KARACHI, July 8: The Federation of Pakistan Chambers of Commerce and Industry has demanded of the government to withdraw/rescind SRO 507(I)/2003 issued on June 7, and suspend the operation of section 73 of Sales Tax Act 1990.

The FPCCI said a meeting of the apex chamber held to finalize the anomalies had also approved the demand for rescinding/withdrawal of the said SRO.

FPCCI acting president Sheikh Maqbool Ahmed in a letter to Finance Minister Shaukat Aziz on July 7, said a number of industries operating under the concessionary regime of SROs had sent representations apprehending the shrinkage of sales owing to restriction of sales to non-registered persons, says a press release.

The concessionary imports are primarily objected to provide cushion between tariff rates of imports of raw materials and finished goods made out of these concessionary imported raw materials.

The FPCCI acting president said the present rate of duty on concessionary imports was between five to 10 per cent, while on the freely imported finished goods the rate was between 20 to 25 per cent.

Further not all the inputs are import based. The partly inputs are at higher rates due to locally manufactured classifications and partly inputs are also commercial market based availabilities, which are imported at the highest cap of 25 per cent.

The FPCCI acting chief said the margin between concessionary rates and import tariff rates of similar goods due to rising input costs of other heads had already moved the domestic industry to disadvantageous position to face the cost competition against import of similar goods.

He said sales tax registration was showing progress and with the passage of time increase in sales tax registration would automatically correct the situation. The current measures to direct the sales to only registered persons are shrinking the sales of goods.

About section 73 of the Sales Tax Act, he said the operation of section 73 should be suspended by the government till the decision by the anomaly committee.