LAHORE: The Pakistan Steel Line Pipe Industry Association (PSPA) has lamented that the FBR is insisting on charging sales tax on export of pipe to Afghanistan and the South Asian region despite a clarification issued by the Ministry of Commerce (MoC) in December last.
In a press statement issued, PSPA Chairman Muhammad Hashim said that the issue was also taken up with Federal Minister of Commerce Khurram Dastgir in a recent meeting, who agreed that the FBR should deal with this issue in the light of the MoC clarification, dated December 7, 2005, by exempting the export of pipe from sales tax.
In continuation to the said advice, the MoC had also written a follow up letter dated March 18, 2015 to the FBR that clearly states: “It is clarified that exports from Export Processing Zone and Manufacturing Bonds (EPZMB) are not liable to imposition of sales tax.”
But, Hashim regretted that despite such a clear clarification, the FBR was continuously demanding sales tax on export of pipe through manufacturing bonds.
Therefore, Hashim said, “We have no choice except urging the finance minister to issue orders to the FBR for compliance with the clarification given by Ministry of Commerce, so that the export of pipes to Afghanistan and South Asia can be continued.”
The PSPA chairman said that Afghanistan and South Asia had a great demand for steel line pipe, but the levy of sales tax had made Pakistani pipes uncompetitive in this market. He acknowledged with thanks that the commerce minister had issued a clarification in this regard. But, unfortunately, the FBR is still unable to take cognizance of the issue, he said, adding that government departments like the FBR should move in line with the government agenda of export promotion. However, he was hopeful that the FBR, with the support of the MoC, would resolve the decade-old issue sooner than later.
But at the same time, he was worried that a long delay on acceptance to a genuine demand of the PSPA may hinder the bright export opportunities for Pakistan to Afghanistan and South Asia, as export of steel pipes to the region has already shrunk to a desperate level.
