Letter from Qamar-ul-Islam & co., Advocates, Karachi

LETTER FROM <!--[if gte mso 10]> LETTER FROM QAMAR-UL-ISLAM & CO., ADVOCATES, KARACHI TO CHAIRMAN, FEDERAL BOARD OF REVENUE (Re: Zero rate of sales on cotton cloth manufacturers is of no benefit to small manufacturers with turnover of less than Rs.5 Million) [2nd December, 2008] To The Chairman, Federal Board of Revenue, F.B.R. House, Islamabad. SUBJECT: ZERO RATE OF SALES ON COTTON CLOTH MANUFACTURERS IS OF NO BENEFIT TO SMALL MANUFACTURERS WITH TURNOVER OF LESS THAN RS.5 MILLION. It is conceptual, universal practice, globally accepted and employed that small tax payers are absolved of taxes mischief and relief is provided to them, but the revision of Zero rated sales tax is not providing any relief to small tax payers. Huge Sales taxes are recovered on Electricity bills of small cotton cloth manufacturers. Sales Tax Department is of view that a registered person at Sales Tax with a turn over of above Rs.5 million only can be given benefit from the issuance of exemption certificate, that no sales tax be recovered from his Electricity bill. And similarly Refund of Sales Tax recovered on Electricity bills, also can be allowed to such registered person only whose turn over is above Rs.5 million. No benefit can be given to even such registered persons who voluntarily obtain registration, and their turnover does not exceed Rs.5 million. The matter is of serious nature and demands your due consideration and immediate attention.