FAISALABAD: Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA) Central Chairman Ijaz Khokhar and Vice Chairman North zone Malik Naseer in a joint statement said value-added textile sector was facing serious financial crisis, because more than Rs 205 billion of value-added textile chain has been stuck up with the government. Federal Board of Revenue (FBR) has still withheld more than Rs 13 billion under Drawback on Local Taxes and Levies (DLTL) claims and about Rs 17 billion sales tax under refund claims, causing immense problems to cash-starved industry.
Khokhar said millions of rupees refunds of ST and Customs rebates payable to the exporters have been held up despite firm assurance by the government that all refunds of the exporters would be cleared by September 2014.
He appealed the government to issue instructions to FBR for speedy releasing of cheques against all the pending Sales Tax refunds and Customs rebate claims. He suggested government to restore ‘No payment no refund’ system for value-added textile sector because collection of 2 percent Sales Tax and then refunding was not only an exercise in futility but involved a large number of FBR personnel and precious time of FBR.
He urged government to allocate the Export Development Fund for Textile Ministry so the Fund could be utilized for development of export, as textile sector’s contribution to EDF stood at Rs 11.5 billion. Country has failed to improve its textile exports despite getting Generalized System of Preferences plus status from European Union.
The textile export fell by six percent last month. India had provided full support to its textile sector, giving financial incentives and discount on the import of machinery so the country could compete with Pakistani goods in the international market, he said.
Naseer said though FBR was releasing cheques against refund payment orders of June 30, 2014 yet the refund claims submitted after June 30, 2014 were pending and major amounts of exporters were pending for last five years and Finance Ministry was not giving instructions for clearance of these old pending claims.
