In order to oppose imposition of a 3.5 percent withholding tax (WTH) on acquisition of raw material from an intermediary, the Pakistan Cotton Ginners Association (PCGA) has unanimously agreed to halt the purchase of phutti that is seed-cotton from January 17, 2011, PGCA Chairman Masood A Majeed said in a press statement and added that, the protest will go on till the withdrawal of the levy.
Masood together with the other PCGA members said that, a group of the PCGA members would shortly visit the Prime Minister Yousuf Raza Gilani in Multan and would update him regarding their objection and the issues associated with the imposition of the WHT. The delegation thereafter would even call on the Federal Finance Minister and the FBR Chairman.
The PCGA Chairman alleged that, FBR had surreptitiously levied WHT on agricultural produce since January 1, 2011 by way of a SRO-1161 dated December 31, 2010, but the ginners were intimated regarding the same only on January 15 by means of an official letter.
Meanwhile, all the cotton bought by the ginners from any of the intermediaries between January 1 and 15 have been made liable to tax. Thus now all the ginners stand as defaulters since they have neither deducted 3.5 WHT from the middlemen, nor have deposited the same in the national treasury, and are thus liable to be penalized.
Last year the ginning industry had paid a tax of Rs 5715 million, which was four times higher than that paid in the earlier years.
Fibre2fashion News Desk - India