The Economic Coordination Committee (ECC) of the Cabinet is all set to exempt commercial import of sugar from duties and taxes by invoking food security provisions and allow sugar mills to import 0.3 million tons of raw sugar, sources close to Minister for Industries told Business Recorder.
Sharing details, sources said a meeting of Sugar Advisory Board (SAB) was held on December 31, 2020 wherein the stock position of sugar was received. In the last season (2019-20) total production in all provinces was 4.879 MMT and this year as reported by provincial governments it is anticipated to be 5.508MMT, therefore, around 0.650 MMT more sugar is expected to be produced this year as compared to last season (year 2019-20).
However, due to non-availability of carryover stocks this year as compared to 776,000 tons last year (2019-20), Punjab has anticipated shortage of white sugar towards the end of current season, i.e., in October or November 2021. Crushing is in process and a clear position of stocks can only be gauged at the end of crushing activity in April 2021.
The recent price hike indicates that the market has gone into a speculative mode owing to high prices in the last four months of 2019-20 season and anticipated shortage towards end of the current season due to non-availability of carryover stocks.
In order to control current escalation of prices of white sugar, MoI&P has proposed that the government may incentivize import of raw as well as white sugar by invoking food security provisions in relevant laws.
The MoI&P has proposed that the following tax relief may be provided for commercial import of white sugar till June, 30, 2021; (i) reduction of withholding income tax on import of white sugar from 5.5% to 0.25% and; (ii) reduction of value-added sales tax on import of such sugar from 3% to 0%.
MoI&P has also proposed that the government may incentivize the sugar mills for import of 300,000 MT raw sugar upto June 30, 2021 with the following incentives: (i) reduction of withholding income tax on import of raw sugar from 5.5% to 0.25% and; (ii) the permission of such import may be made subject to quantity and quality controls by the Commerce Division and quota allocation should be capped at 50,000 tons per mill on first-come-first-serve basis by the Commerce Division.
The MoI&P has also recommended that Trading Corporation of Pakistan (TCP) may be directed to import white sugar upto 500,000 MTs if and when necessitated during the current season subject to demand as conveyed by Provinces, AJK, GB, ICT and Utility Stores through Industries & Production Division from time to time. As per previous Cabinet decision, the ECC may allow exemption of imports of white sugar by TCP from all taxes and duties at import stage. The Ministry has also sought exemption of Rule 13 and 35 of Public Procurement Rule 2004 for such imports as was provided by the Cabinet in its decision Case No-541/30/2012) for import of sugar last year in order to curtail time of procurement.
ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet is all set to exempt commercial import of sugar...