GUJRAT: The Federal Board of Revenue (FBR) seems to have tightened its grip on the local fan manufacturing industry, as allegedly exorbitant tax notices have been issued to small and medium manufacturers of Gujrat.

The board’s regional commissioner office had held meetings with the representatives of Pakistan Electric Fan Manufacturers Association (Pefma) as well as owners of various fan units in the last two months in a bid to press them to join the sales tax filers list to enhance revenue collection from the region.

Sources said that most of the manufacturers, who were summoned to the FBR commissioner’s office for a meeting, were already filing sales and income taxes and had been asked to enhance their tax deposits by even 100 to 200 per cent.

The tax collection agency has now issued notices to at least two dozen manufacturers asking them to deposit sales tax of at least last five years, as they had to get themselves registered by that time, but failed to do so.

An FBR team conducted a raid on one of the top fan manufacturing units last week where it has been examining the record as well as stocks of fans and raw material.

A Pefma delegation had called on PML-Q President Chaudhry Shujaat Hussain in Lahore over a week ago and asked him to play his role in resolving the issue between the fan makers and FBR since the PML-Q is a major coalition partner of the ruling PTI in Punjab as well as the federal government.

However, a manufacturer who was part of the delegation said that the meeting with the PML-Q chief was yet to bear any fruit, and now the FBR had further tightened the noose around the fan makers by setting unprecedented targets of filing sale tax, which was nearly possible for them.

He added that usually their production season as well as demands in the international market ran from February to June every year, but currently the industry was facing a difficult situation due to the soaring prices of raw material and reduction in buying by the customers. Instead of assisting the small and medium scale industry of electricity fans during such volatile economic conditions, government institutions such as the FBR were further creating problems for them.

Another businessman from the fan industry claimed that such an environment of fear was never conducive to investment, so the government should increase the number of filers instead of pressing those who were already paying taxes to pay hefty taxes.

The Gujrat-based pottery and furniture industries as well as various traders were also facing tight scrutiny by the FBR as notices have been issued to these sectors as well.

The local trade and industry along with the medical fraternity had observed a strike and staged protest demonstrations against the FBR in February.

On the other hand, sources in the Gujrat FBR office said that the tax recovery notices to the fan manufacturers were not unjustified as the assessments had been made after gathering complete information about the sale and profit margins of the respective companies.

Published in Dawn, April 15th, 2019