Textile exporters want to pay 7.5pc sales tax

FAISALABAD: Textile exporters have suggested paying 7.5 per cent sales tax instead of 17 per cent, and warned if 17 per cent sales tax is imposed on the textile sector, it would block their Rs 500 billion refund capital inside the market that would cause a surge in unemployment and sharp drop in exports.

This suggestion was presented to Prime Minister’s Advisor on Textile Sector Razzaq Dawood and State Minister for Revenue Hammad Azhar by Textile Exporters Association of Pakistan Chairman Khurram Mukhtar during a meeting on Wednesday. The representatives of the Pakistan Hosiery Manufacturers Association, All Pakistan Textile Processing Mills Association, All Pakistan Bed Sheets and Upholstery Manufacturers Association and Power Looms Association were present.

Khurram Mukhtar told the ministers if the government wanted to generate 80 billion rupees sales tax on textiles, it should impose tax on at least 100 large traders and middlemen who are not registered in the FBR despite that they purchase yarn and cloth, stitch it on contract and sell garments worth billions of rupees in the local market. He demanded that the exporters should be exempted from sales tax on electricity and gas and the state bank should be allowed to make ‘direct refund’ under an automatic system. He demanded that exporters should be paid 95 per cent refund as soon as the shipments are made, while the remaining five per cent should be paid after completion of audit.

The ministers and the government side termed certain suggestion practicable but the negotiations would continue on Thursday (today) on the remaining suggestions.