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The Southern India Mills’ Association

Committed to Foster the Growth of the Textile Industry

Pakistan:Textile Division proposes to extend Prime Minister Package for 2018-19

The Textile Division has proposed to extend the Prime Minister’s Rs180 billion package to the next fiscal year 2018-19. Sources revealed that the Textile Division, in its budget proposals 2018-19 recommended extending of PM package to another year.
The government had announced the package in the first month of 2017. The package has been divided into two parts. The first one was from January 16, 2017 to 30 June 2017, and the second one was from 1 July 2017 to end of the current fiscal year.
Most of the portions in the export package were related to the textile sector. Sources told that the government has so far paid around Rs20 billion against the claims of Rs41 billion in both phases. The government will soon pay Rs13 billion under the phase 1 of PM export package, sources added.
The Textile Ministry recommended to reduce the tariff rationalisation surcharge to 50 per cent, moreover, RMLG prices may be brought to Rs700/mmbtu from Rs1000/mmbtu.
Presently, the tariff rationalisation surcharge is Rs3.10/KwH and it will cost Rs26 billion per year. If the government reduces the RMLG prices than it would approximately cost Rs18.5 billion per year.
The ministry further proposed to pay immediately the sales tax liability and custom duty drawback refunds of Rs35.5 billion and Rs7.5 billion respectability.
Zero rating of sales tax is not available on packing material, thereof, the exporters have started importing packing material under temporary importation schemes, it is therefore proposed that zero rating of packing material may be extended to export oriented sectors.
Sources said that if the government announces zero rating on packing material, the FBR is of the view that tax collection might be reduced to Rs10.5 billion annually.
It is further proposed that Federal Board of Revenue (FBR) should register the power loom units so the power loom sector will be given zero rating on electricity.
The pending liabilities of the textile policy 2014-19 to the tune of Rs3,6618 may immediately be paid, sources added. A delegation of APTMA has met with the Prime Minister today (Tuesday) and handed over their proposals to him. They also requested the PM to allow relief on electricity and RLNG prices.
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