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Dairy industry’s sales tax refund claims cross Rs12 billion level

Lahore, November 28, 2014 (PPI-OT): The dairy industry, engaging millions of farmers in milk supply chain to provide unadulterated and hygienic milk to the people of Pakistan, is facing liquidity crunch to continue its operation smoothly, as the sector’s sales tax refund claims have crossed the amount of Rs.12 billion during last three years.

This was pointed out in the meeting of the Executive Committee of Pakistan Dairy Association (PDA) chaired by its chairman Faisal Malik. The PDA Executive Committee, showing serious concern over long delay in sales tax refund claims, criticized the Federal Board of Revenue for not paying member dairy companies’ refunds since 2010-11.

The EC meeting lamented that the FBR which was established with an objective to facilitate the industry, has now been turned into a money making machine and the people sitting at the helm are not only unaware of the ground realities but are least concerned about the problems and the day-to-day challenges being faced by the businessmen.

At this point when the economy is passing through very critical times because of the shortage of gas and electricity, wrong policies of the FBR is not only burdening the dairy sector but also discouraging new investment by the private sector in this industry.

“If the dairy sector is paid its sales tax refund claims, it will be in a position to expand its business which will increase employment opportunities in the country,” participants of the meeting said. However, if these genuine and legitimate claims are not entertained, the exiting stakeholders would be unable to carry on their business operations leading to a collapse of the entire dairy sector and the millions of people associated with it would be deprived of their regular source of income, they added.

Addressing the meeting, PDA chairman Faisal Malik said that the dairy sector provides safe, unadulterated and hygienic milk to the masses unlike most of the informal loose milk sellers of the country. The dairy sector is attached with more than 300,000 farmers directly, besides associating millions of people with the milk supply chain indirectly, providing them with a reliable source of income, trainings and facilities to increase their milk production.

As an essential food item and also due to non-existence of subsidy to the dairy industry, the government has included milk in zero sales tax regime but the FBR has become a big hurdle in the way of governments’ public-oriented policies to continue this facilitation to the masses.

The PDA, which consists of all players in milk farming and processing, also hinted at discontinuing supply of milk to Islamabad as a protest against non-payment of refunds. However, the PDA chairman at this stage has deemed it appropriate to bring it to the notice of the government and make it aware of the consequences of delay in refunds of billions of rupees.

He added that curtailed operations of the documented sector would also discourage the documentation drive, besides hampering tax collection target of the FBR.

For more information, contact:
Sarfaraz Rehman
Pakistan Dairy Association
51 – A, Block B – 1, Gulberg III,
Lahore, Pakistan.
Tel: 021 35296000
Fax: 042 35778494,

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