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Credit Guarantees to Provinces for Wheat Procurement by FG – Economic Coordination Committee

Islamabad: The Economic Coordination Committee of the Cabinet met here today under the chairmanship of the Federal Minister for Finance and Economic Affairs Dr. Abdul Hafeez Shaikh here in Islamabad. The ECC discussed at length various summaries moved by the different ministries and seven of them have been approved, which are Establishment of subsidiaries in Tanzania, a request by UBL Pakistan, Institutional Investment in National Savings Scheme (NSS), Public Sector Procurement of Wheat Crop 2011-12, by the provinces. Extension of Date of Completion of BYCO Oil in Pakistan Limited Refinery to avail 7.6 year tax holiday, Exemption of Taxes and Duties (Gas Import Pipeline and LNG Project) for BTU Gas Pricing Policy 2012.

On the summary moved by the Ministry of Food Security and Research on the public sector procurement of wheat Crop, the Committee discussed at length on the requirements by the federal government’s extension of credit guarantees to the provinces. It may be recalled that after the due process of devolution the provinces were allowed to lift the wheat to maintain strategic reserves.

The meeting was of the consensus that the provinces have the inalienable right to lift the wheat but the debate went on the extension of credit cash guarantees to the provinces on the amount of purchasing wheat after the increase in the support price of wheat from Rs.950 to 1050, The ECC after much deliberations agreed to approve the summary.

The ECC has also approved the summary for the extension of date of completion of BYCO Oil Pakistan limited to avail 7.6 years tax holiday. It may be recalled that BYCO Petroleum Pakistan was given tax holiday for 7.6 years and it was to be completed by the end of 2011, however the refinery could not be commissioned by the stipulated time.

The Ministry of Petroleum and National Recourses recommended that the company may be granted extension of the facility up to the end of 2012, which was approved after much deliberation. The other summary approved was related to the exemption of taxes and duties on gas input pipeline and LNG project, moved by the Ministry of Petroleum. The Ministry of Petroleum sought approval of the ECC for:

1. Exemption of Sales Tax / Federal Excise duty (ST/FED) on imported natural gas.

2. Exemption for Sales Tax for EPC Contractors involved in the gas import projects.

3. Exemption from custom duties on HR Coils, Line pipe, Pylons/Piles.

4. Temporary importation of plant, equipment, machinery, LNG Terminals and Peripheral Infrastructures etc. to be allowed for the projects duty free on import cum export basis.

5. Addition of natural gas infrastructure importers and its developers.

6. Collection of applicable taxes, duties and any other levies may be deferred till the commencement of commercial operations of the natural gas and LNG import projects, on the analogy of such facility provided to power Projects by ECC in July 2009.

Other two items that were approved by ECC are: Low BTU Gas Pricing Policy and Fortnightly Price Adjustment of petroleum products.

The meeting among others was attended by Minister for Petroleum and Natural Recourse, Dr. Asim Hussain, Minister for Water and Power Syed Naveed Qamar, Minister for Production, Mr. Anwar Cheema, Minister for Privatization, Mr. Ghaus Baksh and Minister for Railways, Mr. Ghulam Ahmad Bilour, Deputy Chairman Planning Commission, Secretaries for Railways, Finance, Economic Affairs Division, Petroleum and Natural Recourse and other concerned high officials.

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