GST levied on wheat, pulses, rice, sugar, and spices
Tax Update: 18% GST to be Imposed on Processed and Packaged Wheat, Pulses, Rice, Sugar, and Spices
The Federal Board of Revenue (FBR) has announced that a general sales tax (GST) of 18% will be imposed on the processed and packaged sale of wheat, pulses, rice, sugar, and spices. This decision was shared by FBR member Amjad Zubair Tiwana during a meeting of the Senate Standing Committee on Finance, chaired by Senator Saleem Mandviwalla.
Tiwana clarified that no additional tax will be levied on unpackaged items, providing relief to consumers buying non-packaged goods.
During the meeting, Tiwana also recommended a reduction in the current 8% GST on formula milk. He highlighted that while an 18% GST has been imposed on locally processed milk, it does not apply to formula milk commonly used by poor mothers for their children. Tiwana further noted that he had never witnessed a poor person in the village purchasing expensive formula milk and emphasized the need for dealers and distributors selling this milk to be registered.
In response, Senator Farooq Naek suggested blacklisting the company selling formula milk for tax evasion, emphasizing that sales tax is an indirect tax ultimately borne by consumers.
Senator Mandviwalla acknowledged that a majority of women in the country rely on formula milk for their children and expressed concern over the continuous price increases by packaged milk manufacturers over the past few years. He proposed that if these companies reduce the prices of packaged milk, the committee would consider reducing the tax on it accordingly.
The FBR Chairman added that if the price of packaged milk is reduced by 18% GST on a price of Rs. 600, the FBR will review and adjust the tax accordingly, ensuring alignment with the reduced price.
This update aims to streamline taxation on processed and packaged food items while considering the affordability and accessibility of formula milk for low-income families.