LAHORE: All Pakistan Textile Mills Association (APTMA) Chairman Gohar Ejaz will endeavor to convince the government on the maintenance of the zero-rating regime for textile industry under the reformed General Sales Tax (GST).
He will be speaking to the sub-committee of Standing Committee of the National Assembly on Finance. In his briefing he will point out that APTMA is not against the imposition of GST per se, but had major concerns of the mechanism adopted for revenue collection. It is indicated that a mechanism where the intermediary process may be zero rated is advocated and domestic sales are to be charged 15 percent GST. This would ensure collection of Rs 25 billion levy on local sales.
Earlier, APTMA held a detailed presentation for the National Assembly (NA) standing committee chaired by Fauzia Wahab. The convincing arguments put forward by APTMA moved the government to constitute a sub-committee of the same body headed by Begum Shahnaz Wazir Ali. Other members of the sub-committee include Shahid Khaqan Abbasi, Faisal Saleh Hayat, Kashmala Tariq and Abdul Rashid Godil.
It must be noted that APTMA Chairman was due to visit Turkey on occasion of the PM’s visit on December 6. However, the urgency of matter compelled him to stay back and attend the December 7 meeting and generate momentum for the campaign on the continuity of the zero rating regime for textile industry under the GST in the NA.
APTMA has welcomed the government’s step in taking the viewpoint of APTMA on the issue and expressed his hope that the zero rating regime will be retained.
He referred to the FBR chairman in particularly glowing terms
He insisted that the APTMA was fully supportive of the government’s efforts to introduce the documentation of economy through consumption tax. However, he clarified that the textile industry was already documented and contributing heavily to the national exchequer.
APTMA is indicating that the imposition of GST in present form will lead to an adjustment of Rs 390 billion during a year throughout the supply chain and Rs 127 billion of net refund after adjustment; causing serious liquidity crunch and posing a great threat to the viability of the largest export industry which earned $10 billion during last fiscal year and will potentially earn $15 billion during current year. Gohar reiterated that the government should impose consumption tax only on domestic sale of finished textile products.
Textile Ministry attempts to counter APTMA lobbying: The Textile Ministry conveyed an immediate message to the value added sector on Monday and urged them to attend the crucial meeting of the sub committee of the National Assembly on Finance.
The meeting will discuss implementation of the reformed General Sales Tax (GST) in the textile sector. According to official sources, the Textile Minister Rana Muhammad Farooq sent an immediate message to the representatives of the value added sector after learning that the All Pakistan Textile Mills Association (APTMA) was lobbying for imposition of reformed GST only on finally produced value added products. The meeting of the sub committee is to be held on Tuesday.
The Minister asked representatives to come prepared to counter arguments of APTMA. During a presentation to the standing committee, APTMA had claimed that reformed GST imposition at different stages of value addition in textile sector would block a massive amount worth Rs 518 billion. They suggested that the government should consider imposition of reformed GST only on the valued added products, as this was the final product to be sold.
None of the representative of valued added sector was present to give counter arguments in the meeting. Since the tax authorities challenged the figure given by APTMA, a sub committee consisting of members of the committee, representatives of APTMA and Federal Board of Revenue (FBR) was formed. By Amer Sial
