Exporters unable to honour export commitments

RECORDER REPORT

KARACHI: Exporters are facing difficulties to fulfill their export commitments due to extreme liquidity crunch coupled with cash flow problems due to the delay in payment of billions of rupees refund claims.

Exporters urged the government to restore the zero rating of sales tax (0 percent) ie, no payment no refund regime for the five export sectors including textile as current refund payment system has failed to ensure timely payment of claims.

They said that despite commitments with textile exporters, the federal government has failed to clear the pending refund claims and extreme cash flow crunch has seized the industrialization and export growth.

Chaudhry Salamat Ali, Central Chairman, Pakistan Hosiery Manufacturers & Exporters Association (PHMA), Muhammad Jawed Bilwani, Chairman, Pakistan Apparel Forum, Aslam Karsaz, Chairman (SZ) PHMA and Mian Naeem Ahmed Chairman (NZ) PHMA alleged that the government is unable to fulfill its commitment to clear refund payments expeditiously.

They said that despite this crisis, textile sector remained the most vibrant sector of the economy with its share of 60 percent in total exports of the country, they added.

They said that stuck-up refund claims of sales tax, income tax, duty drawback & textile policy incentives and high-priced energy inputs are adversely effecting the production, employment and exports. Hosiery sector is one of the most affected sectors, they added.

Exporters demanded of the federal government to honor the commitment and ensure swift payments to exporters against their refunds, within 72 hours after submission of sales tax refund claims otherwise government should restore the zero rating of sales tax (0 percent) i.e. no payment no refund regime for the five export sectors including textile.

“It was agreed between the government and textile sector that sales tax refund claims payments will be made immediately after submission of Goods Declaration on the pattern of Bangladesh model and in case the government fails to make swift payment to exporters viz new refund system in three months, the government will restore the zero rating of sales tax and no payment no refund regime,” they maintained.

They also demanded that sales tax on utilities should not be charged as they fall under the Final Tax Regime (FTR).