Government of Pakistan announced a Fiscal Package of over Rs. 1200 billion in the wake of Covid-19 Pandemic.
Out of this package, an amount of Rs. 50 billion was earmarked for relief to Agriculture Sector. The Economic Coordination Committee (ECC) in its meeting held on 13-5-2020, approved the proposals submitted by NFS&R and were ratified by the Cabinet vide Cabinet Division’s Memorandum No 1/20/2020 –com dated 19th May, 2020 & revised Details of the Fiscal Package for Agriculture are given below:
Sales tax subsidy @ 5% to locally manufactured tractors for one year. At present 5% sales tax is applied on the sale of each tractor. Annual sale of both the units during 2019 was 41,000 units and average sales tax is around Rs.60.000 per tractor. Sales tax subsidy to locally manufactured tractors is for one year. The total cost of subsidy is Rs.1.5 billion
There are two main manufacturing units in Pakistan viz. Massey Ferguson and Al-Ghazi having market share of 60% & 40%, respectively. At present 5% sales tax is applied on the sale of each tractor. Annual sale of both the units during 2019 was 41,000 units and average sales tax is around Rs.60.000 per tractor. Sales tax subsidy to locally manufactured tractors is being offered for one year. The total cost of subsidy is Rs.1.5 billion .
Federal Board of Revenue will notify GST subsidy (set aside 5% GST on locally manufactured tractors for one year)
Local Tractor manufacturers will report to FBR and the Ministry on 5th day of every following month.
Ministry of National Food Security & Research may ensure through Forensic Audit on quarterly basis to confirm proper utilization of the subsidy for the benefit of farmers.Area /Jurisdiction & Duration for the Subsidy includes all Pakistan, during the fiscal year 2020-21.
