KARACHI, Dec 26: Exporters have urged the government to exempt molasses exports from sales tax as bulk of the produce is exported.

On an average the country exports 1.6 to 1.8 million tons of molasses annually that mostly goes to European countries, which after processing, use it in edible as well as industrial products.

The Terminals Association of Pakistan (TAP), representative body of molasses exporters, has approached the minister for commerce to assist them in getting molasses exports exempted from sales tax.

At present exporters have to pay 15 per cent sales tax at the time of getting delivery of the produce from sugar mills and get refund after making shipments.

However, the TAP members had been arguing that since 90 to 95 per cent of its production is exported aboard, therefore, to collect ST and refund the same is not pragmatic.

The association further said that by paying ST at 15 per cent the working of exporters was blocked on regular basis, which resulted in liquidity constraints and refund hassles.

It further pointed out that molasses exports are fully documented. All the sugar mills producing molasses are paying sales tax monthly to the sales tax collectorate concerned on the sale proceeds of molasses exporters.

There is a lot of hassles in getting sales tax refund, involving a long time that create cash flow problems for the exporters.