July 11, 2019: All Pakistan Ceramic Tiles Manufacturers Association (APCTMA) has urged the government to reconsider the inclusion of Ceramic Tiles in the Third Schedule of the Sales Tax Act 1990 as it will have negative impact on the industry which is already fighting for survival.

The government has included “Tiles” in the Third Schedule of the Sales Tax Act 1990 “STA 1990” vide Finance Act 2019 whereby it has been made mandatory to print retail prices on each box of tiles.
The spokesman of All Pakistan Ceramic Tiles Manufacturers Association (APCTMA) in a statement issued here said that there are a number of reasons for which this product [tiles] should be removed from Third Schedule.

“It is not practical for the manufacturers to print retail prices on each box since the manufacturing process and nature of plant are not that simple that may allow immediate printing of prices on tiles boxes,” said the spokesman.

“Unlike FMCG products, tiles fall under the category of “Durable Products” and these are produced and sold on order-to-order basis in different regions at different prices due to variable freight cost,” he added.

These are consumed over a longer period of time and in some cases, where a design or type of tile is stuck, it may remain in stocks for more than one year.

“Moreover, tiles are produced in various grades and types in hundreds of thousands of varieties which makes it impossible to print prices on each box. The inventory of tiles may be carried for years in the warehouses by a manufacturer and due to its weight, it is impossible to change prices on boxes once it is out from production hall,” reasoned the spokesman. 

Earlier, he added, in the Finance Bill the product “Tiles” was specifically excluded from the scope of Third Schedule but surprisingly when the bill converted into Finance Act and published in the official Gazette of Pakistan it included tiles in the Third Schedule of STA 1990.

“The retail prices may change due to increasing cost of production and devaluation of Pak rupee and it may create complications for the manufacturers carrying huge inventories in their stocks,” said the spokesman.

In the field of ceramic tiles, added the spokesman, the prices cannot be fixed for all customers as customers demand heavy discounts and there are different types of customers in the market to whom different trade discounts have to be offered. “There are corporate discounts, bulk buying discounts, territory-wise different discounts, etc. which a manufacturer has to offer in order to retain a customer,” stated the spokesman.

He added that the ceramic tiles market is led by imported tiles and there is a huge influx of imported tiles in the local market, hence the local manufacturers are following the day to day changing trends in the variety of tiles coming from various sources of imports.

“A manufacturer has to produce new designs and varieties on daily basis in line with the newer varieties of imported tiles which are sold at different prices according to their respective manufacturing costs,” said the spokesman.

“FBR should allow at least one-year time to the local manufacturers (if tiles are kept in 3rd schedule) to comply with the requirements of printing retail price on each box as currently none of the manufacturer has basic infrastructure to comply with the requirements”.

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