FBR contests Aptma claim

Federal Board of Revenue Chairman Sohail Ahmed Thursday contested the claim of All Pakistan Textile Mills Association (Aptma) that planned RGST on six stages - from purchase of raw material to export of goods - would block textile refunds worth Rs 500 billion and compound the already tight liquidity position of the sector. The FBR Chairman contended that Aptma's presentation on refund figure is exaggerated and the actual amount is likely to be much lower in the new tax regime.
"I do not agree with the figures submitted by the Aptma. The actual refund of the Aptma could be around Rs 127 billion as nearly Rs 219 billion would be adjusted within the textile chain." The National Assembly Standing Committee on Finance after hearing the arguments of both sides constituted a committee of parliamentarians, members of the Federal Board of Revenue and representatives of All Pakistan Textile Mills Association (Aptma) to work out the actual refund figure and possible solution to the problem.
Aptma Chairman Gohar Ejaz contention was that RGST basically is a consumption based tax and as there is no consumption involved at the six stages of textile manufacturing, the collection of tax on every stage merely for refund was meaningless and would compound the liquidity problem for the major exporting industry. He wanted the government to consider multiple stages as one step and collect tax on final stage.
Committee members Shahid Khaqan Abbasi, Bushra Gohar and others said that problem seems to be with the FBR and it is transferring it to someone else. "The trust deficit and corruption has been coming out very clearly," said Bushra Gohar of Awami National Party and Pakistan Muslim League (N) Shahid Khaqan Abbasi stated that FBR is not sensitive to the real issue of liquidity and cash flow that sector might face in collection of tax on each stage. If you suck out money from the sector that is not taxable this means you are simply making it uncompetitive in the global market, he remarked. "Please don't expose us to the tax that would not increase any revenue and bring relief to the common man," said representative of the Aptma and requested the committee to let the textile sector continue with the zero rating because it is a major foreign exchange earner.
In his presentation, Haji Maqsood Butt of Textile Processing Mills Association argued that RGST would not help document the economy and showed serious concerns on sections of the bill particularly pertaining to arrest of taxpayer on suspicion of tax fraud and probing about assets by sales tax inspectors.
Mian Shaukat Masood, Former President Islamabad Chamber of Commerce also highlighted tedious process of sale tax refund and stated that documentation requirement in RGST would increase the cost of doing business and would lead to blockade of refund of export-oriented industries that would hurt country's exports.
Representatives of the Writing Instruments Manufacturers Group of Pakistan Naeem Akbar Yousuf and Riaz-uddin informed the committee that education being the fundamental right of each Pakistan would have negative repercussion due to the imposition of RGST on stationary. They demanded the government to continue zero rating of all educational essentials as well as books and stationary because this would hardly give Rs 500 million revenue.