Lahore Chamber of Commerce and Industry has said that the DTRE (Duty Taxes Remission on Export) for packing material should not be allowed to the exporters/export houses and SRO 491 should be implemented on DTRE as well. LCCI President Sheikh Muhammad Arshad on Wednesday said that this would have far reaching consequences for the nascent packaging sector of the country. Most of the said packaging industries are supplying packing material to the exporters and are duly registered for sales tax, he said.
The denial of input tax/refund to exporters will encourage them to make purchases from un-registered persons so that only one percent tax is required to be withheld, instead of making purchases from said registered manufacturers/suppliers who will charge sales tax at 17 percent.
The business of registered manufacturers/suppliers of packaging material will, therefore, come to a standstill and they will be forced either to close down or to de-register themselves and go in the un-organised sector. The problem will be aggravated in view of the fact that most of the large exporters/export houses will obtain DTRE for import or local purchase of various items including packing material.
They will import packing material free of Customs duty and sales tax under the said scheme and there will be no need for them to make purchases either from registered suppliers or from un-registered suppliers. This will cause loss of local economic activity resulting in huge revenue loss to the national exchequer.
He said that the above facts point towards one thing that registered SMEs manufacturing/supplying packing material to exporters will not be able to continue their businesses. He urged the Federal Board of Revenue to resolve the issue in such a manner that registered SMEs are able to continue their business and to supply packing material to exporters/export houses. LCCI President said that businesses are coping with number of internal and external challenges and direly needed a helping hand from the government departments to play an instrumental role for economic uplift of the country.