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Business Recorder
4 days ago
- Business
- Business Recorder
Export-oriented industry rates: MoC opposes gas/RLNG supply to Ghani Glass
ISLAMABAD: Ministry of Commerce (MoC) has opposed provision of gas/RLNG to M/s Ghani Glass Limited as per rates made available to the export-oriented industry. According to the details, in 2019, M/s Ghani Glass Ltd. filed a Writ Petition in the Lahore High Court and prayed that the concessionary gas/RLNG tariff-fixed at Rs. 600 per MMBTU granted to the zero-rated/export- oriented sectors, may be extended to the Petitioner, as well. Petroleum Division, Oil and Gas Regulatory Authority (OGRA), Sui Northern Gas Pipeline Limited (SNGPL), and Federal Board of Revenue were the original respondents in the Writ Petition (Annex-I). Ministry of Finance and Ministry of Commerce were not impleaded as parties, in this case, until April 07, 2025. The Lahore High Court, in its judgment of April 10, 2025, directed: (i) Ministry of Finance in coordination with the Ministry of Commerce and other relevant stakeholders to, within 90 days, place the case of M/s Ghani Glass Ltd. before the ECC of the Cabinet to develop a uniform policy ensuring that only export-oriented industry receive tariff concession rather than making sector-based classification that allow non-exporting industry to benefit unfairly;(ii) in case of placement of the Case, the ECC was directed to consider within 60 days, the request of the petitioner for grant of concessional tariff in respect of price of Sui Gas/RLNG with specific reference to the point of discrimination excluding glass from the export-oriented sectors;(iii) the relevant authority was also directed to look into charging concessionary tariff from the petitioner from the date of filing of the case (i.e., 2019) till the period the benefit was extended to five zero-rated/export-oriented sectors ; and (iv) ECC was directed to take into consideration the potential of glass industry to further increase export abroad to fetch maximum foreign exchange. Furthermore, the said forum was also tasked to determine whether it is feasible to charge high prices to any export-oriented industry as compared to the price prevalent in other countries. According to Commerce Ministry, the Federal Board of Revenue in an SRO 1125(1)/2011, granted zero-rated sales tax status to the five key sectors: textiles (including jute), carpets, leather, sports goods, and surgical instruments. In 2018, the Petroleum Division extended concessionary tariff on RLNG at PKR 600/MMBTU to the exporters of the same five zero-rated sectors. Following the withdrawal of SRO 1125(1)/2011 through the Finance Bill 2019, an administrative gap emerged regarding the continuation of concessionary gas tariffs. Ministry of Commerce, therefore, declared the erstwhile zero-rated sectors as 'Export-Oriented Sectors' through an OM of December 13, 2019. Accordingly, concessionary gas tariffs continued till 2023 and were discontinued afterwards. Commerce Ministry further stated that concessionary energy tariffs which were being granted to the five export-oriented sectors have been discontinued and are no longer available to any sector. Tariff concessions were granted to those sectors whose share in Pakistan's total exports were significant in 2011, while share of the glass sector with an annual export $ 15.9 million was negligible. Ministry of Commerce on the advice of Ministry of Law & Justice, filed aCivil Petition for Leave to Appeal (CPLA) on June 12, 2025 in the Supreme Courtof Pakistan and has contested the judgment of Lahore High Court. Commerce Ministry was of the view, that the claim made by M/s Ghani Glass Limited for grant of tariff concessions on gas/RNLG is untenable and may not be entertained. Copyright Business Recorder, 2025
Business Recorder
07-05-2025
- Business
- Business Recorder
TMA advocates critical budgetary reforms at Senate body moot
KARACHI: Towel Manufacturers Association of Pakistan (TMA) played an active role in the Standing Committee of the Senate on Budget Consultation 2025-26, where Aamir Hassan Lari and Muhammad Haroon attended on behalf of the association and brought forward a detailed budget proposal that focuses on empowering Pakistan's export industry, industrial development, and financial stability. At the meeting, TMA highlighted the imperative to implement policy reforms aimed at increasing transparency, simplifying tax processes, and bringing relief to exporters much-needed. The association identified some of the key steps that would increase exports, lower financial costs, and increase industrial competitiveness. Major budgetary recommendations submitted by TMA Revival of SRO 1125(I)/2011 TMA vehemently supported the revival of SRO 1125(I)/2011, a policy that had earlier allowed zero-rating for the textile industry. Revival of this rule would: Increase exports and industrialization by lowering the cost of doing business. Reduce corruption by removing unnecessary tax complexities. Simplify tax procedures, making it easier for businesses to comply. Increase transparency and regain confidence in the economic system, promoting both local and foreign investments. Reinstatement of the Export Facilitation Scheme (EFS) on Local Purchases TMA requested the government to reinstate the EFS in its original manner, enabling exporters to procure raw materials locally under the scheme. This measure would: Encourage domestic production, cutting dependence on imported raw materials. Sustain the development of local industries, providing employment. Strengthen Pakistan's industrial base, enabling it to become more competitive in the international market. Transition to Final Tax Regime (FTR) for Exporters from NTR The association recommended that exporters and indirect exporters switch from the Normal Tax Regime (NTR) to the Final Tax Regime (FTR) with a final tax of 1%. This policy is designed to: Lower the tax burden of exporters so that they can expand business. Simplify taxation processes, removing unnecessary bureaucratic roadblocks. Promote entry of new exporters into the market by offering a more stable tax regime. Accelerated Refunds to Exporters TMA mentioned the pending refunds for Duty Drawback, DLTL (Drawback of Local Taxes and Levies), R&D, Income Tax, and Sales Tax and asked the government to settle them at the earliest to avoid export financing burden. The association suggested: Instant payment of outstanding refunds to keep exporters liquid. Redeployment of the Export Development Surcharge fund to settle outstanding DLTL and R&D claims in case of unavailability of government funds. A system of structured refunds to avoid future delays and enable timely payment. Reduction in Exporters' Electricity Rates To ease cost burdens on exporters, TMA suggested a cost-sharing arrangement where the government would bear 50% of the cost of electricity and the Export Development Fund (EDF) would bear the remaining 50%, reducing the rate of electricity to Rs 5/KWH. This step would: Lower the cost of production, making Pakistani exports competitive in the international market. Promote industrial development, resulting in more employment opportunities. Support small and medium-sized enterprises (SMEs) in the textile industry by reducing operational costs. Reform in Export Development Fund (EDF) Allocation TMA recommended halting EDS collection from exports until funds currently available are utilized to the maximum. Moreover, when EDS collection is resumed, sector-wise allocation of funds should be made so that every sector has its own Research & Development (R&D) initiatives. This reform would: Ensure equitable distribution of funds, enabling each sector to invest in innovation. Encourage industry-focused R&D, with a view to developing technologies. Make Pakistani textile and towel production industries more globally competitive. Commitment to Economic Growth and Industrial Development The suggestions made by TMA mirror the imperative to make policy interventions for the support of Pakistan's export industry, improvement in industrial competitiveness, and facilitation of a more business-friendly economic environment. The association continues to be willing to work together with policymakers for the effective implementation of these recommendations for the welfare of the textile sector and the national economy. TMA calls upon the government to include these proposals in the next budget to facilitate sustainable growth in exports, industrialization, and economic stability. The association is optimistic that these steps will be included in the national budget, leading to a robust, resilient economy. Copyright Business Recorder, 2025
