Lahore Chamber of Commerce and Industry calls for withdrawal of decision to raise rate of General Sales Tax on Tractor Industry
Lahore, December 09, 2013 (PPI-OT): The Lahore Chamber of Commerce and Industry (LCCI) on Monday called for withdrawal of decision to raise rate of General Sales Tax on Tractor Industry as increase from existing rate of 10 per cent to 17 percent from January 1, 2014 would hit the entire agriculture sector hard besides rendering thousands of skilled workers jobless. In a statement issued here, the LCCI Acting President Mian Tariq Misbah said that the tractor assemblers and their 300 plus vendors fear a severe drop in sales as a result of massive hike in GST from 1st January 2014.
He said that 17% GST to be paid by the country’s farmers will further curtail their ability to purchase tractors. Despite producing the cheapest tractor in the world, the Pakistani farmer is still not able to afford a tractor and requires support in the form of subsidies and loans from the government to purchase a tractor. With no subsidies on tractors in the current federal and provincial budgets, meager loaning by ZTBL in the absence of a Federal Agricultural Ministry (thanks to the 18th amendment) and GST set to go to 17% under IMF pressure, will all add up to massive drop in tractor sales.
The LCCI Acting President said that Pakistan lags far behind India in crop yield, crop intensity and number of tractors per hectare. According to agri experts Pakistan currently needs 800,000 more tractors to match India in per hectare tractor population. He said that an industry with installed capacity of 100,000 units per annum is expected to close the current financial year with less than 30,000 units.
This means 70% drop in revenues for the FBR from this industry in the FY 2013-14. In sharp contrast India with 0% central GST, will close this year with the highest ever production of over 600,000 tractors, ie 20 times higher than Pakistan.
Mian Tariq Misbah said that drop in tractor sales means unemployment for thousands of skilled workers who work in hundreds of factories producing tractor parts for the tractor assembly plants. Employment in rural Pakistan will also be curtailed, as tractor is a major source of employment generation in the form of drivers, mechanics, and spares/lub suppliers etc.
The LCCI Acting President said that an industry that had crossed 70000 units production for 2 consecutive years ie 2009-10, 2010-11, is bracing for below 30,000 units production this year. The worst hit will be Punjab where 3 operational assembly plants are located along with the major tractor parts manufacturing cluster located in and around Lahore.
For more information, contact:
Lahore Chamber of Commerce and Industry (LCCI)
Lahore -54000, Pakistan
Tel: +9242 111 222 499
Fax: +92 42 636 8854
Category: Chambers of Commerce