APTMA Demands Restoration Of Zero-rating Facility

All Pakistan Textile Mills Association (APTMA) Punjab Chairman Adil Bashir Tuesday urged the federal government to restore zero-rating and reinstate SRO1125 to enable the industry to deal with the issue of liquidity crunch in the prevailing crisis-like situation

LAHORE, (UrduPoint / Pakistan Point News - 2nd Jun, 2020 ) :All Pakistan Textile Mills Association (APTMA) Punjab Chairman Adil Bashir Tuesday urged the Federal government to restore zero-rating and reinstate SRO1125 to enable the industry to deal with the issue of liquidity crunch in the prevailing crisis-like situation.

He told the media here that the textile industry. being the backbone of the country's economy with more than 60 per cent of the country's export and largest employer of skilled and unskilled manpower, deserved to be treated fairly. The country suffered 64 per cent plunge in export of textile products in April 2020, and the trend was likely to continue in the months ahead. Besides, he said, the plummeted domestic sales to the lowest ebb due to adverse effects of COVID-19, there was an urgent need to mitigate cash liquidity issues of textile industry by reforming the existing regressive sales tax refund system.

The APTMA Punjab chairman claimed that at the time of withdrawal of zero-rating, the FBR had committed to sanction refund claims through the newly introduced FASTER software within 72 hours with no human interaction.

Annexure-H, which is basically a statement of consumption inputs, was declared to be treated as a refund claim. Despite repeated updating in the system, it still has many snags like non-catering for additional sales tax at three per cent, non-provision for Section 8B of the Sales Tax Act 1990, requirement of mentioning of HS Code in eight digits etc. He stressed that legal lacunae and systematic snags like Section 8b, and additional tax may be removed in consultation with the export-oriented sectors.

In order to speed up payment of sales tax refunds, he said, the Annexure-H may be simplified requiring only two digits Customs chapter heading.

He said the tax free procurement and mobility of raw materials and intermediary goods from one registered person to another in the whole value-added chain may be allowed subject to satisfying FBR about actual consumption of inputs in exported goods.

According to him, the Sales Tax refund may be linked with purchase as in case of input tax adjustment and not with the actual consumption which entails heavy financial cost due to a longer period involved in consumption.