FPCCI demands review of GST on Machinery Imports

ISLAMABAD: The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has demanded the government to review its decision of imposing 17 percent General Sales Tax (GST) on machinery imports.

"Manufacturing and SME sector should be encouraged to play their due role in national development with peace of mind," Chairman Coordination, FPCCI, Raza Khan said while speaking to business community at FPCCI Capital Office here.

He was of the view that the combination of inflation, rising debt, high interest rates, energy shortfall, law and order situation and slow economic growth were creating problems for doing business which should not be ignored.

17 per cent GST on imports of machinery, equipment has put brakes on expansion and modernization plans of many industrial concerns while scores have shelved idea to set up new factories, Khan claimed.

"Some businessmen have started shifting their units to regional countries offering incentives and enabling policies," he added.

He said that cost of doing business is increasing during these times of sluggish growth which is not in the national interest.

He said that the cumulative effect of imposition of 17 pc GST on machinery imports has raised final cost by around 22-30 per cent.

Moves that result in reduced industrial capacity, lower share of manufacturing in total national output, and shift to the services sector will never help country achieve a sufficient surplus of exports over imports to maintain external balance, he added.

Copyright APP (Associated Press of Pakistan), 2011