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Textile bodies vehemently oppose 17% sales tax
Mar '11
An ordinance, which has imposed a 17 percent general sales tax has been vehemently opposed by the textile and value-added textile sector in Pakistan. To add to the woes of the textile industry, the zero-rating facility available for export-oriented units too has been removed, along with.

The 17 percent GST would be imposed on the sale of plants, machinery and equipment and domestic sales of export-oriented items like textiles and carpets.

However, Mr Ijaz Khokhar, Chairman - Pakistan Readymade Garments Association, who spoke to fibre2fashion, clarified that, “Zero rating for the manufacturer cum exporter is still available. The difference being that, the manufacturer who sells his goods locally will pay the tax on their local sales”.

He further informed by saying, “If a manufacturer cum exporter is importing raw materials for export purpose there is no change in the system. He is still within the same zero rating. Only those exporters, who also sell in the domestic markets, will have to pay 17 percent GST”.

“Our domestic consumers and economy is not very strong and this tax would be an extra addition and a burden on our local people. We have suggested that, the govt should start off with just 4 percent GST and gradually increase it.

“The zero-percent tax on import of machinery and parts has been withdrawn. Since we are importing the latest technology to stay competitive, we have recommended the government to restore the zero rating on plant and machinery imports”, he added by saying.

Mr Zubair Motiwala, Chairman - Council of All Pakistan Textiles Associations (CAPTA) also reiterated the statement given by Mr Ijaz Khokhar. He said, “There is no sales tax on the exports of textiles, it is only for local sales, which was not there earlier”.

“The government has decided to withdraw zero-rating facility on 3-4 sectors, including the textile industry. This will make the textile sector uncompetitive and so we have requested that the facility should be restored”.

Fibre2fashion News Desk - India

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