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ST relief on small textile units

July 31, 2012


ISLAMABAD, July 30: National Assembly (NA) Standing Committee on Textile Industries here on Monday directed the Federal Board of Revenue (FBR) to exempt sales tax on the sizing, weaving and warping industry including power looms.

The Committee which met here with Haji Mohammad Akram Ansari in the chair also directed for the postponement notices of recovery already sent to sector till the issuance of new SRO in this regard.

The small units of textile industry should be given relaxation for their survival and large units of textile sector should be taxed properly, he remarked. The FBR representative, Abdul Sattar Aora told the committee that the government introduced a regime of zero rating and reduced rate of sales tax on inputs, intermediate and final products of five exports oriented sectors including Textile, Carpets, Leather, Sports and Surgical.

The sizing, weaving and warping industry including power looms are also required to charge sales tax at the rate of five per cent on account of services charged in lieu of services of warping, weaving and sizing rendered to their unregistered clients, he added. He further said, all this was done to eliminate any undue benefits to the unregistered operators in the sectors.

The committee also directed the Ministry of Textile Industry (MoTI) to release funds worth Rs11.2 billion to textile sector collected by Ministry of Finance (MoF) under Export Development Fund (EDF). Besides, the committee recommended that the Secretary MoTI should brief the committee on gas distribution for textile industry.

Member of committee, Abdul Rashid Godil said that the export was decreased by eight per cent not 26 per cent as quoted by exporters, saying there were so many reasons including shortage of gas and electricity. Moreover, the difference of rates of commodities by 50 per cent also caused a decline in the export and rate of commodities in international markets are fluctuating every time not fixed, he added.—APP