Import of wheat

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Federal Board of Revenue (the Board) issued SRO 99(I)/2021 on 26 January 2021 in which Federal Government has provided exemption from the provisions of S.148 of Income Tax Ordinance, 2001 for the import of wheat by the Trading Corporation of Pakistan.  

Snapshot

Reference No.

SRO 99 (I)/2021

Description

Import of wheat

Date of Issuance

26 January 2021

Amendment

Second Schedule of Income Tax Ordinance, 2001

Objective

To provide the exemption from collection of advance tax on import of three hundred thousand metric tons of wheat through tendering process by the Trading Corporation of Pakistan.

Effective date

Immediate

Explanation

Collector of Customs collects advance tax from every importer of goods on the value of goods in accordance with the requirements of S.148 of Income Tax Ordinance, 2001. Since the Cabinet Division has asked the Trading Corporation of Pakistan to import 300,000 metric tons of wheat to replenish wheat stock in the country, Federal government wants to exempt this import from the payment of advance tax. While the wheat is a staple crop and one of the most important food in Pakistan, the country has been unable to increase wheat production in proportion to increase in its population. Therefore, the country has to import wheat from time to time in order to meet food requirements of its people. Despite being an agricultural nation, people of Pakistan are not able to produce the crop which they eat the most. Following chart shows an analysis of wheat production area and wheat yield over the last 20 years: 


It is clear that area under cultivation has remained steady over the years and no further land was added to produce this important crop. Similarly, no serious attempt was made to enhance the yield per acre. Cumulative average growth rate in yield is less than 1%. Average yield per acre was around 30 maund per acre in financial year 2020 which is much lower than that of India which has achieved average of 40 maund per acre under the same climatic conditions but with people having different work habits.  


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