LAHORE: The value-added textile sector has rejected implementation of the reformed general sales tax (RGST) likely to be imposed from October 1 and said that they would not pay any tax to the government under any new mode whether RGST or the value-added tax (VAT), sources said on Wednesday.
In a meeting with Federal Textiles Minister Rana Farooq Khan, the members of Pakistan Readymade Garments Manufacturers and Exporters Association (PRGEMA) said that they would not pay any new tax.
The meeting was chaired by newly-elected PRGMEA Central Chairman Ijaz Khokhar along with North Zone Chairman Mubashir Naseer Butt.
One of the members said that a huge number of refund cases of the value-added sector are already pending with the Federal Board of Revenue (FBR) for the last two years.
“There is no mechanism in the revenue body to pay refund to the exporters within one month, causing numerous problems for them,” he said.
He accused that the FBR wants to create an opportunity for the government to use exporters’ money for their non-development expenditures.
The textile minister assured and made commitment with the PRGEMA members that he would ask the President and the prime minister to keep the textile sector zero-rated.
“I will ask them not to bring the textile sector in RGST regime and allow them to continue business on zero-rated regime,” said Khan.
Khokhar demanded the minister to impose ban on yarn exports. He said that last year All Pakistan Textile Mills Association (APTMA) was campaigning for free market practices and this year it is seeking ban on cotton exports.
He said ban on yarn exports would help meet the shortage in the domestic market.
He accused APTMA of creating panic by saying huge shortfall in cotton crop.
The minister said that a total of 150,000 cotton bales were damaged due to floods, but some elements are creating panic by saying that 400,000 cotton bales were damaged due to the floods.
“I have visited the flood-affected areas and see the crop situation and there is no such huge loss as was being reported by some elements,” he added.
The PRGMEA chairman also highlighted the problems being faced by the value-added sector due to gas shortage during winter.
He said that the government curtails gas supply to the textile processing industry, which ultimately affects the value-added sector.
He demanded the government to allow the value-added sector to zero-rated imports of finished cloth for the textile sector and also those accessories, which are being used in the value-added sector.