Tax relief for textile units: Board of Investment blames Commerce for delay in cases finalisation

ISLAMABAD (July 01 2003) : The Board of Investment (BoI) has blamed Ministry of Commerce for delay in the finalisation of cases of textile units seeking tax concessions available to the value-added industry under SRO. 369(I)/2000.

Forty-one textile mills have been provisionally released imported machinery and equipment without payment of duty, and now BoI is asking the concerned authorities to shift them to value-added category on the basis of above-mentioned notification.

Sources said here on Monday that the BOI has taken up the matter with Central Board of Revenue (CBR) and Commerce Ministry for finalisation of pending cases.

In a complaint to the Commerce Ministry and CBR Member Customs Zafar-ul-Majid, BoI has said that the authorities must take into account the summary moved to the Cabinet Committee on Investment (CCOI) pertaining to 'Review of the procedure and criteria for determining level of value addition' in 2000.

The cabinet committee decided that the pending cases of textile sector (spinning) would be finalised on approval of the package under Textile Vision-2005 so that same treatment is given to this sector.

BoI said that the said decision of CCOI was conveyed to Ministry of Commerce for implementation on December 26, 2000 followed by a number of reminders issued to this ministry.

However, no reply was received from the Commerce Ministry on the issue.

Later on, a summary was also submitted to the then Minister for Commerce, Industries and Production on May 21, 2002, who approved that the Commerce Ministry would implement the aforementioned CCOI's decision so that the pending cases of textile sector seeking benefit of the incentives for value-added category could be finalised.

BoI observed that instead of implementing the CCOI decision as directed by the Minister, the Commerce Ministry forwarded their 'no objection on November 4, 2002 to CBR for necessary action.

Tax authorities were of the view that CBR on its own has no legal authority to decide these cases except to enforce demand for recovery of statutory duty applicable at the time of import.

BoI added that commerce ministry should forthwith implement CCOI decision/Minister's directive, being custodian of the Textile Vision-2005.

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