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Ginners Association contests imposition of RGST
Dec '10
Pakistan Cotton Ginners Association (PCGA) has refuted the Reformed General Sales Tax (RGST) and has decided not to approve it. It has decided to contest the imposition of RGST and flood tax at all levels, for the reason that the ginning sector is not in a condition to bear any new tax, and this even includes the Value Added Tax (RGST).

The Senate's Standing Committee's decision of approving the RGST is facing strong objections from various groups, and some believe that, the approval of the bill took place in the absence of a few Senators who were opposing it.

A majority of the political parties were against RGST and flood surcharge, but the Federal Government seemed to be determined to execute the move under pressure from IMF/World Bank, and was even hiding the details and effects of imposition of these taxes.

With the traders shifting the extra tax burden on consumers, imposition of these taxes is feared to give rise to an inflationary situation. Presently, each of the ginning unit pays a tax of around Rs 77,32,000 for each season, and with the imposition of the RGST, this amount is estimated to rise to 88.088 million, compelling the ginners to shut down their units.

If the situation leads to the closure of 1,200 ginning units in Pakistan, there would no substitute available in the country for cotton ginning, pressing and processing activities. It is also seen to jeopardize the businesses of oil-mills, oil extractors, rapeseed and cake sellers.

PCGA expressed grief over the government's approach whereby it intends to impose and collect tax which is eight-times higher than its total investment in the sector. The legislators are functioning as puppets in the hands of IMF/World Bank and other global financial institutions which want to completely exploit the Pakistani industry, to remove its name from the list of exporting nations.

PCGA has warned that, if the legislators try levying such taxes arbitrarily, the ginners would have no other option but to take firm steps to ensure their survival.

Fibre2fashion News Desk-India

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