LAHORE: All Pakistan Textile Mills Association (APTMA) has urged the government to immediately remove four percent customs duty and five percent sales tax on the import of cotton in order to enable the spinning industry function properly.

“The destruction of local industry is not in the interest of growers as well as the downstream sector, and such temporary benefits will result in long-term losses,” APTMA chairman said in a statement issued on Wednesday.

He said the export of cotton yarn had come down by almost 32 percent in the first 11 months of 2105-16 as compared to the corresponding period of the last year. The chairman also expressed surprise and disappointment over the statement of the FBR chairman in which he had hinted that further tax could be levied on the unregistered sector. He said the zero-rating facility had also been given in the past and was nothing new.

“The reason for seeking this facility is that billions of rupees (refunds) of the exporters are still held up by the FBR and the industry is not able to compete because of severe liquidity crisis. It is the responsibility of the FBR to ensure that refunds of exporters are released in time, but since this is not being done the industry has no choice but to demand zero-rating,” he said

The APTMA chairman also said that during discussions with the government in the presence of all textile sector associations, representing the entire chain and attended by Finance Minister Ishaq Dar and Special Assistant to the Prime Minister on Revenue Haroon Akhtar, zero-rating had been agreed upon for both registered and unregistered sales, and that all industrial raw materials, both imported and local, would be exempted from the sales tax.

“It seems this agreement is now being overlooked to prevent zero-rating facility from becoming successful,” he apprehended. He urged the finance minister to ensure that the spirit, in which this facility had been offered, should remain intact to ensure its success.

He said that more than 80 percent of yarn was imported under DTRE scheme, and, therefore, the duty was not a problem for genuine exporters belonging to the value-added sector. He urged the government to provide an enabling environment to the local industry so that it could be able to compete with its regional competitors and work for the enhancement of exports.

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