LAHORE - The Pakistan Hosiery Manufacturers Association (PHMA) has asked the State Bank of Pakistan (SBP) to issue procedure’s detail for applying drawback claims under revised PM export package, as the SBP has not yet formulated the process of application for Drawback of Duty and Taxes (DDT).

PHMA Chairman Dr Khurram Anwar Khawaja said that the Economic Coordination Committee (ECC) had approved the revised PM package for exporters in early October and the textile ministry had notified this immediately but almost one and half month lapse no detailed circular was issued by the central bank regarding procedure of DDT.

He also asked the government to provide complete and 100 percent drawback rate of incentive to the eligible value-added textile exporters on shipment basis as promised by the authorities, abolishing the condition of 10 percent or more increase in exports.

Dr Khurram asked the government to clear all the pending claims on immediate basis, as huge drawback claim amount of exporters in previous Duty Drawback of Taxes Order 2017 is still pending with the government while New Order 2017-18 has been issued for which the procedure from SBP is still awaited. He said that the government previously assured that complete 100 percent drawback rate of incentive for eligible textile sectors on the same terms as for the period from January 1 to June 30, 2017 without condition of increment would be provided for the period from July 1, 2017 to June 30, 2018.

However, the relevant notification, issued by the government, says that 50 percent of the rate of drawback shall be provided without condition of increment and remaining 50 percent of the rate of drawback shall be provided, if the exporter achieves an increase of 10 percent or more in exports during performance year (FY 2017-18), as compared to the base year (FY2016-17).

While giving recommendations to further improve the disbursement mechanism in duty drawback of taxes scheme, he proposed that the incentive amount should be directly credited to the exporters account at the time of realisation of export proceeds and SBP may subsequently claim the amount from the government. “The condition of “after receipt” should be abolished and prompt payment should be made.

Otherwise, again backlog of payments to be made to exporters will be created as previous payments of billions of rupees have not yet been made to the exporters because the finance ministry has still not disbursed the payments to SBP under relevant head of account,” he said.