Continuity of zero-rated tax regime: Chairman Aptma to try to convince government at National Assembly body meeting today

Chairman All Pakistan Textile Mills Association (Aptma) Gohar Ejaz is all set to make another attempt to convince government to continue zero-rated tax regime for textile industry under Reformed General Sales Tax (RGST) at meeting of sub-committee of Standing Committee of the National Assembly on Finance, Revenue and Planning & Development here on Tuesday.
Aptma is not against the imposition of RGST for collection of revenue but it is suggesting a mechanism where intermediary process from cotton to finished fabric may be zero-rated. The finished fabric and garments export should be zero-rated and 15% RGST may be charged on local sale. This would ensure collection of Rs 25 billion tax on local sale and there would be need of collection by the FBR for refunds.
Earlier, Aptma had given a detailed presentation to the Standing Committee of the National Assembly with Fauzia Wahab in the chair. The convincing arguments put forward by the Aptma pushed the government to constitute a sub-committee of the same standing committee with Begum Shahnaz Wazir Ali in the chair to reconsider its point of view.
Other members of the sub-committee include Shahid Khaqan Abbasi, Faisal Saleh Hayat, Kashmala Tariq and Abdul Rashid Godil. It may also be noted that Chairman Aptma Gohar Ejaz had to visit Turkey but the urgency of matter propelled him to stay and attend today's meeting to pave the way for a prudent decisive moment in the National Assembly on continuity of the zero rated tax regime for textile industry under the RGST.
The chairman Aptma has appreciated the government for reconsidering Aptma's viewpoint on the issue and expressed the hope for continuity of zero-rated tax regime for the textile industry under the RGST.
Federal Finance Minister, Dr Abdul Hafeez Sheikh, Minister of State for Finance, Hina Rabbani Khar and Chairman Federal Board of Revenue (FBR), Sohail Ahmad are honest government officials and trying their level best to evolve a consensus on a reasonable outcome of the ongoing debate on zero rated regime between the government and the Aptma, he added.
He said the Aptma was fully supportive to the idea of documentation of economy through consumption tax. However, he clarified that the textile industry was already documented and contributing to the national exchequer. He said the Aptma was trying to convince the government that there was no need of withdrawing zero-rated tax regime from six stages of export-oriented textile industry, as it would lead to Rs 390 billion adjustment during a year in the whole textile process and Rs 127 billion of net refund after adjustment, causing serious liquidity crunch and threat to the viability of the largest export industry having earned $10 billion during last fiscal year and a potential to earn $15 billion during current year. The chairman Aptma said the government should impose consumption tax on domestic sale of finished textile products and keep zero rating intact for cotton, yarn and fabric.