The Lahore Chamber of Commerce and Industry has hailed the Cabinet committee decision to cut General Sales Tax on tractors to 5 percent from the 16 percent and said that it would not only facilitate the tractor manufacturers, vendors attached with the industry but would also give boost agriculture sector.
LCCI president Irfan Qaiser Sheikh, senior vice president Kashif Younis Mehr and vice president Saeeda Nazar in a statement on Tuesday said that with the reduction in the GST, the sale of tractors would get considerable boost and ease the problems being faced by the tractor manufacturers and the farming community as after the imposition of 16 per cent GST only 6,000 tractors could have been sold during the last six months.
They said that after this decision thousands of employees and their families attached with this sector would also get benefit. `The industry and vendors are now satisfied as the government has taken a step to clear a confusion which led to a decline in tractor sales and left some 20,000 people related to the industry jobless.' They said that availability of tractors at cheaper prices would also help increase the production of agriculture in the country.
On March 11, 2011 the government imposed 16 per cent GST hoping to net Rs 7 to 8 billion and raise another Rs 5 billion through corporate and withholding tax through sale of 70,000 units. However, the government's aim to get extended revenue did not materialise as most of the manufacturers suspended their operations, which resulted in sharp decline in sales. The makers of Fiat tractors (Al Ghazi) suspended its production in August for two months and resumed it in October 2011. However, on December 15, 2011, Al Ghazi again suspended the production. The makers of Massey Ferguson tractors partially resumed production from January 10 after suspending production on December 20, 2011.
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