The Statutory Regulatory Order (SRO) to give legal effect to the government decision to cut General Sales Tax (GST) on tractors from 16 percent to 5 percent is being issued today (Thursday), Chairman Pakistan Association of Automotive Parts & Accessories Manufacturers (Paapam), Nabeel Hashmi told Business Recorder.
He said though the government had approved GST reduction to help tractor manufacturers, hundreds of vending units and the cash-starved farming community, the FBR has yet to issue notification to his effect, which caused confusion among the stakeholders. Nabeel said due to hectic efforts of the Paapam members, the SRO is likely to be issued on Thursday (today) as all legal and other procedural formalities have been completed. Tractor manufacturers, vendors and growers had been anxiously waiting for the SRO so that they could reinvigorate the production/sales of tractors at affordable prices after a lapse of one year when GST was imposed on the zero-rated tractor industry in March 2011.
He said the industry and vendors are now satisfied as the government has taken a step to clear a confusion which led to a decline in tractor sales and left some 20,000 people related to the industry jobless.
Reduction in GST has made tractors cheaper by Rs60,000 to 100,000 per unit.
A senior executive of Millat Tractors Ltd said though the production and booking of tractors had picked up after the government announcement to reduce GST, yet farmers/buyers were reluctant to pick up their deliveries till the issuance of SRO. Industry executives said tractor sales had slumped to 6,000 in the past six months due to increase in prices after imposition of 16 percent GST.