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  • Pakistan’s business confidence turns negative: survey

    Pakistan’s business confidence turns negative: survey

    KARACHI: Pakistan’s business confidence turned negative owing to highly challenging political and economic situation, according to a survey conducted by Overseas Investors Chamber of Commerce and Industry (OICCI).

    OICCI, is representative of foreign and multinational companies in Pakistan, announced the results of its comprehensive Business Confidence Index (BCI) Survey – Wave 22, conducted throughout the country during September to October 2022, which revealed that the overall Business Confidence Score (BCS) in Pakistan now stands at negative 4 percent showing a decrease by 21 percent from the previous positive 17 percent in Wave 21 Survey conducted in March to April 2022.

    READ MORE: Over 400 vegetable containers stuck up at ports due to dollar shortage

    The highest drop in confidence was recorded in the “services sector” (24 percent), followed by “Retail & Wholesale trade” (22 percent), and Manufacturing sector (20 percent). The survey sample consisted of 42 percent respondents from Manufacturing sector, 33 percent from the Services sector and 25 percent from the retail/ wholesale trade.

    Despite recording a significant drop in confidence of 20 percent, the Manufacturing sector recorded a net confidence level of positive 3 percent, whereas services and retail sector stood at negative of 8 percent and 14 percent respectively. 

    Commenting on the BCS, Ghias Khan, President OICCI, observed: “The substantial decline in the overall Business Confidence to negative 4 percent is regrettable but not surprising considering the highly challenging political and economic situation during the past six months. Besides very high inflation and increased fuel prices, the significant currency devaluation also dampened the economic activity. The record level of rains during August leading to severe flooding in Sindh and other parts of the country further restricted the business activities”.

    READ MORE: FPCCI demands release of soybean, canola cargoes

    OICCI BCI Survey, conducted periodically face to face, across the country in nine cities, covering 80 percent of the GDP, with higher weightage given to key business centres of Karachi, Lahore, Rawalpindi-Islamabad, and Faisalabad.

    The OICCI Survey feedback covers business environment at regional, national, sectorial, and own business entity levels in the past six months, as well as the anticipated business and investment environment in the next six months. 

    Overall, more than half (56 percent vs 19 percent in previous wave) survey respondents were negative on the business environment in the past six months and going forward only net 2 percent (vs 18 percent in the previous survey) were positive for the next six months.

    Commenting on the business situation for the next six months, the OICCI Vice President Amir Paracha observed, “these are challenging times, and the authorities are doing all they can to navigate the enormous challenges in front including managing inflation, restricted availability of foreign exchange and resource constraints.”

    READ MORE: KATI urges removal of regulatory duty on yarn

    Amir added: “Key stakeholders especially foreign investors will continue to support the authorities in taking long term policy measures to streamline the economic fundamentals including fair taxation for all and facilitate business and investment in the country.”

    The sentiments of the OICCI members, the leading foreign investors, who were randomly included in the survey, stands at positive 6 percent, substantially lower to positive 33 percent in the previous wave.

    Foreign investors have in the past also shown higher confidence than non-members. Commenting on OICCI members survey feedback, Ghias Khan, observed that “foreign investors feedback could have been more positive but for serious concerns on few critical issues like the undue delay in revising the pharma pricing and the extreme delays in overseas remittances for goods, services and dividends. Such actions are seriously counter productive for attracting FDI in the country.”

    The three major threats to business growth identified in the survey are Inflation (78 percent), High Taxation (71 percent), and currency devaluation (70 percent) which could potentially slow down business growth in Pakistan.

    READ MORE: Pakistan slaps 5pc regulatory duty on yarn import

    Looking ahead, only 18 percent (34 percent in Wave 21) expect expansion in business operations, 2 percent (21 percent in Wave 21) planning new capital investment and 7 percent respondents (positive 16 percent in Wave 21) expect increased employment in their respective businesses.

    The OICCI is the collective voice of major foreign investors in Pakistan. The over 200 OICCI members, from 31 different countries, have a presence in 14 sectors of the economy and contribute around one-third of Pakistan’s total tax revenue, besides facilitating transfer of technology and skills and providing employment to a sizeable number of people.

