Pakistan FBR to decide on levying GST on textile segments

06 Jul '12

2 min read

The Chairman of Federal Board of Revenue (FBR) has been asked by the National Assembly Standing Committee on Textile Industry to find a solution to the long-pending issue of bringing some of the textile segments under the ambit of the General Sales Tax (GST).

The issue of levying GST on services, sizing and powerlooms sectors of textile chain is under discussion for the past two years in Pakistan.

Presenting his case before the Standing Committee, Mr. Haleem Aslam Malik, Chairman of Textile Sizing Association of Pakistan, said initially the FBR issued SRO 238, which imposed tax on local textile sales, six percent GST on spinning sector, and 4 percent GST on processing sector.

Subsequently, however, powerlooms, sizing, hosiery and towel sectors were exempted from GST, he said.

Through its SROs 1181 and 1125, the scope of GST was extended to powerlooms and sizing upon sales to unregistered buyers. The FBR included sizing and powerlooms segments in textile processing sector and increased the rate of GST from 4 percent to 5 percent.

Several rounds of talks have been held with tax authorities during the last two years, but no final decision has been arrived, said Mr. Malik.

He stressed that sizing is a cottage industry and majority of players are unregistered, and imposition of GST will result in a major crisis for these firms.

Fibre2fashion News Desk - India

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