No price hike on essential items - Trade Minister

COLOMBO: Trade, Commerce and Consumer Affairs Minister Bandula Gunawardena yesterday ruled out any possibility of an increase in the prices of essential commodities as 12 such commodities declared as essential commodities have been exempted from taxes.

Addressing the media Minister Gunawardena said that the criticism of the main Opposition is invalid as 12 commodities namely potatos, big onion, gram, green gram, cowpea, dhal and mysoor dhal, batana, dry chillies, canned fish, Dubai sprats and Thai sprats have been exempted from taxes as they have been declared as essential commodities under the Consumer Affairs Act.

The Minister pointed out that these essential commodities have been exempted from the Value Added Tax, Social Responsibility Levy, Port and Aviation Levy, Cess, Import Duty and also the Nation Building Levy. They will not apply to these essential commodities and are also exempted from the newly imposed Nation Building Levy.

"They will come under the Special Commodity Levy, Rs.1 per one kilo", the Minister added.

The Minister also said that the price of milk powder will not be affected by the increase in the special commodity levy from Rs.5 per kilo to Rs.15 per kilo.

Explaining in detail the Minister said the current prices on milk powder had already been decided when the prices of bulk milk powder was US $ 4,500 per metric ton in the world market and the price of milk powder has come down to US $ 3,200 per metric ton in the world market.

"Therefore, there is no need to have a price hike for milk powder due to increase of Special Commodity Levy on milk powder", the Minister pointed out.

He also pointed out that the devaluation of the US dollar in the world market has also contributed to the reduction of milk powder price in the local market.

Minister Gunawardena yesterday took steps to convene all the milk powder importing agents to the Trade Ministry to discuss matters relating to the reduction of milk powder prices.

Minister Gunawardena also said that milk powder will be gazetted as an essential item under Consumer Affairs Act enabling control in the price of milk powder, if the agents do not agree to reduce prices.