LAHORE - Hundreds of containers of state of the art textile machinery worth hundreds of millions of rupees have been stuck up at Karachi Port, as the Federal Board of Revenue is using delaying tactics to issue the Sales Tax Exemption Notification though it has already been approved by the federal cabinet as well as Economic Coordination Committee of the last government.

Pakistan Hosiery Manufacturers & Exporters Association (PHMA) Central Chairman Dr. Khurram Anwar Khawaja said that the previous government had extended zero-rating facility on sales tax on machinery not manufactured locally and imported by the textile industry registered with Ministry of Textile, as specified in part IV of 5th schedule to the Customs Act 1959, effective from Jan 16, 2017 until June 30, 2018. The federal cabinet as well as the Economic Coordination Committee had also given approval in this regard, he added. But this facility had now expired on June 30 which needs extension through notification, as issuance of the SRO has already been approved.

Dr Khurram urged the caretakers to direct the FBR to immediately notify this facility on import of machinery so that the industry could start its operation at full speed. He also urged the Ministry of Textile Industry to push up the matter with FBR.

Dr Khurram Anwar Khawaja slammed the Federal Board of Revenue for holding up the notification despite an approval by the cabinet and Economic Coordination Committee.

He said that non-issuance of the notification by the FBR has created uncertainty for the textile industry as a large number of machinery are lying dumped at the seaports.

He urged the caretaker government to take serious notice of unnecessary delays and direct the FBR to issue notification.

Chairman PHMA, on this occasion, also congratulated the upcoming government and hoped that it would design a comprehensive strategy with the consultation of business community to boost exports. He said that after a serious decline in exports in the past few years, it had now picked up with the help of DDT under Export Package, which was extended for another three years but its notification regarding duty free import of textile machinery was pending with the caretaker government.

PHMA former chairman Adil Butt also mentioned that Ministry of Textile Industry had unilaterally removed the role of associations as was in the previous notification of DLTL.

Consequently, exporters' claims had been delayed due to mistakes on part of banks during checking and authenticity of claims. He claimed that PHMA is an association of manufacturers and exporters of knitwear apparel products. This year the export of this sector has exceeded $2.7 billion and taken the knitwear and woven garments together, the apparel sector fetched more than $5.3 billion dollars during 2017-18.

He said that extension of Sales Tax Exemption on machinery import was aimed at providing relief and improve overall technological configuration of the textile sector, replacing new machinery with obsolete one and increase overall investment in the industry after renewal of GSP Plus status to Pakistan by the EU.