Lucrative trade: Designers approach PRA in wake of fashion crackdown

Designer Zara Shahjahan says authority in talks with the PFDC

LAHORE:

While most owners of designer labels whose outlets had been sealed in the wake of Punjab Revenue Authority raids have approached the authority to resume operations despite flaying its “highhanded” conduct, some have moved the LHC to take action in this regard.

According to details, designers Zara Shahjahan, Rubaiyat, Gulachi, Sania Maskatiya, Ammar Belal, and Nida Azwer have paid the authority Rs8 million collectively as security while Asifa and Nabeel, Aphrodite and Mehdi have gotten their labels registered. Mehreem Gul, Jeuni Couture, Ali Xeeshan and Fahad Hussayn have also applied for registration. On the other hand, Ayesha Imran and Muse approached the LHC against the actions taken by the authority. Justice Mamoonul Rashid of the court has directed the authority to accord a personal hearing to the labels and decide their cases in accordance with law.

Shahjahan told The Express Tribune she had agreed to comply with the authority by depositing the security. She said her label was involved solely in selling a product that had been designed, manufactured and packaged by them. Shahjahan said the Pakistan Fashion Design Council (PFDC) had been holding talks with the PRA regarding the raids and collection of service tax.

Commenting on Shahjahan’s statement, the PRA spokesperson said that the PFDC was not holding any negotiations with the council. He said the authority would collect the tax from every designer. The official said rendering a service could imply use, disposition or consumption of any goods in either an essential or incidental aspect.

The spokesperson also said financial records of some noted designers had revealed that they had not been transferring the proceeds of general sales tax to the government. He said that Maria B had gotten registered with the PRA in the service category in 2014 and had consequently filed 17 returns. The official said she had claimed zero sales in the capacity of a designer and paid no service tax. The designer remained unavailable for comments despite repeated attempts.

He said such practices were widespread in the sector. The spokesperson said monies owed by the outlets would be determined after the PRA had perused their financial records and registered them. He said the authority expected to recover a sum of around Rs80 million in taxes from designers who had failed to abide by the law. He said the PRA had managed to more than double the amount of tax collected from the service sector in August 2015 to Rs423 million from Rs201 million in August 2014.

AC Ayesha Ranjha said a survey to ascertain the number of designers was underway. She said all of them were liable to pay service tax. Ranjha also rejected allegations of “highhanded” conduct. She said action was only taken against designers with whom the due process of communication required in accordance with the Punjab Sales Tax on Services Act 2012 had been completed over the course of one year. Elucidating on the process, she said first information notices were served to relevant businesses in the first stage. She said reminder notices were then issued to remind businesses of their obligations.

PRA AC Sumaira Ambreen said advance compulsory notices and final notices were issued after this. “Finally, a sealing notice is sent under Rule 6 of the Punjab Sales Tax on Services (Enforcement) Rules 2014 and Section 5 of the Punjab Sales Tax on Services Act 2012,” Ambreen said. She said a final opportunity to register had been given to every designer who had corresponded with the PRA over the course of last year.

Published in The Express Tribune, September 11^th, 2015.