VAT was imposed on imported powdered milk with effect from November 1st under the new VAT Amendment Act.
However the powdered milk importers cannot increase prices without obtaining approval from the government as maximum prices have been declared already for different varieties of powdered milk.
It has been informed that the powdered milk importers have said that they want to discuss with the finance ministry either to increase the prices based on the VAT imposition or to get VAT on powdered milk exempted.
The government will look into providing any other alternative relief to importers after ascertaining whether there is any truth in the complaints made by powdered milk importers.
At the same time, Finance Minister Ravi Karunanayake says that the prevailing controlled prices of powdered milk which has been determined by the Consumer Affairs Authority will not be changed for whatever reason.
The current maximum controlled price of a packet of 400 grams of powdered milk is Rs.325 while a packet of a kilogram of powdered milk should be sold at Rs.810. (Colombo Gazette)