FAISALABAD -  Payment of sales tax refund claims to the tune of Rs26.43 billion is a long awaited but positive and bold step which will help textile exporters to come out of the liquidity crunch, said Faisalabad Chamber of Commerce & Industry (FCCI) Vice President Ahmed Hassan.

He expressed these remarks while talking to a group of media persons after participating in a special function of FBR in Islamabad in which Finance Minister Ishaq Dar pushed button to pay electronically refund claim of sales tax without any human interaction. The claims of refund will be automatically transferred to the bank accounts of the claimants through electronic transfer by the State Bank of Pakistan (SBP).

Hassan said that government had taken a positive step to exempt five export sectors including textile from refundable taxes including sales tax from July 01, 2016. But despite of this policy decision the sales tax has been charged on electricity, gas and other raw martial consumed by the export sector. He said that the exporters have to run from pillar to post to get back their refund claim. “It is surprising that some time the amount of refund claims cross the limit of Rs400 billion”, he said and added that it means that major investment of exporter is stuck up with the FBR and they have to get fresh bank loans at high mark-up to meet their daily expenditures.

He further said that the additional amount of mark-up has also played an instrumental role in increasing the cost of production that is main cause of decline in textile exports. He also mentioned the status of GSP Plus allowed to Pakistan by EU, adding that despite of this facility exports are still dip nosed.

However, he expressed satisfaction on the recent step taken by the federal government to pay the refund claim in two phases. In first phase, the claims up to Rs1 million up to July 15 were paid and now the payments of refund claims above Rs1 million have been started.

He told that 10439 Refund Payment Orders (RPO) are being paid through electronic payment system and this amount will be directly transferred to their bank accounts. Appreciating the payment of refund claim, he urged the government to carve out a well designed system in which the refund claims are automatically paid without any undue delay. He also mentioned Rs180 billion export package and said that this was announced to facilitate the textile sector which was passing through deep crisis.

He was also critical of the fact that out of this huge package only Rs3.5 billion has so far been released and thus, this package failed to pass on requisite relief to the textile sector.

He said that government should also expedite payment under this package so that the declining trend in textile export could be checked.

Hassan also thanked FBR Chairman Tariq Manhood Pasha for taking keen interest in the payment of refund claims. He also invited him to visit FCCI at an early date to discuss the tax-related issues including expansion in tax net.

 

 

 

 

 

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