GST to cause Rs15 to 30 hike in 20kg flour bag: millers

LAHORE: The price of a 20-kg wheat flour bag could increase by Rs 15 to 30 as a result of 17 per cent General Sales Tax (GST) on wheat bran, warned flour industry representatives here on Monday.

Through an official correspondence, the federal government notified that no tax has been levied on wheat products except bran. It is very clear that wheat flour is exempted from sales tax, said Majid Abdullah, a leading flour miller. However, he expressed fear that price of flour could increase due to high tax rate being imposed on bran. He was of the view that wheat bran should have been given exemption. Talking about modalities of GST collection, Abdullah said it is very difficult to collect right amount of tax since percentage of bran extracted from wheat varies mill to mill.

Let's say, some mills extract up to 22 per cent bran to market white flour while some used to derive 15 per cent bran only. Hence, he maintained that it would be impossible to determine real applicable GST. Asim Raza, group leader of Pakistan Flour Mills Association (PFMA), said tax on wheat bran would ultimately be transferred to flour price. He asked the government to withdraw decision of slapping GST on bran, terming it a counter-productive move.

Khaleeq Arshad, a veteran flour miller, said that clear-cut instructions of FBR are still awaited as far as giving exemption to wheat products are concerned. Earlier, FBR notified that new serial number 59 has been added whereby the products of milling industry, sold in retail packing bearing brand names, have been subjected to reduced rate of 10pc.

However, this serial excludes wheat and meslin flour even if in retail packing or bearing brand name. Under serial number 19, the products of milling industry, as sold in retail packing bearing brand names, have been excluded from purview of exemption, however, wheat and meslin flour shall remain exempt even if so packed or sold under a brand name. Redundant PCT Heading 1102.1000 has also been omitted.