Tractor assemblers seek release of Rs6bn sales tax refunds

Published August 10, 2021
Tractor vendors have criticised the Federal Board of Revenue and its sub-organs for delaying billions of rupees’ sales tax refunds of the industry. — Reuters/File
Tractor vendors have criticised the Federal Board of Revenue and its sub-organs for delaying billions of rupees’ sales tax refunds of the industry. — Reuters/File

KARACHI: Tractor vendors have criticised the Federal Board of Revenue and its sub-organs for delaying billions of rupees’ sales tax refunds of the industry despite the full assurance of the ministry of industries and production and FBR’s high-ups.

To resolve the issue, chairman and senior vice chairman of the Pakistan Association of Automotive Parts and Accessories Manufacturers (Paapam) Abdul Rehman Aizaz and Abdul Razzak Gauhar had informed Industries Minister Khusro Bakhtiar in a recent meeting about the Rs6 billion stuck-up sales tax refunds of the tractor assemblers for the past 18 months.

They told the minister that if the refund is not released, its impact would be devastating on the tractor assemblers and their vendors.

According to Paapam’s press release, the ministry also supported its stance and saw no legal or administrative hindrance to release the sales tax refunds by the FBR.

In another meeting with FBR Chief Operations and Refunds Officer Mohammad Abu Bakar Siddique, the Paapam delegation was told that the board also observed no reason to stop the tractor industry’s refunds. He directed the delegation to contact the Large Taxpayer Unit (LTU) Lahore chief commissioner Qesar Iqbal and get the refunds without any delay to avert any crisis in the vending industry, which was facing a serious liquidity crunch.

But when the Paapam tried to contact LTU Lahore chief commissioner he did not even bother to spare time to meet the tractor vending industry’s representative despite repeated requests.

“The post-meetings behaviour of the LTU officials is contradictory to the considerate attitude of the higher-ups of the FBR and the ministry of industries and production,” Paapam office-bearers said in a joint statement.

They said only Millat Tractors Limited has a plan to produce 45,000 more tractors this year to enhance the country’s GDP. But it requires an uninterrupted supply chain of the parts by the vendors. Every hurdle creates problems not only for the tractor industry but also for its vendors, so both have the commitment to jointly deal with all crises, they added.

They said that the tractor vending industry was already operating only on marginal profitability and working hard to supply parts to the tractor industry aimed at increasing inputs. He said if outstanding sales tax refunds were not paid immediately to the tractors’ manufacturers they would be unable to continue payments to the vendors. Consequently, the tractor parts manufacturing vendors will have no option but to close their operations.

Published in Dawn, August 10th, 2021

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