Economic Co-ordination Committee (ECC) of the Cabinet will take into consideration the comments of Ministry of Finance, Ministry of Industries and Production, Central Board of Revenue (CBR) and other concerned departments before endorsing the decision.
Sources said that the fertiliser sector is likely to be declared as 'value-added industry' for availing concessional rate of import duty as per SRO.439(I)/2001. Presently, a number of 'value-added industries' are enjoying this facility on the import of machinery and apparatus.
However, a separate customs tariff heading (PCT) will be given in budget 2004-2005 to bring all kind of fertiliser machinery/equipment under the 5 per cent slab.
The sources are confident that the reduction in duty on the import of fertiliser machinery/ equipment will be a major incentive for the industry.
The fertiliser policy announced by the former minister of commerce fell short of fertiliser sector's expectations, which prompted the government to devise new methodology for attracting foreign investment, especially for boosting local production of phosphatic fertilisers.
The industry is self-sufficient in production of urea, while a bulk of phosphatic fertiliser is imported.
The government has recently fixed new value of phosphatic fertilisers for the assessment of sales tax at the import stage and local supply of these fertilisers. Value of seven different types of phosphatic fertilisers has been fixed for calculation of sales tax.
These included Dia-Ammonium Phosphate (DAP), Mono-Ammonium Phosphate (MAP), Nitrogen Phosphate Potash Fertiliser (SOP-based), Nitrogen Phosphate Potash Fertilisers (MOP-based); Single Super Phosphate (SSP), Triple Super Phosphate and Nitro-Phosphate (NP).
The revised value would be applicable on both the local supplies of imported phosphatic fertilisers as well as domestic manufacturing.