ISLAMABAD: The tractor industry on Tuesday expressed hope that the announcement of subsidy on sales tax on the locally-manufactured tractors for a period of one year by the Economic Coorination Committee (ECC) would help the industry to get back on track if swiftly implemented.
“It’s a good step by the government in these testing times to give relief to the agricultural sector, which is the backbone of our national economy,” said Mohammad Shahid Hussain, Al Ghazi Tractors Chief Executive Officer, said in a statement.
“Now the early finalisation of this subsidy is the need of the hour to provide stimulus to the tractor industry and revive its sales, which already took a major hit due to COVID-19,” he added.
However, Hussain warned that if not implemented immediately, this subsidy would do more harm than good to the already ailing tractor industry.
“Similar subsidies were announced in the past but the implementation was delayed for quite a long time, resultantly the sales of the tractor industry got hit really hard due to the delay in issuance of the relevant notification,” he recalled.
“The customers understandably have the tendency to hold back their money waiting for the prices to decrease after subsidy, which therefore should be done instantly to avoid hurting the tractor sales badly and making this good gesture counterproductive,” said Hussain.
“This is exactly what is happening now, as our customers who were planning to purchase tractors are now waiting for the SRO to become effective to avail discounted price due to subsidy. This is very dangerous as the industry has sold insignificant quantum this month,” he said, adding the industry, which restarted working last month after lockdown, will continue to pile up inventory of tractors which may lead to production cuts and plant shutdown
Hussain appealed to the government to issue the notification of this subsidy urgently to revive the sales of tractors in the country. He also requested for release of remaining sales tax refunds of the tractor industry, which would help in resolve cash flow issues.
