractors to 5 per cent from the 16 per cent to facilitate the farming community.
Addressing a press conference after the meeting of the sub-committee Federal Minister for Kashmir Affairs and Gilgit Baltistan Mian Manzoor Ahmad Wattoo said that after the imposition of 16 per cent GST only 6,000 tractors could have been sold in the last six months.
He expressed the hope that with the reduction in the GST the sale of tractors would boost and ease the problems being faced by the farmers.
'Due to increase in prices, tractor industry was facing several problems', the minister remarked.
He also said that after this decision around 20,000 employees and their families of this sector would also benefit.
Manzoor Wattoo said that after the reduction in GST the tractor prices would also come down by Rs100,000, adding that 'today is a good day for people associated with this sector.
He said that availability of tractors would also help increase the production of agriculture.
The minister said the sub-committee also decided that ZTBL would continue to extend soft term loans to farmers for the purchase of tractors.
'Loan scheme for the purchase of tractors has started from today (January 13)', he added.-APP Our Staff Reporter adds from Karachi: The recommendation to decrease the GST on tractors by 11 per cent to 5 per cent was accepted by the Cabinet Sub-Committee on Agriculture in a meeting with tractor assemblers and spare parts makers, held in Islamabad on Friday.
The meeting further observed that bringing down the GST on tractors to zero-rated regime will create revenue problems for the government.
Giving details of the meeting, Pakistan Association of Automotive Parts andAccessories Manufacturers (Paapam) chairman Syed Nabeel Hashmi told Dawn from Islamabad that after the recommendations of the committee, the ECC is likely to approve the reduction in GST on tractors in its next meeting.
'The SRO will be issued immediately after the ECC decision as it was agreed in the meeting,' he added.
'The industry and vendors are now satisfied as the government has taken a step to clear a confusion which led to a decline in tractor sales and left some 20,000 people related to the industry jobless,' Hashmi maintained.
Paapam's Mumshad Ali, who also attended the meeting, said, 'When there was no GST, the government collected Rs5 billion in 2010-2011 in the shape of withholding tax and corporate tax from the sale of 70,000 tractors.
Friday's meeting was attended by Federal Minister for Religious Affairs Syed Khurshid Shah, Federal Minister for Kashmir Affairs Manzoor Watoo, Senior Federal Minister for Industries Chaudhry Pervez Elazhi and Federal Board of Revenue (FBR) chairman Salman Siddiq along with Federal Secretary Industries Aziz Bilour and Advisor to PM Kamal Majeed Ullah. The meeting was also attended by top executive of Millat Tractors Sikandar Mustafa and Laiquddin Ansari.
Federal Minister for Finance Abdul Hafeez Shaikh did not attend the meeting.
On March 11, 2011 the government imposed 16 per cent GST hoping to net Rs7 to eight billion through 16 per cent GST and raise another Rs5 billion through corporate and withholding tax through sale of 70,000 units.
However, the government's aim to get extended revenue did not materialise as most of the farmers and growers suspended their tractor purchase which resulted in sharp decline in sales.
The makers of Fiat tractors (Al Ghazi) suspended its production in August for two months and resumed it in October 2011.
However, on December 15, 2011, Al Ghazi again suspended the production. The makers of Massey Ferguson tractors partially resumed production from January 10 after suspending production on December 20, 2011.
