ISLAMABAD - New elected government would face a financial burden of around Rs250 billion despite the fact that partial payments were made under Rs180 billion Prime Minister Incentive Package for textile exports and around Rs150 billion recent extension.
The outgoing government in its last days approved additional three year package of around Rs50 billion for providing cash support and slashing down electricity tariff for boosting the country's exports during next three years, in addition to Rs180 billion Prime Minister Incentive Package for export sector.
Out of Rs180 billion Rs20 billion were for non textile, while Rs40 billion were allocated for revenue loss, and remaining Rs120 billion were for two and half years.
Since January 2017 to 30 June 2017, claims of Rs37billion and Rs27billion have been paid.
In phase two there are two parts, each comprising of Rs40 billion amount. First part is without condition while second part is associated with 10 percent growth.
The unconditional claims are expected to be filed in next six months while remaining, if applicable, may be filed during next one and half year.
For unconditional part, around Rs12 billion claims have been received and Rs3 billion have been paid, while remaining is pending.
Due to lengthy procedure of exports, the exporters may take time to apply for tax refunds.
If the exporters achieve 10 percent growth criteria, around Rs70-80 billion claims are expected out of the previous package", said a highly placed source.
Under the previous package, the duty drawback rates for textile garments were 7percent; textile made-ups 6 percent; processed fabric 5 percent; yarn and grey fabric 4 percent; while sports goods, leather and footwear were reduced to 7percent tax. In new incentive certain lines have been revised.
In addition to previous package, the new government would have to pay for the new package, which includes cash incentive of Rs41 billion, Rs10billion electricity support for industry, Rs12 billion for zero-rating packaging material and Rs2billion import duty waiver, on 255 tariff lines of raw material.
All Pakistan Textile Mills Association (APTMA) has been demanding government to implement Rs180 billion in letter and spirit to bail out the domestic textile industry and to enhance the country's declining exports.