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LAHORE: The Pakistan Association of Automotive Parts and Accessories Manufacturers (Paapam) has requested the Federal Board of Revenue (FBR) to clear about Rs5 billion sales tax refunds of tractor industry immediately, as non-disbursement of refunds might cause delay in payment to the vending industry.

In a joint statement, Paapam chairman Abdul Rehman Aizaz, senior vice chairman Abdur Razzaq Gauhar and vice chairman Irfan Qureshi observed that tractor industry is facing severe liquidity crunch, as Millat Tractor’s overdue sales tax refunds of about Rs3.5 billion while Rs1.4 billion of Al Ghazi are pending for the last one and a half year. As a result, there is a strong possibility that they may not be able to continue to make regular payments to around 250 vendors engaged in making parts and accessories for the local tractor industry.

Abdul Rehman Aizaz pointed out that tractor manufacturers and their vending industry are interconnected and if refund payments are stopped to the tractor makers the vendors will also face cash flow blockage.

He said that the tractor vending industry is operating only on marginal profitability and working hard to supply parts to the tractor industry aimed at increasing agricultural production.

“If the overdue payment is not made immediately to the tractor manufacturers they will be unable to continue payments to the vendors, resulting in closure of their operation as they have limited resources and limited working capital lines from the banks,” he said.

Copyright Business Recorder, 2021

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