PCPA demands government withdraw GST on pesticides

Staff Report

ISLAMABAD: The Pakistan Crop Protection Association (PCPA) on Sunday demanded the government withdraw the 18 percent general sales tax (GST) on pesticides or bring it at par with the fertiliser industry to reduce the farmers’ input costs.

PCPA Chairman Ejaz Chaudhry was expected to meet the Central Board of Revenue (CBR) officials today (Monday) to formally present the PCPA’s case.

The association is an organisation of 70 companies engaged in import, formulate and distribute pesticides in Pakistan.

The PCPA claimed that the 18 percent GST on insecticides and pesticides had led to an increase in the prices by around 24 percent, thereby enhancing the input costs of the already hard pressed farmers.

The current share of the pesticide business in the country was around Rs 12 billion, which was mostly import oriented. The government charged 15 percent GST at the import stage while 3 percent was charged at the retail stage because of value addition and other costs at the packing stage.

The PCPA was contending that the government charged 15 percent GST from the fertiliser industry and in case of pesticides, it was 18 percent, which was not just on the part of the government since both ingredients were for agriculture purposes.

The higher price of pesticides was one of the reasons for low per acre yield in Pakistan, which was also the lowest in the world’s main agriculture countries.

The PCPA has the share of around 83 percent of the pesticide business in Pakistan in terms of pesticides’ sale in litres. In monetary terms, it came to around 67 percent, while multinational companies had a market share of 17 percent in terms of litres and made 33 percent in terms of cash.

The local industry employed around 50,000 people, which meant the same number of families’ livelihood depended on the industry.

The PCPA was of the opinion that if the government agreed to do away with the 3 percent sales tax at the retail stage, the industry would respond by reducing their prices by 10 percent that would help increase the per acre yield and at the same time reduce input cost of the farmers.

The PCPA was also of the view that if the government, under the IMF conditions, could not completely remove the GST on pesticides as has been done on medicines, it should at least rationalise the tax by collecting 15 percent GST at the source only.

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