    About a third of OICCI member companies are listed on the Pakistan Stock Exchange and 40 members are associates of the Global Fortune 500 companies. Besides their business operations the OICCI members realize their corporate social responsibilities and are major contributors to various CSR activities benefitting 34 million persons from underprivileged communities.

  • Over 400 vegetable containers stuck up at ports due to dollar shortage

    Over 400 vegetable containers stuck up at ports due to dollar shortage

    KARACHI: Over 400 containers of vegetables have been stuck up at ports as commercial banks are not issuing documents due to shortage of dollars.

    All Pakistan Fruit and Vegetable Exporters, Importers and Merchants Association in a letter to the commerce ministry sent on Tuesday, stated that the containers of Onion are still held up at the various terminals of Karachi sea port since the commercial banks are not releasing the documents due to non-availability of foreign exchange as per statement of the banks.

    READ MORE: FPCCI demands release of soybean, canola cargoes

    The in-ordinance delay in timely clearance would lead to multiplication of cost of the containers (e.g. terminal charges and shipping charges) with each passing day. The high cost of onion containers would have a serious negative impact on common men making onion out of their reach due to high price and hence the government sincere initiative to provide relief to the common men would be jeopardized.

    READ MORE: KATI urges removal of regulatory duty on yarn

    The association said that as of today the wholesale rate of onion is Rs175 per kilogram and retail price is Rs250-270 per kg and with further delay in clearance, these rates are anticipated to further shoot up depriving the common men to buy the daily used vegetable onion.

    READ MORE: Pakistan slaps 5pc regulatory duty on yarn import

    The status of containers of various vegetables held up the various terminals of Karachi sea ports as of today is as follow:

    Onion: 250 containers approximately worth $2.1 million

    Ginger: 63 containers approximately worth $0.82 million

    Garlic: 104 containers approximately worth $2.53 million

    The association demanded the government to take prompt action in the best interest of the common people to provide relief to them and make sincere efforts of the government successful.

    READ MORE: Industries threaten mass protest against gas supply shutdown

  • FPCCI demands release of soybean, canola cargoes

    FPCCI demands release of soybean, canola cargoes

    KARACHI: Federation of Pakistan Chambers of Commerce and Industry (FPCCI) on Monday demanded the government to release the consignments of soybean and canola cargoes at the earliest.

    In different communications sent to the Prime Minister, the finance minister and the commerce minister, the apex trade body informed that soybean seed was a major raw material for the different industries in Pakistan.

    READ MORE: KATI urges removal of regulatory duty on yarn

    Initially it has been used for oil extracting industry for the production of oil purpose then its residual is used in the feed of animals because it is protein rich substance. In poultry industry it has been used as feed.

    If the supply of this raw material is stopped or delayed then the industries which are directly attached with the poultry industry like hatching industry and feed mills may also suffer and as a result of this millions of people will lose their jobs.

    READ MORE: Pakistan slaps 5pc regulatory duty on yarn import

    “It is also used in the feed of cows, goats and buffalos in this connection the Halal industry of Pakistan will also be hurt by this decision,” the FPCCI added.

    The soybean and canola cargoes are stuck up at port area Karachi due to restriction of PPRO organization which comes under the ministry of food security. The ministry has stopped the consignments on the arguments that the goods are GMO Seeds with the apprehension which may cause cancer to humans.

    “Whereas the industry has a point of view that it only happens when it is used in sowing purpose and in Pakistan it is only used in oil extracting and feed industry,” the FPCCI informed.

    READ MORE: Industries threaten mass protest against gas supply shutdown

    The cargoes are under heavy demurrage and detention since their arrival and adding cost to the miseries of stakeholders. It is pointed out that soybean meal is an ingredient which contributes 15-20 per cent of used in the industry.

    Soybean is termed as to contain the highest crude protein content to the extent of 44 per cent which contributes to reasonable yield in milk production.

    It is to record that soybean is being imported in the country since last many years and widely traded commodity. However, its clearance is at halt for the reasons best known to the hierarchy. “The situation is causing cancellation of market commitment and contracts escalating the cost of doing business,” it added.

