SRO 1125 hitting the registered suppliers of packaging material hard: LCCI

Lahore, October 17, 2016 (PPI-OT): Cold shoulder of the Federal Board of Revenue (FBR) on SRO 1125(I)/2011 is adding to the miseries of the registered suppliers of packaging material therefore FBR should review this SRO immediately in the larger interest of the economy.

In a statement issued after hours long meeting with the representatives of packaging material suppliers, the LCCI President Abdul Basit and Senior Vice President Amjad Ali Jawa said that it is a matter of concern that despite various appeals of the Lahore Chamber of Commerce and Industry, no laxity is being shown by the Federal Board of Revenue (FBR).

The LCCI office-bearers said that SRO 1125(I)/2011 has pushed the registered suppliers to the wall as manufacturers have started to make their purchases from unregistered suppliers or from other countries.

They said that most of the packaging industries are supplying packing material to the exporters and are duly registered for sales tax. They said that the denial of input tax/refund to exporters will encourage them to make purchases from un-registered persons so that only 1% tax is required to be withheld, instead of making purchases from the registered manufacturers/suppliers who will charge sales tax @ 17%. They said that the business of registered manufacturers/suppliers of packaging material will, therefore, come to a standstill and they will be forced either to close down or to de-register themselves and go in the un-organized sector.

The LCCI office-bearers said that the problem will be aggravated in view of the fact that most of the large exporters/export houses will obtain DTRE for import or local purchase of various items including packing material. They will import packing material free of customs duty and sales tax under the said scheme and there will be no need for them to make purchases either from registered suppliers or from un-registered suppliers. They said that this will cause loss of local economic activity resulting in huge revenue loss to the national exchequer.

For more information, contact:
Shahid Khalil
Information Department
Lahore Chamber of Commerce and Industry (LCCI)
Lahore -54000, Pakistan
Tel: +92-42-111-222-499
Fax: +92-42-36368854