June 1, 2011
Pakistan counters removal of GST exemption


Pakistan Poultry Association (PPA) has fought against the withdrawal of GST exemption on poultry goods in the coming budget reasoning that the prices of chicken will not be affordable for the poor masses.

In a statement issued on Tuesday (May 31), the PPA categorically rejected any formula of taxation and urges the government not to change the current taxation status of the poultry sector including processed chicken as this will hurt its tremendous contributions in providing a healthy diet to fight malnutrition and under-nutrition at affordable prices.

The statement mentioned that a withdrawal of existing exemption of GST on poultry would automatically result in a levy of GST on poultry feed which would be against all norms, principles and philosophy of the GST regime as it is a levy on intermediary product or farmers whereas GST is always recovered from the final product, consumer.

Khalil Sattar, Chairman of PPA also said that the poultry sector helped in mitigating the increase in mutton and beef prices but the hike in chicken prices after imposition of GST coupled with the existing 20% food inflation will not only affect poultry production but also the price of beef and mutton which would go higher eventually.

He noted that an increase in the cost of production cannot be passed on to consumers because prices are strictly governed by demand and supply. Therefore, in the face of losses, large number of farms will close down and subsequently create a substantial short supply which could increase the prices from 40-60% as per experienced in 1996 when GST was levied on poultry feed.

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