The Council of All Pakistan Textile Associations (Capta) has urged the government to reduce the rate of sales tax to zero for the value-added textile sector to compete in global market as it is facing a number of problems during a meeting at PHMA House last week.
Capta has expressed concern over Afghan transit trade which remains to be the biggest hurdle along with under invoicing, third port imports of Indian fabric and smuggling from India into Pakistan.
Chairman Capta, Zubair Motiwala, has also expressed concerns that the stuck up sales tax refund claims and customs rebate claims of the exporters have caused increase in the production cost, besides creating financial crisis for the industry.
The government's efforts to get GSP plus regime for duty free access to the EU markets might go in vain if the manufacturers and exporters were not relieved of sales tax.
He also added that the business community is cognizant of the fact that there are serious infrastructure, under-utilization of installed capacities problems coupled with serious law and order situation defying them.
To make huge export to the EU market, the government need to reverse the sales tax imposed on the value-added textile sector with a view to increase the finances for production.
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