FBR urged to clear Rs5b sales taxes refunds

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Staff Reporter
Lahore

Chairman Pakistan Association of Automotive Parts and Accessories Manufacturers (PAAPAM) Abdul Rehman Aizaz has asked the Federal Board of Revenue (FBR) to clear about Rs.5 billion sales tax refunds of tractor industry immediately, as non-disbursement of refunds might cause delay in payment to the vending industry.

In a joint statement, with Vice Chairman Abdur Razzaq Gauhar and Vice chairman Irfan Qureshi here on Monday, he observed that tractor industry is facing severe liquidity crunch, as Millat Tractor’s overdue sales tax refunds of about Rs3.5 billion while Rs1.4 billion of Al Ghazi are pending for the last one and a half year.

As a result, he said there is a strong possibility that they may not be able to continue to make regular payments to around 250 vendors, engaged in making parts and accessories for the local tractor industry and creating job opportunities for about hundreds of thousands of families.

Abdul Rehman Aizaz pointed out that tractor manufacturers and their vending industry are inter-connected and if refund payments are stopped to the tractor makers the vendors will also face cash flow blockage.

It is to be noted that the sales tax is paid by the vending industry on supply of parts to tractor manufacturers, who return the tax amount after they get refunds of the same from the FBR.

Currently the output sales tax is chargeable on supply of tractors at 5 percent against 17 percent paid on purchasing local or imported raw materials and components.

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