Interviews
VAT could crush textile industry by wedging funds
29 May '10
2 min read
Pakistani textile industry opposes the Value Added Tax (VAT) policy, as according to them, it will cripple the backbone of the country's economy.
Although the industry was to enjoy zero-rates under the VAT policy, it would still encounter problems of tax payment and refunds, which would create a fund crunch, averred, M Jawed Bilwani, coordinator of Value-added Textile Forum, a representing body of 14 value-added textile associations.
In 1996, when the sales tax policy commenced, the textile industry was rated zero, but yet it paid, which was later refunded. But this process turned complicated, resulting into extra expenditure on sales tax staff and stopped huge funds of the textile industry.
Later on, all the legal companies were registered properly and the trouble of handing out invoices was discarded permanently.
As of now, the industry is suffering from power failure for certain durations, higher rates of power and gas and several duties and taxes, which have turned the textile industry business more costly as compared to its neighbouring nations. Above this, if the VAT policy is implemented strictly on the industry, then it will lead to adverse dearth in funds, explained Bilwani.
Bilwani has urged the government to not overload the textile industry with VAT and instead broaden their tax net and involve other industrial sectors, which will help generate more revenue for the country.
Although the industry was to enjoy zero-rates under the VAT policy, it would still encounter problems of tax payment and refunds, which would create a fund crunch, averred, M Jawed Bilwani, coordinator of Value-added Textile Forum, a representing body of 14 value-added textile associations.
In 1996, when the sales tax policy commenced, the textile industry was rated zero, but yet it paid, which was later refunded. But this process turned complicated, resulting into extra expenditure on sales tax staff and stopped huge funds of the textile industry.
Later on, all the legal companies were registered properly and the trouble of handing out invoices was discarded permanently.
As of now, the industry is suffering from power failure for certain durations, higher rates of power and gas and several duties and taxes, which have turned the textile industry business more costly as compared to its neighbouring nations. Above this, if the VAT policy is implemented strictly on the industry, then it will lead to adverse dearth in funds, explained Bilwani.
Bilwani has urged the government to not overload the textile industry with VAT and instead broaden their tax net and involve other industrial sectors, which will help generate more revenue for the country.
Fibre2Fashion News Desk - India
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