Geo Business

Ginning factories resume work after withdrawal of withholding tax

ISLAMABAD: Ginning Factories have resumed their business after withdrawal of withholding tax on cotton trade by Federal Bureau of Revenue, Geo News reported on Wednesday. According to member Pakistan Cotton Ginners Association (PCGA), Ahsan-ul-Haq they had closed down their business some 18 days ago against the imposition of 3.5 percent withholding tax on trade of cotton by the FBR. He further said after the withdrawal of the said tax, ginning factories have resumed sale of cotton to ginning and textile mills. Earlier, a large number of cotton ginning factories were shut across the country, threatening to damage crop, as government and ginners remained at loggerheads over the issue of sales tax on the purchase of cotton. The government had imposed a 3.5 percent sales tax on the purchase of phutti (cotton seed). But ginners have been asked to collect the tax only from brokers and the middlemen, leaving out the farmers who directly sell the crop. While PCGA had been on strike since the first week of August.