Daily Times

KARACHI: Associations of prime export-oriented sectors expressed dismay over delay/unjustified tactics of Federal Board of Revenue (FBR) for rolling back refund payment orders (RPOs) already issued to Sales Tax (ST) refund claims for textile, leather, surgical, sport goods and carpet sector exporters.

Refunds is pending since long in million for rupees at Sales Tax Collectorates in various parts of the country, executive members of the associations regretted.

Refraining refunds by FBR any further would certainly affect adversely to member exporters of all sectors with strong financial stringencies being confronted by them in hampering their business/export activities smoothly and conveniently.

Ghulam Rabbani of Pakistan Yarn Merchants Association, Anjum Zafar and Agha Saiddain of Pakistan Tanners Association, Jawed Bilwani of Pakistan Apparel Forum and surgical, sport goods and carpet sectors were of the view that FBR should have processed refund claims through expeditious refund system (ERS) for tax period July 2016 onwards and subsequently conducted post refund audit instead of asking field officials to do the scrutiny of already issued RPOs of ST refund claims as in result of that the situation would cause serious further liquidity crunch for them.

Zafar said member exporters/manufacturers were already suffering a lot for pending Duty Drawback and ST claims in lacking of insufficient fund allocation at Customs and Sales Tax Collectorates for onward disbursement of claims especially already issued RPO’s for ST.

Issue for deferred ST claims have been pending since 2011 which is also in million of rupees and ST department has not been not paying any heed for the settlement of these claims unless manual over ruling is allowed, Agha lamented.

Majority of claims are for services due to no correlation between provinces and federal government, these claims remain un-attended and are un-settled so far and pendency is increasing day by day and getting older, which would also be addressed for its adequate resolution to at least allow manual over ruling to close these old files with the motive for immediate disbursement of deferred ST claims for member exporters.

PTA executive members reiterated that owing inadvertent omission of remaining 8 HS Codes in SRO 62 (I)/2017, February 2017, which was issued in the wake of announcement of incentive made by PM, the 97-98 percent manufacturers/exporters of leather sector were still deprived to avail the incentive of 5 percent drawback against the Local Taxes and Levies and on persistent persuasion, the file is lying pending with Ministry of Finance for the final approval to the revision with inclusion of remaining 8 HS Codes for finished tanned leather in SRO 62, which would facilitate member exporters to compete in international market with due incentives of 5 percent.

They appealed PM and Federal Finance Minister to address this serious issue for the country’s exporters and direct concerned departments to remove anomalies and issue necessary directives for early release of ST refund. APTMA said the textile industry has been burdened with cross-tariff subsidy despite nearly zero line losses on textile industry feeders.

Pakistan is on the top in term of electricity tariff for industry in the region and cost of electricity for industry comes to around 15 cents in Pakistan, which is costlier in comparison to the regional competitors including India, Bangladesh and Sri Lanka.

The imposition of global line loss figures on textile industry has increased the electricity cost by 67 percent.

When PML-N took reign in 2013, Pakistan had recorded an export of $25,078 million, which were 1.1 percent higher than 2012. In January 2017, the SBP reported exports for 2015-16 were recorded at $21,977 million.