KARACHI (May 13 2003) : The All Pakistan Solvent Extractors Associationhas clarified a story that appeared in the May 3 issue of the BusinessRecorder, which said that about 20 percent general sales tax (GST) may beimposed on oil seed imports.
The extractors association said that while the Pakistan VanaspatiManufacturers Association (PVMA) claim they now pay an additional 20 percent GST at the import stage, they conveniently failed to mention thatthey were also entitled to a 15 per cent refund when they sold theirghee/oil at retail level.
Additionally, they are also entitled to a refund on inputs such as tinplates and electricity, resulting in a minimum refund of around 18percent.
It further said that it is meaningless and misleading to compare the dutystructure on oilseeds, which is an industrial raw material, to duties onimported edible oil, which is extracted, refined bleached and deodorised.
The author appears to have completely disregarded the value addition andemployment creating when processing raw material rather than importingfinished products.
The solvent extraction industry also produces vegetable protein meal, anessential ingredient for poultry feed sector.
Prior to the emergence of the solvent extraction industry, the poultryfeed industry relied exclusively on the import of the soyabean meal fromIndia.
If any anomaly exists, the extractors association said that it lies in thefact that Pakistan is one of the only countries where the duty on afinished product is less than that of its raw material.
The first example is that of duty on RBD palm oil being Rs 9.050 per ton,while the duty on crude palm oil is Rs 9.50 per ton.
Similarly, the duty on soyabean meal, if imported from India, is 9percent, whereas the import duty on soyabean seed is 11 percent.
Interestingly enough, India maintains its meal import tariffs at 30percent to protect its local industry and growers.
It also asked: "does Pakistan really expect to expand the localcultivation of oil seeds in the face of such inconsistencies in thegovernment policy?"