About 11,235 tractors manufactured in Q1, grew by 17.17%
ISLAMABAD: Domestic tractors manufacturing during first quarter of current financial year has witnessed about 17.17 % growth as compared to the production of corresponding period of last year.
During the period from July-September 2020-21, about 11,235 tractors were assembled locally as compared to the assembling of 9,589 tractors of the same period of last year.
According the provisional quantum indices of Large Scale Manufacturing Industries (LSMI) released by Pakistan Bureau of Statistics for September 2020, domestic tractor production witnessed about 13.42 percent increase in September, 2020 as compared to the same month of last year.
In month of September, 2020, about 4,555 tractors assembled as compared to the assembling of 4,016 tractors during corresponding month of last year, it added.
It is worth mentioning here that government under its Agricultural Fiscal Package has approved Rs1.5 billion sales tax subsidy on locally manufactured tractors in order to promote mechanization in agriculture sector to enhance per-acre crop output in the country.
The government had announced a fiscal package of over Rs1,200 billion in the wake of COVID-19 pandemic to provide financial assistance for the development of agri-sector in the country.
Out of this package, an amount of Rs 50 billion was earmarked for relief to agriculture sector and under the package, sales tax subsidy at rate of 5% to locally manufactured tractors for one year was also approved as 5% sales tax was applied on the sale of each tractor.
There are two main manufacturing units in Pakistan including Massey Ferguson and Al-Ghazi having market share of 60% and 40%, respectively and 5% sales tax was applied on the sale of each tractor and annual sale of both the units during 2019 was 41,000 units and average sales tax was around Rs 60,000 per tractor.
Sales tax subsidy to locally manufactured tractors was offered for one year and the total cost of subsidy was Rs1.5 billion and subsidy to locally manufactured tractors was for one year.
It is worth mentioning here that overall output of LSMI in creased by 4.81% for July-September 2020-21 compared to July-September 2019-20. - APP