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RGST in textile sector can create debt cycle – APTMA
01 Oct '10
1 min read
All Pakistan Textile Mills Association (APTMA) recently said that, it is apprehending a one more debt cycle of Rs. 100 billion, in event of cessation of zero rating regime for the textile sector.
APTMA representatives while narrating the adversities following RGST said that, ending of the zero rating regime for textiles may lead the textile sector and exports to a snapping point.
The zero rating regime was made applicable to all segments of textile sector through the Finance Act, 2005, in order to uplift the export-oriented textile sector, and to circumvent issuance of fake or vague invoices, for which the tax department was paying refunds in excess of the tax collected.
Assessment put forward by the industry experts suggests that, applying RGST regime to the textile chain would beget an immediate liquidity crisis, as Rs. 100 billion paid by the sector by way of advance tax would get entangled with the Sales Tax Department, and may result in another debt cycle.
Applicability of RGST regime may further add to the troubles of already ailing industry loaded with heavy interest rates, deficit and mounting prices of cotton, thus hampering overall growth of the industry.
APTMA representatives while narrating the adversities following RGST said that, ending of the zero rating regime for textiles may lead the textile sector and exports to a snapping point.
The zero rating regime was made applicable to all segments of textile sector through the Finance Act, 2005, in order to uplift the export-oriented textile sector, and to circumvent issuance of fake or vague invoices, for which the tax department was paying refunds in excess of the tax collected.
Assessment put forward by the industry experts suggests that, applying RGST regime to the textile chain would beget an immediate liquidity crisis, as Rs. 100 billion paid by the sector by way of advance tax would get entangled with the Sales Tax Department, and may result in another debt cycle.
Applicability of RGST regime may further add to the troubles of already ailing industry loaded with heavy interest rates, deficit and mounting prices of cotton, thus hampering overall growth of the industry.
Fibre2fashion News Desk - India
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