ISLAMABAD: The government has decided to implement a track and trace system at ginning factories to fully document the cotton trade and ascertain actual production/sales of the commodity.

The decision was taken during the meeting of Malik Amjad Zubair Tiwana, chairman of the Federal Board of Revenue (FBR), with Dr Gohar Ejaz, the Caretaker Federal Minister for Commerce, Industries, and Production at the Ministry of Commerce.

During the meeting, it was decided that the FBR, in collaboration with federal ministries and provincial departments, will introduce a track and trace system at ginning factories in Pakistan to promote transparent cotton trade and ascertain actual production of the cotton.

Weekly Cotton Review: Spot rate up as cotton prices continue to rise

The FBR has decided to implement the track and trace system on the ginning units for electronic monitoring of production and supplies of cotton. This initiative aims to assist the textiles and apparel industry in meeting the traceability standards set by various trading blocs, nations, brands, and retailers.

In this regard, the Commerce Ministry and the FBR would collaborate to introduce track and trace System for a transparent cotton trade.

When contacted, sources told Business Recorder that at present, licensing rules of the FBR contain only names of seven sectors for the purpose of the implementation of the track and trace.

The notified sectors are: Tobacco, fertiliser, cement, petroleum products, steel, sugar, and beverages. Legally, track and trace system can only be implemented in the notified sectors under the sales tax rules.

The ginning sector has not been notified yet. Therefore, the FBR is legally bound to first notify the ginning sector in the list of industries which would be subjected to the track and trace system. This requires amendment in the Sales Tax Rules, 2006. So far, the track and trace is under implementation at the cement factories. The system has not been implemented at steel, beverages, and petroleum sectors.

Sources further told this scribe that the FBR has to include the ginning sector in the list of sectors subjected to electronic monitoring through the track and trace system. After the inclusion of the cotton sector into the list of electronic monitoring, the said sector would now be required to install a track and trace system at their manufacturing premises, the sources said.

Under the revised rules, the procedure shall apply to electronic monitoring, tracking and tracing of production, import and supply chain of the steel sector; tobacco products; beverages, sugar and fertilizer, cement, and petroleum products, the officials added.

Copyright Business Recorder, 2023