Mr Syed Ali Ahsan, Chairman APTMA informed that as both the traders and loom owners are not ready to provide identity cards, sale of textile mills to domestic market has come to a halt. He said a good number of mills had either reduced production capacities or closing down their operations. Collection of tax revenue from local sales had increased in the month of July which could possibly be due to the fact that there was no condition of identity card.
Therefore, the industry kept dispatching sales during the month of July, which had reflected in tax revenue data.
However, dispatches of yarn and fabric from mills to the domestic market were at standstill since the condition of identity card had been re-imposed from 1st of August.
He said the industry was facing serious liquidity constraints as there were no off take of dispatches thus either reducing their production capacities or closing down their operations.
He said the latest data of mills’ operations suggested that mills were being closed down on fast pace because of the fact that the domestic market was totally at standstill.
He said the government should either make clear that the industry would not be allowed to do business with unregistered buyers or the government should educate the unregistered sub-sectors that why the condition of identity card had been re-imposed.
He said the government should remove the condition of identity card unless all the stakeholders were on board.
The government should also extend facilitation and simplification to the intending clients interested in registering for sales tax.
He said the government should relax the condition of identity card if the buyer was ready to make payment through banking channel. Further, he urged the FBR to equalize the sales tax rate for both registered and unregistered buyers, as the difference of 17 and 20 percent respectively could encourage the phenomenon of flying invoices.
He has urged the government to take immediate decision to avoid a total closure of the textile industry, especially when cotton season is also round the corner.
It will also affect government revenues as well as exports, he said, and added the government should end the prevailing uncertainty without delay.
