Urea industry suggests government to withdraw General Sales Tax GST on the urea

The CEO of Engro Fertilisers- Mr. Ruhail Mohammad has suggested to the government to withdraw General Sales Tax (GST) instead of giving subsidy on the urea, adding that this will save the industry from a number of issues. The CEO said today that the GST is almost equivalent to the subsidy the government gives on urea therefore; the replacement of the subsidy with GST would not make any difference on the market dynamics.

Commenting on the increase in Di-ammonium Phosphate (DAP) prices, he said the fertiliser companies never agreed to fix them with the federal government. “Since we sell imported DAP, we cannot fix its price. Similarly, the government should not fix prices because one cannot control the international prices of any commodity,” he added. DAP importers have increased prices by Rs50 per 50 kg bag more than once in recent months due to the increase in international prices.

The confusion on fixing DAP prices was created by the Punjab government’s notification which had nothing to do with the position of the federal government. In fact, the federal government did not want to fix price. However, now the Punjab government has also conveyed to the federal government that it has no objection on the market determination of DAP prices instead of its earlier stance to fix it, he said. Mohammed believes the government is not supporting the farmers other than just giving subsidy on fertilisers.

“The government should support the farmer community by helping them increase per acre yield. This will not only make Pakistan self-sufficient in food production but it can also export various commodities like wheat etc and earn foreign exchange,” he added.

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