Chemical Fertilizers (Development Surcharge) Act, 1973

The Chemical Fertilizers (Development Surcharge) Act, 1973 lets the Federal Government collect a special surcharge on chemical fertilizers to capture the gap between what a fertilizer costs to produce or import and what it can legally be sold for. Section 3 requires every fertilizer-manufacturing company, and every stockist holding fertilizer in stock, to pay the Federal Government a "development surcharge" equal to the "differential margin" — broadly, the difference between the maximum sale price and either the ex-factory price (for locally made fertilizer) or the landed cost (for imported fertilizer).

Section 2 defines the key terms: "ex-factory price" and "incidental charges" (like freight and distribution costs) are fixed by government notification based on a factory's production costs; "landed cost" for imports includes the c.i.f. value plus duties, taxes, and fees; and "maximum sale price" is capped by notification at not more than 125 percent of the landed cost.

Section 5 makes it illegal for any company or stockist to sell fertilizer above the notified maximum sale price — doing so is treated as a violation of the Price Control and Prevention of Profiteering and Hoarding Act, 1977, triggering that Act's enforcement provisions. Section 4 allows the Federal Government to grant exemptions or refunds from the surcharge in specific cases, and Section 6 allows the surcharge paid to be deducted as a business expense for income tax purposes under the Income Tax Ordinance.

Sections 7 and 8 give the Federal Government rule-making power and the ability to delegate its powers under the Act to subordinate officers. This is a pricing-control and revenue law specific to the fertilizer sector, originally tied to the 1973 Ordinance it succeeded.