Value added textile exporters facing severe hardships

KARACHI: Huge amount of exporters’ liquidity of billions of rupees in shape of refunds of sales tax claims, customs rebate, withholding tax and payments of DDT and DLTL have been stuck up with the government causing great sufferings to the already harassed and burdened exporters who are now at a loss to understand how to make both ends meet and such an alarming situation will ruin the export business of the value-added textile exporters.

The government has been making just announcements without any firm commitment to release the refund claims since last several years.

“If the refunds are not paid, more than 30% Industry shall be compelled to closure leading to massive unemployment which may create severe law and order situation,” lamented Muhammad Jawed Bilwani, Chairman, Pakistan Apparel Forum.

He said that in the history, there was never such hardships caused to the Value Added Textile Exporters who were battling for their survival in the global market against severe competition from better endowed neighbouring and other competing countries in the face of the severest ever liquidity crunch in the so-called sitting business-friendly government. Sales tax refund claims and customs rebate claims are not being paid to them for no reason at all.

He stated that under section 10 of the Sales Tax Act 1990, sales tax refunds to exporters are required to be paid within 45 days and under Sales Tax Rules, 2006 as per Expeditious Processing and Payment of Refunds, Concerned RTO /LTU will arrange issuance of cheque for the amount cleared by RMS within 7 working days for the receipt of the E-RPO. In-spite the above section and rules, exporters refunds of sales tax and customs rebate claimed approx. 1.5 years back are still pending with the government.

He articulated that value-added textile export sector is the backbone of Pakistan’s economy earns the major amount of foreign exchange and revenue for the government. Besides, the sector is also labour-intensive and largest employment provider and generator.

He focused that to overcome the challenges, to provide an enabling business environment in country and to create level playing field for textile exporters it is crucial that the Government, instead of lip-service, before concluding its tenure, must take practical steps and measures to facilitate the textile export industry in real sense while according priority to resolve their issues and problems and immediately release long pending refunds of textile exporters. 

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