Recommendation: Industry wants exclusion from Sales Tax Act

Cement sector presents proposal, says it will benefit everyone.

LAHORE:

The cement industry has urged the Federal Board of Revenue (FBR) to exclude the sector from the Third Schedule Sales Tax Act, which has increased costs and is burdening consumers as well.

“The government can provide much-needed respite to both the industry and consumers by considering recommendations that were promulgated by the industry in its budget proposals for the year 2013 to 2014,” said officials at the All Pakistan Cement Manufacturing Association (APCMA).

They added that the step would also resolve the dilemma that the industry is currently facing — whether to overcharge consumers located near cement plants or incur losses by supplying it to far-flung areas at a higher cost. The initiative will also prove beneficial in reducing cement prices, hence increasing consumption and, subsequently, government revenues.

It is in national interest to revert to the old practice of selling cement through the wholesale mechanism and collect sales tax on the ex-factory price as the dynamics of every province and region is different in Pakistan, they added.

They further elaborated that the collection of sales tax on the basis of single Maximum Retail Price (MRP) across the country is anomalous and will ultimately force the manufacturers to restrict sales to nearby markets, further reducing the FBR’s revenue collection.

Published in The Express Tribune, May 18^th, 2014.

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