Non-compliant textile spinning units: FBR to take enforcement measures

ISLAMABAD: The Federal Board of Revenue (FBR) has decided to take extreme enforcement measures, including import embargo/sealings of businesses/penalty/suspension, blacklisting, against non-compliant textile spinning units, which will refuse to install video analytics (digital eye) systems at their units.

Sources told Business Recorder that the FBR has decided to go with full force for implementation of video monitoring systems or video analytics at spinning units. All field formations of the FBR have been directed to take extreme enforcement measures against the non-compliant spinning units. The non-cooperation of spinning units will result in implementation of these enforcement measures.

Out of total 421 registered spinning units, around 300 are functional where digital eye systems will be fully installed for monitoring the movement of undocumented cotton bales.

READ MORE: APTMA urges FBR to withdraw video analytics at spinning stage

The non-compliant units, which show resistance will face embargo on imports, penalties, sealing of business premises, suspension of sales tax registration, blacking-listing and non-clearances from the production premises.

According to the details, the FBR had decided to electronically monitor production of registered units engaged in textile spinning through video analytics from November 1, but the said deadline has expired. However, the FBR has extended the said time period by December 31, 2025. The second deadline was also expired.

The total consumption of cotton bales of textile units is around 13million and 5-6million bales are produced locally whereas the remaining are imported. Around 9million bales are in the tax net whereas the remaining are locally consumed without payment of sales tax. These are termed “Gol Maal” in local parlance. FBR intends to capture this non reporting of Gol Maal.

The FBR sees the spinning stage as the key choke point within the supply chain for checking the movement of undocumented cotton bales.

Officials said that the All Pakistan Textile Mills Association (Aptma) resisted the implementation of the video analytics systems at the spinning stage.

The FBR had given assurance of tax credit facility to the textile spinning units against expenses incurred on installation of video analytics system.

In this regard, a joint committee of the FBR and Aptma was formed to monitor implementation of video monitoring systems in spinning units.

However, the units went to Lahore High Court, but the court did not grant stay against the installation of the said system at the spinning units. Now, the FBR will implement the system at any cost at the spinning stage with possible enforcement measures against units, which will refuse to install “digital eye” at their business premises, they added.

Copyright Business Recorder, 2026