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RGST facing opposition from five zero-rated export sectors
Dec '10
The government's decision of passing the Reformed General Sales Tax (RGST) Bill 2010, from the Parliament, has caused the representatives of the five zero-rated export sectors to contest the same. As and when the RGST becomes effective, it would give the FBR officials a free rein to raid any of the exporting units they like, said Zubair Motiwala – Chairman of the Council of All Pakistan Textile Associations (Capta), while speaking at a joint press conference, of the five zero-rated exporting sectors, held at PHMA house.

The value-added textile sector, surgical instruments manufacturing sector, leather and carpet manufacturing sector as well as sports goods producing sector have been included in the zero-rated exporting sectors.

The Capta Chairman expressed disbelief about the tax refund system put forward by the government under the RGST, which is likely to become effective as soon as the RGST bill passed by the Parliament takes the form of a law. He said that, under the new system, 90 percent of the capital of the export units would remain blocked with the tax collectors as refunds.

He contended that, the government failed to fulfil the promises that it had made during the past six months regarding the RGST, and is now asserting that the zero-rated regime too would continue to back the five sectors. Further, while voicing his disbelief, he said that the government is unreasonably adamant on introducing the new software which still has not been tested or the computerised system for RGST refunds.

Meanwhile, the Chairman of the Pakistan Carpet Manufacturers and Exporters Association, Tanveer Muzaffar, also appealed the government to extend the 2005's system of "no payment and no return". He, too, added that imposition of the proposed tax system would cause many of the ongoing businesses to shut down.

Further, the Co-ordinator of the Value-added Textile Forum, M. Javed Bilwani, has warned that if the RGST is imposed then all the zero-rated exporting sectors would resort to strike.

Fibre2fashion News Desk - India

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