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Govt urged to exempt surgical forging units from GST

RECORDER REPORT

SIALKOT: The Chairman of Surgical Instrument Manufacturers Association of Pakistan, (SIMA), Ch. Amjad Ali Cheema, has said that hammer manufacturing industry consists of surgical forging small units that supply/sell semi-finished goods to the surgical exporters. In Sialkot and Daska, total number of such units is about one hundred. All these units supply their products exclusively and totally to the exporters of surgical goods who export these products after passing these through various stages of processing and finishing. Thus the surgical forging units constitute the position of spinal cord in the surgical instruments exports because they supply essential semi-finished raw material to surgical exporting industry.

Talking to newsmen here on Friday he said that an export sales the general sales tax is zero-rated and the exporters claim refund of input tax imposed/paid on purchases of these semi-finished goods from the surgical forging units.

Cheema emphasised that the surgical forging units are running their manufacturing units on very small scale in the nature of cottage industry. Due to shortage of capital they are absolutely not in a position to engage sufficient educated staff and due to this factor it is impossible for them to maintain the documents/record regarding sales tax.

He said there is no demand whatsoever of the products of the surgical forging units in the local market for local sale and the sale is entirely with exporters. Since export supply regarding general sales tax is zero-rated, even if these units charge sales tax on their invoices the general sales tax so charged would be refunded to the exporters and there will be no gain whatsoever to the government. As net result, except loss of substantial labour, time and energy of the staff and tremendous setback to the business of the surgical forging units, as well as extreme mental tension and torcher, this would be an exercise in futility, against all norms of wisdom and national interest.

Amjad said that the Sales Tax Department has been strongly pressurising these forging units for sales tax registration for the last many weeks and is not ready to consider their pleading that they are unable to maintain the sale tax record due to illiteracy of the proprietor as well as their staff and shortage of capital. It is further pointed out that supplies of the suppliers of goods to the exporters are already exempted from deduction of income tax u/s 50(4) of Income Tax Ordinance 1979 clause 37(a) of the second schedule.

In view of the above, SIMA has urged to grant exemption to this industry from the levy of general sales tax so that exports can be increased. The Surgical Association, he said, was making this appeal in all sincerity and in the national interest and it is feared that if justice is not done than Hammer Manufacturing Industry will be forced to close down its business which will also result into unemployment and starvation of countless family members of the proprietors and their workers.