Long-Pending Refunds Must Be Cleared, Proposed in Budget to Increase Input Tax Adjustment Under Sales Tax Section 8B from 90% to 95%, PVMA Chairman
Karachi: Chairman of the Pakistan Vanaspati Manufacturers Association (PVMA), Sheikh Umer Rehan, has strongly urged the federal government and the Federal Board of Revenue (FBR) to immediately release billions of rupees in long-pending sales tax refunds owed to the ghee and edible oil industry.
He warned that the continued delay in refund payments has created a severe financial and liquidity crisis for the sector, making it increasingly difficult for manufacturers to manage routine business operations and maintain imports of essential raw materials.
Sheikh Umer Rehan stated that billions of rupees in refunds due to the ghee and oil industry under Section 8-B of the Sales Tax Act remain outstanding with the FBR. He said these payments have been pending for an extended period, and the government’s failure to release the funds is placing significant pressure on manufacturers.
He emphasized that the refunds represent the industry’s own money, already deposited with the government in the form of taxes. Therefore, he said, the government should ensure their immediate disbursement to support industrial activity and keep the economic wheel moving.
Referring to the upcoming federal budget, the PVMA chairman proposed increasing the input tax adjustment limit under Section 8B of the Sales Tax Act from 90 to 95 percent. He called on the government and the Ministry of Finance to formally incorporate the proposal into the budget and ensure its prompt implementation to support the industry’s sustainability and improve the ease of doing business.
Sheikh Umer Rehan further noted that the ghee and edible oil industry plays a crucial role in Pakistan’s food security and employment generation. He cautioned that failure to address the industry’s concerns, including the immediate release of refunds and relaxation of tax regulations, would increase production costs, which would not be in the interest of either the economy or the industry.
He expressed hope that the Prime Minister and the Finance Minister would take immediate notice of the issue and direct the FBR to expedite the payment of all outstanding refunds.