KARACHI: The government is netting Rs100 on a 50-kilogram cement bag in terms of taxes and duties, including five per cent federal excise duty (FED) and 17pc general sales tax (GST).

Certain services are being taxed under independent provincial sales tax laws of Sindh, Khyber Pakhtunkhwa and Punjab. These services are also taxable under the Federal Excise Act 2005, which is tantamount to double taxation, cement manufacturers say.

All Pakistan Cement Manufacturers Association (APCMA) in its budget proposals has urged the Federal Board of Revenue (FBR) to gradually reduce FED to zero as announced by the previous government in order to boost cement off-take.

In a statement issued on Tuesday, APCMA Chairman Muhammad Ali Tabba said high taxation encouraged evasion and negatively impacted consumption. He recommended that FED on all services rendered in Sindh, KP or Punjab be abolished as it would eliminate double taxation and reduce cost of doing business.

On other issues, he said that before referring appeal to the Office of Commissioner (Appeals) or Appellate Tribunal, a taxpayer was required to deposit the impugned duty demanded or penalty imposed in the appealable order. “This mandatory compulsion is considered as a hindrance in the dispensation of justice,” he added.

Identical provisions, which had been repealed from income tax and sales tax laws, should also be removed from the excise law, he said.

Iranian cement of inferior quality was being sold at lower prices as compared to locally produced cement, he said, and urged the government to impose additional regulatory duty on imports of Iranian cement.

Moreover, recent increase in duty on import of coal from 1pc to 6pc had adversely hit the local manufacturers and had drastically increased cost of doing business, the APCMA chief said.

He called for zero per cent duty on coal imports as this would keep open the option of using coal as alternative source of energy. The government had enacted the Gas Infrastructural Development Act of 2011 (2011 Act), whereby the government charged a cess to all gas consumers except those of the domestic sector, he added.

Published in Dawn, March 16th, 2016