    READ MORE: Member Customs assures swift clearance of export consignments

    On the other hand its substitute i.e. canola meal is also being treated on the same line and consignments are pending clearance at the port.

    The FPCCI of the view that if such practices are carried on and the consignments are stuck up at the port, the situation will result in shortage of poultry, meat and dairy items are the basic commodities which has a routine use in daily life,

    FPCCI is analyzing the situation seriously, and strongly recommended that immediate relief to the stakeholders may be granted before the situation gets out of control.

  • KATI urges removal of regulatory duty on yarn

    KATI urges removal of regulatory duty on yarn

    KARACHI: Korangi Association of Trade and Industry (KATI) has urged the government to withdraw the regulatory duty on yarn import because the levy would increase cost of product for textile industry.

    The Economic Coordination Committee (ECC) of the Cabinet on November 30, 2022 imposed five per cent regulatory duty on filament yarn.

    READ MORE: Merchants protest imposition of 5pc regulatory duty on polyester yarn

    In a statement on Monday KATI President Faraz-Ur-Rehman rejected the government’s imposition of regulatory duty on yarn and thread.

    Rehman said that yarn and thread are the raw material of the textile sector, and duty on it is not acceptable in any case. He said that KATI fully supports the stance of yarn traders as the imposition of duty will adversely affect textile exports.

    READ MORE: Pakistan slaps 5pc regulatory duty on yarn import

    President KATI said that due to the ongoing economic crisis in the country, shortage of gas and expensive electricity, the cost of production is already at the highest level and due to the financial crisis, most of the textile mills have closed down and are on the verge of closing down more.

    Faraz-Ur-Rehman said that the government should reconsider this decision, otherwise millions of people who are involved in the textile sector will become unemployed.

    READ MORE: PYMA urges government not to impose regulatory duty on yarn

    President KATI said that the textile sector is the backbone of the country’s exports, and most of the export earnings come from this sector. He said that the imposition of duty on this sector will cause the sector to suffer from a severe financial crisis which will directly harm the economy.

    Faraz-Ur-Rehman further said that the government and the concerned authorities are implementing duties to avoid their responsibilities without consulting the stakeholders, which is causing serious damage to the industry.

    READ MORE: Industries threaten mass protest against gas supply shutdown

    He said that the government should withdraw the regulatory duty immediately otherwise the employment of millions of people will be at risk.

    President KATI said that the survival of the export industry is not possible without ending the implementation of a 17 per cent general sales tax on textile exports.

    Therefore, to improve the liquidity position of exporters and competitiveness in the global market and to prevent fraud and smuggling, the restoration of ‘zero rating’ has become indispensable.

  • Merchants protest imposition of 5pc regulatory duty on polyester yarn

    Merchants protest imposition of 5pc regulatory duty on polyester yarn

    KARACHI: Yarn merchants have protested the levy of regulatory duty at 5 per cent on import of polyester filament yarn.

    Economic Coordination Committee (ECC) of the cabinet this week approved the imposition of regulatory duty at five per cent on import of polyester filament yarn.

    Pakistan Yarn Merchants Association (PYMA), while rejecting ECC decision to impose 5 per cent regulatory duty (RD) on polyester filament yarn, stated that it was primary raw material of textile industry. The association also termed that move as the cause of destruction of 800,000 power looms which were the lifeline of textile industry.

    READ MORE: Pakistan slaps 5pc regulatory duty on yarn import

    PYMA Senior Vice Chairman Sohail Nisar, Vice Chairman Javed Khanani, Former President FPCCI Nasir Hayat Magoon, Mohammad Usman, Saqib Goodluck, Khurshid Sheikh, Aslam Moten, Hanif Lakhany, Farhan Ashrafi, Danish Hanif, Saqib Naseem, Adnan Riaz, Khurram Bharara, Junaid Teli, Managing Committee and members strongly protested against ECC’s decision to impose RD on Yarn at Karachi Press Club, where they appealed to Prime Minister Shahbaz Sharif and Finance Minister Senator Ishaq Dar to suspend the ECC decision to save the SMEs sector of Pakistan from destruction.

    “The government to issue directives not to impose RD on Yarn in the best economic interests of the country. Otherwise, SMEs will be shut down and millions of workers will be unemployed,” they requested.

