Levy of 16 percent GST: Brick kiln owners go on indefinite strike

Over 20,000 brick kiln owners have gone on an indefinite strike across the country against the levy of 16 percent General Sales Tax (GST) on bricks in the FY 2011-12 budget bringing the multi-billion housing industry to a grinding standstill, President of Brick Kiln Owners Association Shaoib Khan Niazi told Business Recorder, here on Thursday.
Niazi further said that Brick Kiln Owners Association had given a notice to the government last month to withdraw 16 percent GST otherwise they would stop preparing/baking the bricks with effect from 1st August. "Documentation and determination of sale of bricks is not possible for the brick kiln owners since it is a labour intensive and risky business dependent on weather conditions", he added.
He said that more than 3.5 million labourers are working in the brick kiln industry, which is providing billions of high quality kiln backed bricks at reasonable rates for constructing hundreds of thousands of multi-storey buildings, flats, houses, bridges, roads, etc every year.
"The imposition of 16 percent GST will open floodgates of corruption in the FBR and the government will not get enough revenue from this new taxation on the kiln industry, it would only spiral the construction cost, he added. He said that due to the unwise step of the government more than ten million patheras, bharaiwalas, jalaiwalas, nakasiwala (kiln workers), loaders, truck/trolley drivers, masons, machine operators, quarry and sand suppliers, construction workers, welders, etc have lost their wages in the Ramazan as there are no bricks available at the kilns, which is the basic material for construction of houses.
Niazi threatened that if the government did not withdraw the sales tax, the kiln owners and workers would launch a march towards Islamabad and stage a sit-in (Dharna) in front of the Parliament House. When told that the kiln owners have already increased price of bricks by Rs 3000 to 3,5000 per thousand bricks without any economic cause in three months, Niazi said it is due to the government's purported intervention in the brick kiln industry. If the government stopped its intervention, the competition among the kiln owners will automatically bring down the prices, he added.
Housing and construction sector is among the identified sectors by the Government of Pakistan as the driver of economical growth. A spurt in activity in this sector unleashes a chain reaction in other allied industries. It is also said that no less than 60 industries are linked to construction and housing sector. Construction industry experts say that there is an annual shortfall of 270,000 housing units at present while the backlog of around 7.0 million units is in addition. However, Bhatta Mazdoor union (Kiln workers union) leader told this scribe that brick kiln owners normally stop brick making during the monsoon season as the rains damage the unbaked bricks lying in the open.
They said that the kiln owners have raised prices of the bricks by more than Rs 3000 per 1000 bricks creating an artificial shortage of bricks. They are selling bricks at the rate of Rs 7,500 per thousand instead of Rs 4,500 per thousand.
They said that the kiln owners are opposing the imposition of 16 percent GST because they do not want to document their economy and register their kilns with the FBR otherwise they would have to give rights to the kiln workers under the relevant labour laws. They alleged that the kiln owners are very influential people and well connected with the powerful politicians and government officials therefore they treat their workers as bonded labour.