LAHORE: As Rs 205 billion of the value-added textile chain has been stuck up with the government and the textile sector is faced with serious financial crisis, the industry representatives said that the Federal Board of Revenue (RBR) still withholds over Rs.13 billion under Drawback on Local Taxes and Levies (DLTL) claims and about Rs.17 billion sales tax under refund claims.
The representatives said that its production could grow by over 80pc provided stuck-up funds were released immediately. They said that the country has failed to improve its textile exports despite getting the status of GSP plus.
The textile export fell by six per cent last month. On the other hand, India had provided full support to its textile sector, giving financial incentives and discount on the import of machinery so that the country could compete with Pakistani goods in the international markets.
Millions of rupees refunds of ST and Customs Rebates payable to the exporters have been held up despite firm assurance by the govt that all refunds of the exporters would be cleared by Sept, 2014, said PRGMEA Central Chairman Ijaz Khokhar said. He appealed to the government to issue instructions to the FBR for speedily releasing cheques against all the pending Sales Tax Refunds and Customs Rebate Claims to continue export earning process which is now on declining trend. He suggested the government to restore the ‘No payment no refund’ System for the value-added textile sector because collection of 2pc Sales Tax and then refunding is not only an exercise in futility but involves a large number of FBR personnel and precious time of FBR which can otherwise be utilised to bring more sectors in tax net to enhance revenue.
