APTMA asks FBR to allow super tax adjustment against refunds, instalment payments

The All Pakistan Textile Mills Association (APTMA) has urged the Federal Board of Revenue (FBR) to allow textile exporters to adjust their super tax liabilities against pending tax refunds and to permit payment of the remaining amount through instalments, citing liquidity constraints in the export-oriented textile sector.

In a letter addressed to FBR Chairman Rashid Mahmood Langrial, APTMA Chairman Kamran Arshad said tax field offices were still requiring exporters to pay the entire super tax liability in a lump sum despite earlier correspondence requesting relief.

The association said the textile industry respects the Supreme Court’s ruling upholding the levy of super tax under Section 4C of the Income Tax Ordinance. However, it argued that the financial position of many textile mills does not allow them to settle the full amount immediately.

APTMA also raised concerns about inconsistent practices across FBR field formations, stating that some taxpayers are being allowed to pay the tax in instalments while others are being directed to deposit the full amount at once.

The association proposed that super tax liabilities be adjusted against all verified and pending refunds, including income tax and sales tax refunds, without restricting adjustments to refunds from a single tax year.

It further suggested that if any amount remains after such adjustments, taxpayers should be allowed to pay the balance through instalments. APTMA cited the precedent set in the Gas Infrastructure Development Cess (GIDC) case, in which the Supreme Court allowed industry to clear dues in 24 monthly instalments.

The textile body also recommended that advance tax payments and previously assessed taxes be adjusted while determining super tax liabilities so that only the net payable amount is recovered.

APTMA raised another issue related to exporters who operated under the Final Tax Regime (FTR) until tax year 2024. It said the super tax for such exporters should be calculated on the basis of imputable income derived through reverse calculation of income corresponding to taxes already paid under the FTR.

The association called on the FBR to consult industry stakeholders to develop a clear methodology for calculating imputable income and to provide uniform guidance to field formations.

APTMA said the export-oriented textile sector continues to face liquidity pressure due to high energy costs, elevated interest rates and a slowdown in export orders, adding that immediate recovery of the full super tax liability could further affect operations.