Ginners in shock as 18pc GST retained

The cotton ginning and oil mill industries across Pakistan are reeling from profound disappointment and concern following the federal budget’s failure to abolish the sales tax on cotton and its by-products and to remove the sales tax exemption on imported cotton. This decision comes despite strong recommendations from two committees established by Prime Minister Shehbaz Sharif, raising fears of further factory closures, a significant reduction in cotton cultivation, and a sharp decline in cotton prices. Reports indicate a staggering drop of Rs1,000 per maund in cotton prices post-budget. Ginners say a ‘flawed’ Export Facilitation Scheme (EFS) introduced several years ago allowed sales tax-free import of cotton, cotton yarn, and grey, while domestic purchases of these very items remained subject to 18 per cent sales tax.