The Pakistan Carpet Manufacturers and Exporters Association (PCMEA) has called for the refund of excess sales tax collected on semi-finished carpets imported from Afghanistan. According to the association, an 18 percent sales tax is applicable under SRO, but a 25 percent rate was charged. The PCMEA also demanded the withdrawal of a 0.90 percent cess imposed on exports and imports in Punjab.
Frustration Among Exporters
The association stated that unresolved issues facing the country’s oldest export-oriented handmade carpet industry are increasing frustration among manufacturers and exporters who earn valuable foreign exchange for Pakistan. In a joint statement, PCMEA Chairman Mian Ateeq-ur-Rehman and Vice Chairman Riaz Ahmed expressed concern over delays in the release of funds for the 42nd International Carpet Exhibition, scheduled for October in Lahore, which has halted preparations.
Sales Tax Discrepancy
Referring to SRO 297(I)/2023 issued in March 2023, they noted that according to Schedule No. 1 (Imports and Supplies), Serial No. 5, carpets imported from countries other than Afghanistan are subject to 25 percent sales tax, while those from Afghanistan enjoy a concessional rate of 18 percent. Despite this clear legal position, until the closure of the Torkham border, carpets imported from Afghanistan were continuously charged 25 percent sales tax instead of the applicable 18 percent rate. The association demanded guidance on the procedure for refund of the excess sales tax collected and urged timely refunds for affected exporters.
Cess on Exports and Imports
Mian Ateeq-ur-Rehman and Riaz Ahmed also expressed concern over the Punjab government’s decision to impose a 0.90 percent cess on exports and imports, stating it has further increased difficulties for struggling exporters. They urged the government to review the decision and withdraw the cess to promote exports and business activity.
International Carpet Exhibition at Risk
The association further expressed concern over the non-release of funds for the 42nd International Carpet Exhibition to be held in Lahore in October. Delays in funds have badly affected contact with foreign buyers, promotional campaigns, and other preparatory work. They warned that if the situation continues, it would become difficult to achieve the desired objectives of the exhibition. They also pointed out that Pakistan’s traditional rival country may take advantage of the situation, as it seeks to disrupt the continuity of Pakistan’s handmade carpet exhibitions to attract international buyers.
The association urged the government to immediately release funds for the exhibition to ensure timely contact with foreign buyers, promotional activities, and administrative preparations.
Heritage Restoration
In a separate development, Ewing Hall is to be restored as a heritage building, preserving its historical significance.
