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Aptma approaches CBR for GST slab cut

Sohail Sarfraz

Islamabad: All Pakistan Textile Mills Association (Aptma) has approached the Central Board of Revenue for reduction in general sales tax (GST) slab to eight percent and speedy clearance of held-up rebate refunds.

The association also demanded refund of indirect taxes paid on export of textiles and proposed that commensurate drawback be provided for all indirect taxes paid on textile exports.

Aptma officials held a meeting with the high-ups of the CBR on Thursday to discuss their problems and to suggest remedies in order to revive the textile industry and to give a boost to exports. CBR chairman Riaz Hussain Naqvi and Sales Tax Member Sarfraz Ahmed Khan held talks with Aptma.

They suggested that the rate of additional sales tax should be the same as provided in the income tax ordinance. Aptma officials proposed that the rate of GST should be reduced from 15 percent to eight percent and GST should be levied universally throughout the chain of the textile industry including looms, processing units and yarn merchants.

Huge amount of overdue sales tax refunds has further deteriorated the already weak liquidity position of the textile mills, and the association suggested that all determined refunds should be paid without delay.

The delegation suggested that the matter of refunds be settled amicably to enable improvement in the tight liquidity position of textile mills.

The association proposed that the anomaly of section 73 of Sales Tax Act 1990 be amended. This section restricts the payments through crossed cheque, pay order and bank drafts only and ignores other verifiable banking transactions like letters of credit, telegraphic transfer, etc. The payments made through banking instruments may, therefore, be accepted for adjustment of input tax, they maintained.

To attract investment, the association suggested amendment in the SRO 27(1)/98 dated July 17, 1998, to allow 50 percent of the C and F value of any plant, machinery and equipment to be exported in addition to the exports of the units already done in the previous year.