LAHORE - The export-oriented value-added textile industry, which has been awaiting the release of refund claims of around Rs 4.6 billion pending for the last two years, has decided to move the court if their funds were not released immediately.
Pakistan Readymade Garment Manufacturers and Exporters Association (PRGMEA) chief coordinator Ijaz Khokhar on Monday asked the finance minister Ishaq Dar to personally intervene and play the role in early processing of exporters claims otherwise they would approach the courts against the illogical circular of the State Bank of Pakistan. He said that the State Bank of Pakistan revised the calculation method in DLTL Scheme at a time when full payment is due and exporters have submitted their final claims after a lengthy process of paperwork.
If the finance ministry does not intervene in the matter the whole fund of Rs 4.6 billion under DLTL Growth Scheme may be lapsed due to undue delay in payment.
“If SBP considers this new method necessary it should be implemented from next financial year and the central bank should intimate the exporters in the beginning not at the end of the year.”
PRGMEA Chief Coordinator Ijaz Khokhar said the Association has also sent a letter to the National Standing Committee on Textile chairman Khawaja Ghulam Rasool Koreja to raise the issue of financial crunch faced by the apparel sector. Mr Koreja has fixed the meeting with PRGMEA to deliberate all issues of textile industry.
He said that the finance minister Ishaq Dar had committed in his budget 2015-16 speech for refunds of claims of Drawback of Local Taxes and Levy (DLTL) to the exporters but the recent circular of the SBP gives impression that it would not seem to be materialized like several other commitments of the government.
Ijaz Khokhar said that revision in method of calculating DLTL claims will require additional paper work, fresh certificates/undertaking and re-verification of the claims already verified by the ministry of textiles. He said that it would delay the processing of claims and add to the financial burden on the value added sector.
“The claims already submitted under notification dated 22 October 2014, should be acceptable as the export realization in rupee has been calculated on daily closing rates published by the State Bank. We don’t see the need to submit the claims, as all data pertaining to exports in foreign currencies is already available with the SBP. The conversion of claims in USD can easily be done by the verifying authority at the time of verification.”
PRGMEA chief coordinator observed that new method will result in unnecessary reprocessing and re-scrutiny of claims at all levels, wasting precious times.
Keeping in view the declining trend in exports and blockage of precious working capital under various schemes, this action will further deteriorate the situation for the value added exporters, he added.
He said that the country’s exports have been declining sharply during the last nine months (July-March) of 2016 and the government needs to take preventive measures to enhance exports.