Senate Standing Committee on Textile Industry has recommended to the Federal Board of Revenue (FBR) to introduce "no payment no refund" system for exporters and immediately withdraw increase in import duty on coal from 1 percent to 5 percent, as this would nullify the government's positive initiative to use coal as an alternative fuel. It is learnt that the FBR has received recommendations of the committee pertaining to changes in the tax regime for the textile sector.
The committee recommended that textile sector which is currently ranked 4th in the priority for provisions of gas must be supplied natural gas. The comparative study on regional electricity rates in competing exporting countries were also discussed and the committee recommended that NEPRA should ensure uninterrupted energy supply to the textile industry and tariff of power should be at par with the rates of electricity tariff and surcharges of competing countries in the region.
The comparative study of the regional gas rates of the competing exporting countries were shown in the presentation and Pakistan's side rates were on a very higher side, the committee recommended that proposed increase in gas tariff for the industry be withdrawn and supply of gas to the sector be made on the rates, which are at par with the competing countries in the region.
The committee also recommended that increase in import duty on coal from 1 percent to 5 percent be immediately withdrawn as this would nullify the government's positive initiative to use coal as an alternative fuel. The committee recommended zero rating sales tax facility "no payment no refund" system for exports to declare textile sector zero rated.
The committee also recommended that sales tax be collected at retail stage only that will ensure revenue on the goods that arrived in the country as well as entire local consumption. The committee recommended that immediate refunds of all outstanding claims of sales tax, DLTL and customs rebate etc be cleared by the government at the earliest. Although it is being stated that refund claims are being processed yet the committee recommended that wherever the claim/refunds are processed and eligibility is established, the payments be made not later than 90 days.
The committee also recommended that the government should ensure protection of interests of all stakeholders from farmers to spinners while purchasing cotton directly from the farmers as there looms apprehensions of farmers being exploited by the monopolists and this will further aggravate the situation, it added.
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