Local cotton: Pakistan govt working to abolish 18% GST, says minister

ISLAMABAD: Minister for National Food Security Rana Tanveer Hussain said on Wednesday that the government is actively working to abolish the 18 per cent general sales tax (GST) on locally-produced cotton, including lint and cottonseed, to support farmers and boost domestic cotton production.

The minister made these remarks during a meeting with a delegation from the Pakistan Business Forum (PBF), led by Chief Organiser Chaudhry Ahmad Jawad.

Hussain said the government is also addressing pending cotton cess liabilities in the textile sector to ensure the Central Cotton Committee (CCC) remains financially stable. “We are considering limiting tax-free imports of yarn and fabric under the Export Facilitation Scheme (EFS) to encourage local cotton consumption,” he added.

PBF urges govt to take urgent measures to save cotton

He stated that the government aims to produce 10 million cotton bales this year and is committed to offering relief to farmers in the next budget.

The meeting discussed in detail the upcoming federal budget and advocate for targeted relief for the agricultural sector.

The PBF delegation included Senior Vice President Amna Awan, Chairman South Punjab Talat Suhail, Chairman KP Ashfaq Paracha, and Deputy Secretary General Zafar Iqbal.

PBF Chief Organiser Chaudhry Ahmad Jawad urged the government to eliminate the GST on local cotton and lower customs duties on imported machinery for the cotton ginning sector. “Sustainable economic growth is not possible without strong support for agriculture,” he emphasised.

Jawad also called for the implementation of new seed varieties developed by the Pakistan Agricultural Research Council (PARC) at the district level. “Farmers are unaware of the latest research being carried out in Islamabad. It needs to be transferred to the grassroots through local agriculture departments,” he said.

The government must take concrete steps to reduce the cost of cultivation. Fertiliser prices should also be brought down by offering tax relief, added Jawad.

Copyright Business Recorder, 2025