It is a kind of subsidy for the users of potassic fertilisers, which has been notified on the recommendation of the Food and Agriculture Ministry.
The ministry has requested the tax authorities to reduce the per metric ton value of potassic fertilisers for the assessment of sales tax.
The CBR has already fixed the value of seven different types of phosphatic fertilisers 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 Nitric Phosphate (NP).
Recently, it has been notified that the department will collect advance income tax at the rate of 1 percent of its value on the import of potassic fertiliser. The income tax under section 148 of the Income Tax Ordinance, 2001 shall be collected at the rate of 1 percent of potassic fertiliser import value due to any increase in customs duty and sales tax.
FOLLOWING IS THE TEXT OF THE NOTIFICATION ISSUED ON THURSDAY: In exercise of the powers conferred by clause (46) of section 2 of the Sales Tax Act, 1990, the Federal Government is pleased to fix the value of Potassic Fertilisers both Sulphate of Potash (SoP) and Muriate of Potash (MoP), for the purpose of assessment of sales tax chargeable at the import stage as well as against the local supply of these fertilisers at Rs 4,610 per metric ton.