    READ MORE: PYMA urges government not to impose regulatory duty on yarn

    PYMA leaders pointed out that there is already 11 per cent custom duty on polyester filament yarn, so with 5 per cent RD, the duty will be 16 per cent while fabric is also subject to 16 per cent duty. As a result of the imposition of RD, power looms will be locked and millions of workers will be unemployed while the 2 million households will be in poverty.

    PYMA leaders questioned the government to benefit only two producers as to the wisdom of the decision to destroy Small & Medium Enterprises (SMEs), especially power looms which are associated with the textile industry. Although these two producers meet barely 25 per cent of the industry’s demand, they are not manufacturing other items.

    Yarn merchants warned that they will continue their protest against the ECC’s imposition of 5 per cent RD on yarn until the decision is withdrawn. PYMA along with power looms owners of Karachi, Hyderabad, Tando Adam, Lahore, Multan, Faisalabad and Pakistan Art Silk Factories of Gujranwala were also protesting.

    READ MORE: Industries threaten mass protest against gas supply shutdown

    “National Tariff Commission (NTC), saying that the NTC sent its recommendations without any consultation with the stakeholders which was unfair. NTC must listen to us and any decision must be taken in consultation with stakeholders”, they criticized.

    They mentioned to media persons that 11 per cent customs duty was imposed on the import of Polyester Filament Yarn, which will increase to 16 per cent after 5 per cent RD.

    Yarn was subject to income tax, sales tax, additional sales tax and even anti-dumping. If all taxes were combined, 50 to 55 per cent taxes were paid on import stage of Yarn, yet the imported raw material was cheaper than both local two producers. From which the monopolies and extreme profiteering of the two producers can be estimated.

    PYMA leaders pointed out, “Although local producers make only 25 per cent of the total demand of Polyester Filament Yarn, the textile industry has to depend on 75 per cent of imported Yarn. They further said that in the presence of ongoing inflation, high electricity and gas tariffs, labor issues, if more tax burden was imposed on industries, unemployment will increase and the government will have to pay many times more for 5 per cent RD.”

    READ MORE: Pakistan organizes first international housing expo next month

    PYMA leaders appealed to Prime Minister Shahbaz Sharif and Finance Minister Senator Ishaq Dar to maintain the current duty structure on Yarn and requested them to ask the ECC to avoid imposing regulatory duty on Yarn.

    “Instead of measures to destroy economic activities, such policies should be formulated which will promote business and industrial activities and create ample employment opportunities.”

  • Business community mourns demise of SM Muneer

    Business community mourns demise of SM Muneer

    KARACHI: Business community has mourned the demise of renowned business leader SM Muneer, who died yesterday on November 28, 2022.

    S.M. Muneer business leader of Pakistan who have walked through hard time and become an example to entire Pakistani entrepreneur. The start from the rise of his Din Group of Companies as one of the major business groups in the country is the story of almost 50 years of hard work and perseverance.

    The leadership of Businessmen Group (BMG) and Karachi Chamber of Commerce & Industry (KCCI), while expressing deep grief and sorrow on sad demise of Chairman Din Group & United Business Group (UBG) SM Muneer, stated that Late SM Muneer will always be remembered not only by the business community of Karachi but the entire Pakistan for his valuable services to the country.

    READ MORE: Member Customs assures swift clearance of export consignments

    In a joint statement, Chairman Businessmen Group Zubair Motiwala, Vice Chairmen BMG Tahir Khaliq, Haroon Farooki, Anjum Nisar, Jawed Bilwani, General Secretary BMG AQ Khalil, President KCCI Mohammed Tariq Yousuf, Senior Vice President Touseef Ahmed and Vice President Muhammad Haris Agar stated that Late SM Muneer was a good human being who generously contributed to dedicatedly serve the humanity as he was an active philanthropist. His sad demise has undoubtedly created a vacuum in business politics as he was a person who always raised a strong voice for the rights of business & industrial community.

    While extending heartfelt condolences to members of the bereaved family members, friends and well-wishers of Late SM Muneer, BMG & KCCI Leadership prayed that may Almighty Allah place the departed soul in Jannat ul Firdous and grant courage to all of them to bear this irreparable loss.

