Erstwhile tribal areas: Steel and ghee/cooking industries told to justify tax exemption demand

ISLAMABAD: Minister of State for Finance Aisha Ghaus Pasha Thursday categorically conveyed to the steel and ghee/cooking industries in erstwhile tribal areas to justify their demand of tax exemptions, which would create distortions for taxpaying units in Pakistan.

Responding to the presentation of the Malakand Chamber of Commerce and Industry at the Senate Standing Committee on Finance held on Thursday, Aisha Ghaus Pasha stated that the demand of exemptions should be clearly justified and distortions should not be created due to the proposed sales tax and excise duty exemption to the steel and ghee/cooking oil units in the tribal areas. We do not want to create any distortion in the taxation system. If you justify these exemptions, the government would be ready to consider the same, she added.

Meeting of the Senate Standing Committee on Finance and Revenue was held at the Parliament House with Senator Saleem Mandviwalla in Chair. “As a committee we cannot grant exemption and we can only make recommendations”, Mandviwalla said.

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Chairman Committee, after due deliberations directed the officials of Malakand Chamber of Commerce and Industry to provide appropriate justifications for the demanded exemptions and further discuss the matter with the government. At the outset matter regarding the waving off the outstanding dues of the Federal Excise Duty/Sales Tax against the industrial undertakings of erstwhile FATA was discussed in detail. Officials of the Malakand Chamber of Commerce and Industry requested the committee to make following recommendations to the Federal Government;

(i); Federal government should table a bill proposing amendments in the Federal Excise Act, 2005 providing waiver of Federal Excise duty with retrospective effect to steel and ghee/cooking oil industries located in erstwhile FATA and PATA.

(ii); Federal government should direct FBR allowing refund of input tax credit or adjustment thereof against supplies made to tariff areas.

(iii); Federal government should make amendment in entry No. 152 to the Sixth Schedule to the Sales Tax Act, 1990 providing exemption to oil 86 ghee and steel industries from tax in the electricity bills.

Copyright Business Recorder, 2022