The All Pakistan Bedsheets Upholstery Manufacturing Association (APBUMA) has submitted its proposals to the government for budget 2021-22, which stated that the federal government rescinded SRO1125 and imposed 17 percent sales tax on erstwhile five zero-rated export sectors and exporters, are required to apply for refund after export of consignment.
Number of exporters has been decreased as compared to last year due to imposition of 17 percent sales tax which blocks exporters’ precious liquidity. It is observed that the exporters, who have filed their refund claims to date have received 35 percent of claims payment only, while 65 percent of the refund claims are stuck up with the government, which cumulate approximately 12 percent amount of exporter’s running capital. Exporter can apply for refund only after export of consignment.
Likewise, the exporters make purchases for production of export products at least six months in advance, which is consumed based on export orders causing financial hardships. It is imperative to revive SRO 1125 in its true spirit and reintroduce system of No Payment and No Refund of Sales Tax for the five export-oriented sectors.
Although the government has streamlined the FASTER system, nonetheless, the exporters are facing liquidity crunch amid condition of filing claims only after dispatch of shipment, which takes at least three months.
Consequently, the liquidity is held-up causing financial pressure on exporters.