    READ MORE: FTO urges business community to lodge complaints for tax issues

    Chairman BMG Zubair Motiwala, who recently assumed charge of Trade Development Authority of Pakistan (TDAP) as its Chief Executive, said that SM Muneer visited TDAP office just two days ago to congratulate him on taking over his new assignment at TDAP. “Late SM Muneer, besides discussing matters of mutual interest, gave valuable advises for improving the exports”, he added and prayed that may Almighty Allah grant higher ranks to Late SM Muneer in Jannat ul Firdous.

    Faisal Moiz Khan, President North Karachi Association of Trade & Industry (NKATI), SVP Shabbir Ismail, VP Naeem Haider, Akhtar Ismail, Sadiq M, Imran Moiz and Younus Khamisani, have expressed their grief and sorrow over the sad demise of S.M. Munir Bhai Jan. They termed a big loss for the business community.

    In a statement, NKATI leaders were of the opinion that S.M. Munir’s outstanding services to the business community will always be remembered.

    READ MORE: Business community welcomes appointment of new Army chief

    They prayed that Almighty Allah may grant courage to the members of bereaved family to bear this irreparable loss with fortitude and the departed soul may rest in eternal peace.

    Former President and Patron in chief SITE Zubair Motiwala, Former President and Chief Coordinator Saleem Parekh, Former President Jawed Bilwani, President Riaz Uddin and office bearers of SITE Association of Industry, have, condoled the sudden demise of KATI Patron-in-Chief S.M. Muneer.

    The leaders said that the passing away of S.M. Muneer has created a vacuum in business politics. He was a good human being and his services were acknowledged by the President of Pakistan who conferred on him ‘Sitara-e-Isaar’ and ‘Sitara-e-Imtiaz’ in recognition of his outstanding public service for the cause of humanity.

    Zubair Motiwala said that a few days ago, (late) S. M. Muneer came to meet & greet him on his appointment as CEO, TDAP.

    READ MORE: APTMA demands restoring controversial SRO for sales tax refunds

    They have prayed to the almighty Allah to rest the departed soul in eternal peace, grant him place in ‘Jannatul Firdaus’ and give strength & fortitude to the bereaved family to bear this irreparable loss with equanimity.

    M. M. Zubair Motiwala, Patron-in-Chief All Pakistan Textile Processing Mills Association (APTPMA), has expressed heartfelt condolence on the sad demise of SM Muneer, leader of business community.

    May Allah the Almighty, rest the departed soul in eternal peace and grant strength, courage and fortitude to the breaved family of Mr. SM Muneer to bear this irreparable loss, Ameen!

    “WE ARE FROM ALLAH, TO WHOM WE RETURN”

    He said that SM Muneer will be long remembered as a man of conviction and commitment.  His demise would create vacuum in business community. May Allah rest his soul in peace!

    Pervaz Lala, Chairman APTPMA, Mr. M. Imran, Regional Chairman, Mr. Amjad Jalil, Sr. Vice Chairman, Mr. M. Iqbal Arbi, Saleem Parkeh, former Chairman APTPMA, M. Arif Lakhani, Sikander Imran, Anwer Aziz, all Members Executive Committee and other senior members of the Association have condoled the sad demise. May Allah rest his soul in peace.

  • Member Customs assures swift clearance of export consignments

    Member Customs assures swift clearance of export consignments

    KARACHI: Mukarram Jah Ansari, Member Customs (Operations), Federal Board of Revenue (FBR) has assured the business community of swift clearance of export consignments, according to a statement issued on Friday.

    Chairman South Circle of the Towel Manufacturers Association (TMA) of Pakistan, Syed Usman Ali along with senior members of this Export Oriented Association conducted a fruitful meeting online with the Member Custom (Operation) Mukarram Jah Ansari.

    READ MORE: FTO urges business community to lodge complaints for tax issues

    During the meeting TMA members emphasized the obstacle related to the port Qasim which they are facing to clear their goods to export in the international market. The prominent members of the Association highlighted that Only One Scanner is working at Port Qasim, due to this, shipments taking more time to complete scanning process, all available scanners should be streamline for working 24/7 for timely movement of exporter’s shipments.

