Millat Tractors Limited (PSX: MTL) has refuted recent media reports regarding its closure, clarifying that it remains operational.
In a stock filing, the company addressed a news article published in the Daily Dawn on Friday, August 9, 2024, concerning a vendor’s halt in supplying tractor parts to assemblers. MTL stated, “We inform all stakeholders that, as of now, MTL has not stopped operations. Should this situation change, MTL will notify the stock exchange.”
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To provide further clarification, MTL explained that the Goods and Services Tax (GST) on tractors is 10%, while the GST on all input raw materials is 18%. This discrepancy results in a continuous stream of refund claims, and the Federal Board of Revenue (FBR) has yet to establish a mechanism for processing these refunds. MTL has sought clarification from the FBR on this matter.
Currently, MTL is continuing operations, although sales and bookings are limited to agri-loan customers. This restriction has led to an accumulation of Completely Built Units (CBU) inventory and has tightened working capital. If the issue persists and the FBR delays clarification, MTL may have to consider a shutdown, the company added.
MTL primarily assembles and manufactures agricultural tractors, implements, and multi-application products. The company also sells, implements, and supports IFS applications in Pakistan and abroad.
On Monday, MTL’s stock closed at Rs. 608, down 1.35% or Rs. 8.32, with a turnover of 56,926 shares traded.
