All Pakistan Textile Mills Association (Aptma) has urged the Chairman, Federal Board of Revenue (FBR), to take notice of misleading reports against industry on alleged tax evasion. While taking strong exception to the misperception of Regional Tax Office (RTO), Karachi, regarding alleged tax evasion by the textile industry, the Aptma spokesman said both the Chairman FBR and Member Tax have already spelled their vision on the ambiguous tax.
According to the Aptma spokesman, the textile industry is running short of about three million cotton bales annually and thus import to consume accordingly. However, an ambiguity took place when the federal government exempted import of cotton from 1 percent withholding tax through an SRO No 567(I)/2008 in the last fiscal year.
The SRO was included in the Finance Bill 2008-09 and it was not enacted by the Parliament at that time. Interestingly, he said, this SRO could not be rescinded till date. The Aptma spokesman said that the Customs officials have been following the SRO No 567 in true letter and spirit to exempt the import of cotton from withholding tax recently when the Customs officials at Wagha border followed it against the SRO No 567 and imposed charging advance tax.
This precedent was subsequently followed by the Customs authorities at Karachi customs port and they also introduced this ambiguous tax not only on fresh import but also against the cotton already imported and consumed by the industry.
According to Aptma spokesman, the issue is already taken up with the Chairman FBR as well as Member Direct Taxes and both the competent authorities have agreed to adjust it against Income Tax refund or accumulated losses while realising the crisis like situation of the industry.
The Aptma spokesman said that the industry is making huge losses due to high cost of business, especially due to unprecedented load shedding and financial constraints. He said that the individual members could have obtained the exemption from the concerned authorities provided the Customs authorities had taken it up at the right time. But now when the industry is currently making huge losses and in most of the cases they have accumulated refunds against the department therefore this advance tax should be adjusted against refunds.