Ginners are the only link between cotton growers and textile industry but due to severe crisis for the last two years and heavy burden of taxes, ginners are unable to run their factories in the upcoming season. The PCGA in its recommendations urged the government for bringing the withholding tax at the rate of 0.2 percent, saying the industry is giving 1 percent withholding tax on sale value of cotton lint while rest of the agriculture industries (rice & flour mills) are paying only 0.2 percent withholding tax, which is 5 times more as compared to oilier agri industries. The tax on cotton ginners industry should either be brought equal to other agri industries (rice & flour mills) or 0.3 percent tax on cash withdrawals from banks should be withdrawn immediately, which is a refundable tax and help the industry from paying it and then claiming it back.
The industry also requested for withdrawal of cotton standardisation fee (CSF) @ Rs 5/per bale and exemption of sales tax on electricity bills of ginning industry. On electricity bills ginners are being charged sales tax while all the textile chain is exempted from sales tax, the PCGA stated adding that the textile industry is not giving any sales tax on electricity. "We are core part of textile sector so exemption from sales tax should also be given to our industry, acknowledging us a part of textile sector."
The government has also been requested for removal of sales tax on cotton seed as there is no sales tax on sunflower or other seeds. Likewise, the industry has demanded settlement of refunds of ginning industry which have been pending since 2011. The immediate settlement of refund will definitely help overcome financial problem, it said. The meeting of the finance committee was also submitted other recommendations as well.
Copyright Business Recorder, 2017