NA committee rejects GST on agriculture

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ISLAMABAD: The National Assembly’s Standing Committee on Agriculture rejected the proposed reformed general sales tax (GST) on agriculture sector on Saturday.
A meeting chaired by Javed Iqbal Warraich was convened to discuss the impact of GST on agricultural commodities, with the members opining that the tax would destroy the agriculture sector. However, officials of the Federal Board of Revenue (FBR) said the tax would prove beneficial in the long run.
Briefing the committee, FBR chief Iftikhar Qutab said the agriculture sector had enjoyed tax exemptions, but it would not be able to do so under the GST regime, adding that GST was not a new concept and it needed to be implemented properly without exemptions.
The FBR chief said although prices would rise because of the tax, this would also result in a uniformity of sales tax, adding that the government would gain Rs 29 billion to Rs 25 billion in six months instead of Rs 90 billion loss it was presently incurring.
The members asked Qutab to reduce corruption instead of increasing taxation, to which he said there was no corruption in FBR. The members rejected the suggestions nonetheless.
The FBR chief said the government could not charge federal excise duty (FED) on services after the approval of the 18th Amendment, as the tax fell under the domain of provincial governments. He said the federal government had been levying FED on services, even though it fell under the domain of provincial governments.
The Ministry of Finance was negotiating the issues of collection and administration of sales tax on services with the provincial governments, Qutab said, adding that the government had included a provision in the federal bill to integrate provincial GST on services with federal sales tax on goods.