Federal Board of Revenue (FBR) Amjad Zubair Tiwana has told a Senate panel that general sales tax at the rate of 18% will be imposed on the processed and packaged sale of wheat, pulses, rice, sugar, and spices.
The meeting of the Senate Standing Committee on Finance was held under the chairmanship of Senator Saleem Mandviwalla.
Tiwana stated that no additional tax has been levied on unpackaged items.
He recommended reducing the 8% GST currently imposed on formula milk.
He said an 18% GST has been imposed on locally processed milk, which is not the formula milk used by poor mothers for their children.
Tiwana said that he had never seen a poor person in the village buying expensive formula milk for their children. He added that the dealers and distributors selling this milk are also unregistered.
Senator Farooq Naek stated that the company selling this formula milk should be blacklisted for tax evasion. Sales tax is an indirect tax that has to be paid by the consumer.
Mandviwalla stated that the majority of women in the country use formula milk for their children. The companies manufacturing packaged milk have been increasing prices for the past 3-4 years.
He said that if the company agrees to reduce the prices of packaged milk, they would consider reducing the tax on it.
The FBR Chairman stated that if the price of the packaged milk is reduced by 18% GST on a price of Rs. 600, the FBR will consider reducing the tax accordingly. The FBR will deliberate on reducing the tax in line with the reduced price.
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