    The Process of Export Receiving Information (ERI) is very slow, and needs to be swift. Night examination facilities of containers are not available; it should be available 24/7.

    READ MORE: Business community welcomes appointment of new Army chief

    Duty Drawback refunds are not being disbursed as per desired result, after the submission of case, System generated a message for the required documents while these documents were already submitted. Bankers are not updating data in PSW System according to its real time requirement, hence settlement of financial Statement does not reflect the amounts of Duty Drawback.

    Registration of SRO 957 is very cumbersome; it should be simplified for the exporters. Need nomination of focal Person from FBR to resolve day to day issues of the exporters.

    READ MORE: APTMA demands restoring controversial SRO for sales tax refunds

    Member Custom Mukarram Jah Ansari listened to all the issues patiently and replied that our full support for the growth of the export sector and said all are trying our best to enhance the export of this beloved country.

    He further added that we are putting our best efforts to remove all the bottlenecks which are facing the export sector. The member also thanked the members of this Export Oriented Association and shared their positive remarks that the exporters are the real heroes because they are playing a vital role for the generating of employment in the country as well as earning valuable foreign exchange for the national exchequer.

    READ MORE: PYMA urges government not to impose regulatory duty on yarn

    Mukarram Jah Ansari has also said that we have noted all your suggestions to rectify the problems and we will meet again after a few days to discuss the achievements of this meeting for desired result as well as whenever I will come to Karachi, we will conduct a meeting in the Association office.

    He was very excited & willing to improve the operation of shipment as well as he advised to the participants to conduct a meeting Muhammad Yaqoob Mako, Chief Collector Custom Enforcement, Custom House, Karachi as well as I shall inform him about the said meeting for swift implementation on your positive & productive suggestions for the betterment of export growth.

  • FTO urges business community to lodge complaints for tax issues

    FTO urges business community to lodge complaints for tax issues

    Karachi: Dr. Asif Mahmood Jah (Sitar-e-Imtiaz), the Federal Tax Ombudsman (FTO), has extended an invitation to the business community, urging them to lodge complaints without hesitation to address and resolve tax related problems effectively.

    (more…)
  • Business community welcomes appointment of new Army chief

    Business community welcomes appointment of new Army chief

    KARACHI: Business community has welcomed the appointed of General Syed Asim Munir as the new Army chief of the country.

    In a message on Thursday Korangi Association of Trade and Industry (KATI) Patron-in-Chief SM Muneer, President Faraz-ur-Rehman, CEO of KITE Limited Zubair Chhaya, Senior Vice President Nighat Awan, Vice President Muslim Mohammadi along with the Executive Committee members welcomed the appointment of General Syed Asim Muneer as Chief of Army Staff and Lt General Sahir Shamshad Mirza as Chairman of Joint Chiefs of Staff Committee by the Prime Minister Shehbaz Sharif.

    READ MORE: APTMA demands restoring controversial SRO for sales tax refunds

    SM Muneer acknowledges the services of the outgoing Army Chief General Qamar Javed Bajwa and said that he made Pakistan proud as the army chief.

    Paying tribute to Qamar Javed Bajwa, SM Muneer said that the credit goes to him for the historic achievements of removing the country from the gray list of FATF, and hunting down India’s fighter jet invading Pakistan territory.

    READ MORE: PYMA urges government not to impose regulatory duty on yarn

    SM Muneer said that Syed Asim Munir is the best choice for Army Chief and has an excellent professional career.

    President KATI Faraz-ur-Rehman said that the newly elected Army Chief General Asim Muneer was top in seniority among the four-star generals, he headed important departments like Corps Commander Gujranwala, ISI and Military Intelligence and showed high service.

    READ MORE: Industries threaten mass protest against gas supply shutdown

    President KATI said that the new army chief is a credible figure in the Pakistan Army and the nation has hopes high for him. Faraz-ur-Rehman further said that General Asim Muneer will be the first Army Chief to be awarded the sword for superior performance during training, while he set a new example by memorizing the Holy Quran at the age of 38 as a colonel.

    Rehman further said that after the best decision by the Prime Minister of Pakistan, there is hope that the political crisis will end in Pakistan and the country will move towards economic stability.

