Wheat, onion, tomato smuggling to be checked

ISLAMABAD: In a bid to reduce price hike, the PTI government is considering to reduce General Sales Tax (GST) on sugar from standard rate of 17 to 5 percent only for domestic consumers.

The government has estimated that the reduction in GST rate from 17 to 5 percent will bring down the price of sugar by Rs9.72 per kg in the domestic market against average existing price of Rs80.9 at the moment.

It will cause loss to national exchequer to the tune of Rs21 billion with reduction in GST rate. “The prime minister will finalise further steps for reducing the price hike in next two to three days,” official sources confirmed to The News after attending high-level meeting chaired by Prime Minister Imran Khan here on Monday.

Federal Minister for Planning Asad Umar presented detailed briefing to the premier and recommended different steps to reduce price hike of essential food items.

When this scribe contacted Minister for Planning and Development Asad Umar on Monday and inquired about the proposed reduction in GST rate from 17 to 5 percent on sugar, he replied “recommendations will be finalised in 2 to 3 days”.

The premier was informed about latest situation of food items and apprised that wheat flour production stood at 24.358 million tons out of which it was exported 0.163 million tons. The carryover stocks was hovering around 3.77 million tons so net availability with the government was 27.97 million tons against consumption requirement of 20.008 million tons. The PM was told that the current average price of wheat flour stood at Rs45.81 per kg against Rs39.50 last year so the average price increase of wheat flour witnessed over Rs6 per kg. Now it is recommended to ensure regular supply of wheat from public sector stocks, import of wheat by private sector and early procurement of wheat soon after harvesting in coming season.

On sugar situation, the premier was informed that the production of sugar stood at 5 million tons and the carryover stock was standing in the range of 537,000 tons so the net availability of sugar touched 5.537 million tons against total consumption requirement of 5.674 million tons. The current price of sweetener was hovering around Rs80.9 per kg against last year price of Rs58.59 per kg so its prices went up by Rs22 per kg in the domestic market or 37.37 percent. Now the government is recommended to incentivise import of 0.3 million tons through removal of all taxes and duties, discourage hoarding through taking stern action and reduction in GST rate from 17 to 5 percent.

In case of Rice IRRI-6 and Basmati broken, there is no intervention recommended from the government despite increase in its prices by Rs6.33 and Rs5.19 per kg respectively in the domestic market.

On potatoes, the prices are declining in the domestic market and will further decline upon arrival of new crop. On the onion, the premier was told that there was need to keep strict vigilance keeping in view porous border so watch on export through non-tariff barriers is recommended.

The chicken prices had gone up to Rs180 this year on average against Rs138.9 per kg last year so its prices went up by Rs41 in the market, however, its prices are currently on decline so no immediate step is required.

On ghee/cooking oil, the total production stood at 0.456 million tons while palm oil import stood at 3.344 million tons so net availability is 3.8 million tons. Its market prices increased from Rs202.41 per kg last year to Rs254.33 per kg so it went up by Rs51.92 per kg. Total government duties and taxes stood at Rs49.4 per kg so reduction in duty and taxes on 3.1 million tons in shape of Sales Tax at VAT mode at rate of Rs14 per kg it is going to cost Rs44 billion. The total duty/taxes at import stage @ Rs35 per kg and the total tax stood at Rs110 billion.

They also informed the premier to keep close watch on prices of pulses. On tomatoes, it is recommended to ensure availability in April, June, September and October.

Meanwhile, Prime Minister Imran Khan directed the provincial governments to immediately review proposals regarding reducing prices of essential commodities so that it could be formally announced, saying provision of relief to the masses is the government’s top priority.

The government decided to double the wheat procurement target this year in order to bring stability in the commodity's price. The government also decided to further accelerate administrative measures against the hoarding of essential commodities.

The decision to this effect was taken here at a meeting chaired by Prime Minister Imran Khan, reviewed the prices of essential commodities and their demand and supply.

The forum decided to take all necessary steps to curb smuggling of wheat, onion, tomato and other items from the eastern and western borders. The meeting discussed at length various proposals to stabilise and bring down the prices of items such as wheat flour, sugar, potato, tomato, onion, ghee and pulses.

Khyber Pakhtunkhwa and Punjab governments were asked to review the proposals to bring down the prices of wheat flour. As regards sugar, it was decided that the sugar advisory board through third party evaluation will determine its price so that a reasonable rate for the commodity could be fixed at the official level.

The meeting directed the Ministry of Commerce to frame a mechanism in consultation with the stakeholders in order to pass on the relief of reduction in the international prices of ghee to the masses.

Speaking on the occasion, Prime Minister said bringing stability in prices of essential commodities and reducing them to the possible level was among top priorities of the government.

He said the government had focused its entire attention on provision of relief to the poor people so that they could get essential commodities at reasonable prices and the burden of inflation on these segments could be reduced. The prime minister said special attention should be given to check smuggling and hoarding.