Trade bodies have rejected the proposed 3 percent increase in the general sales tax (GST) by the Federal Board of Revenue (FBR), demanded zero rating of GST for the industries, and threatened to take to the streets if the plan was withdrawn.

Addressing a press conference held at the auditorium of Sialkot Chamber of Commerce and Industry (SCCI), the representatives of all the main trade bodies urged the government to announce zero rated GST in the coming fiscal budget for facilitating the business community.

SCCI President Fazal Jillani warned that the Sialkot exporters would take to the streets and lock up their factories if the FBR increased the existing GST rate from 2 percent to 5 percent.

The SCCI president said that Sialkot trade bodies were on one page over the crucial issue, adding that the proposed 3 percent increase in general sales tax would badly affect the industries which had already been suffering prolonged energy crisis and great financial crunch due to inordinate delay in the clearance of sales tax and duty drawback claims.

Addressing the press conference, Pakistan Gloves Manufacturers and Exporters Association (PGMEA) Chairman Muhammad Younas termed the proposed 3 percent increase “unjustified”, saying that the increase would kill the industries. He said that government should announce some trade and export related incentives for the exporters instead of pushing additional financial burden on them.

A representative of Surgical Instruments Manufacturers Association of Pakistan (SIMAP) urged the government to announce early withdrawal of 15 percent regulatory duty already imposed on the steal-made surgical instruments by the government. He said that shelving of the regulatory duty would help boost the surgical exports from Sialkot.

Expressing grave concern over the critical situation, Pakistan Leather Garments Manufacturers and Exporters Association (PLGMEA) Chairman Ehtesham Gillani said that the Ministry of Commerce and the minister of finance should be on one page for facilitating the business community, instead of running their horses towards the opposite directions.

On the occasion, Sialkot Dry Port Trust (SDPT) Chairman Khawar Anwar Khawaja termed it a very cruel act of government if the FBR made any increase in the GST. He alleged that country’s corrupt bureaucracy was creating hurdles in the way of promotion of national exports and bringing stability in national economy. Khawaja said the present circumstances now had become unbearable for the Sialkot exporters, adding that the Sialkot exporters would not be able to increase exports to US$ 6 billion from the existing US$ 1.8 billion annually during the next three years.

SCCI SVP Mir Alamgir Meyer added that the export sector is already burdened with high power and gas tariffs, which have made it very hard and difficult for the exporters to compete in the international markets. The increase in the sales tax would further enhance the grievances of SMEs.

He said that on the one hand, the government encouraged the industry to boost up the foreign exchange earnings, and on the other hand, it was planning unpleasant steps which not only would affect the efficiency but also let down the morale of business community.

The government should make business friendly policies, so that the business community can focus on the increase of exports which would ultimately result in the progress of the Country, he narrated…

The trade bodies’ representatives revealed that proposed levy of 5 percent sales tax on the exports of textile, surgical, carpet, sports and leather sector will have destructive effect on the export. It would add to the existing woes of the exporters and the export-oriented industries, they said. They added this 3 percent proposed increase would not be acceptable for the exporters as it will crush the exports. They said that the government should take business community on board on the issue.