    READ MORE: Pakistan organizes first international housing expo next month

    Zubair Chhaya, CEO of KITE Limited welcomed the appointment of General Syed Asim Muneer as Chief of Army Staff and Lt. Gen. Sahir Shamshad Mirza as the Chairman of Joint Chiefs of Army Staff and said that Lt. Gen. Sahir Shamshad Mirza has been related to Sindh. Mirza fought and eliminated the terrorists in North Waziristan. Lt. Gen. Sahir Shamshad Mirza also played an important role in intra-Afghan negotiations.

  • APTMA demands restoring controversial SRO for sales tax refunds

    APTMA demands restoring controversial SRO for sales tax refunds

    KARACHI: All Pakistan Textile Mills (APTMA) has demanded the tax authorities to restore a very controversial SRO for settlement the issue of sales tax refunds.

    The textile millers demanded the FBR to restore SRO 1125(I)/2011 i.e. zero rating for the textile value chain to enable the industry to survive and maintain export momentum.

    Gohar Ejaz, Patron In Chief, APTMA, in a letter to Prime Minister Shehbaz Sharif, apprised about an important matter, which resulted in a massive loss of exports as well as significant increase in unemployment.

    READ MORE: APTMA urges PM to save textile industry from total closure

    “Approximately 60 per cent of the industry has closed or is on the verge of closure primarily due to an extreme liquidity crunch.”

    He said that the association had held a series of meetings with the ministry of finance and the ministry of commerce and the FBR starting June 2022 wherein the restoration of SRO 1125 (zero rating) was discussed.

    “We request the government to restore 1125 i.e. zero rating for the textile value chain to enable the industry to survive and maintain export momentum in these extremely difficult circumstances,” he added.

    READ MORE: APTMA demands immediate release of textile machinery

    Sources in the Federal Board of Revenue (FBR) said that the SRO 1125 was rescinded after reports of mega fraud cases by misusing the notification by various quarters.

    The Federal Tax Ombudsman (FTO) in a suo moto case in May 2019 directed Federal Board of Revenue (FBR) to conduct audit of all manufacturers who availed the benefit of SRO 1125(I)/2011.

    The FTO observed that the review of sales tax registration rules and risk score weightage assigned to the risk parameters employed in the registration process which lead to misuse of ‘manufacturer’ status by registered persons for the purpose of tax evasion.

    READ MORE: APTMA suggests measures to avoid Pakistan’s economic collapse

    The FTO further observed that the FBR vide SRO 494 (I)/2015 dated June 30, 2015 showed that the IRIS based Sales Tax Registration module failed to timely incorporate the provisions of revised registration rules.

    “The requisite changes in IRIS were incorporated after nine months vide SRO 227(I)/2016 dated March 21, 2016.”

    The FTO observed that the FBR had failed to take timely action in integrating the registration modules in IRIS system thereby providing opportunity to the unscrupulous elements to take advantage of the weaknesses in the registration procedure of the sales tax department.

    “Moreover, modification in the registration module was carried out after nine months of the revision of sales tax registration rules, but evidently no exercise was carried out by the field formation to verify that the existing manufacturers were registered in conformity with the provisions of revised rules.”

    READ MORE: Govt. halts gas supply to export industry: APTMA

    The FBR through Circular No. 01 of 2019 dated July 26, 2019 explained that SRO 1125(I)/2011 dated 31.12.2011, relating to zero-rating of five export-oriented sectors, has been rescinded since July 01, 2019 vide rescinding SRO 694(I)/2019 dated 29.06.2019.

    From July 01, 2019, the items listed in the said SRO shall be charged to sales tax at 17 per cent at import and local supply. Only in case of integrated retail outlets, sales tax on finished textile and leather item shall be charged at 14 per cent.

    All STGOs granting zero-rating on supply of electricity, gas, diesel, furnace oil and coal have been rescinded vide STGO 100/2019 dated 29.06.2019. In order to resolve the issue of increased sales tax refunds of exporters due to withdrawal of zero-rating on inputs, the scope of Expeditious Refund System is proposed to be extended with automated payment on generated RPOs.