Home textile makers have sought the federal government help over the absence of any procedure for refund of provincial sales tax on services, saying the tax authority continues to pile up billions of rupees of the cash-starved sector, unreasonably. "Provincial revenue authority has been active and demanding provincial sales tax on services which are not refunded by the FBR as no procedure has been outlined clearly and this is increasing cost of businesses," Central Chairman, Towel Manufacturers' Association of Pakistan, Pervaiz Anwer Sheikh said.
"The refundable amount of sales tax, custom rebate and provincial sales tax amount is now over Rs 350 billion," he said at a dinner reception, the TMA organized in honor of State Minister for Commerce and Textile, Haji Mohammad Akram Ansari last Saturday night.
Showing dissatisfaction over the PM's support package of Rs 180 billion to support the industry, the clamoring textile maker said the government failed to execute its financial program exactly. "Even that has not been implemented in letter and spirit and payments for claims submitted under this scheme are long overdue," he added.
On complications the industry faces from a numerous laws that the different government department execute, he said that "multiple laws are enforced by various government agencies". Nearly, 165 laws are applicable to the industry, which are cumbersome and impractical, triggering cost of business to shoot up, besides tormenting the manufacturers and facilitating corruption in government's departments.
Pervaiz demanded of the government for uniformed rates for the industry across the country. "The rates of gas, electricity, water are payable at different rates within the country and higher than those paid by countries against whom we are selling our products in the international markets," he said, adding that the industry should be provided with electricity at Rs 8 a unit inclusive of all taxes, and gas for Rs 600 MMBTU inclusive of GIDC.
He also complained that the State Bank of Pakistan is not finalizing decision to solve problems of sick industry, while issues regarding the water shortage to the manufacturing units in Sindh are also not being addressed. Similarly, he said that industry in Punjab is faced with gas shortage.
Setting demands, he said "all stuck refunds of Sales Tax, Custom Draw Backs, Old DLTL, TUF and Mark-up Subsidies should be disbursed immediately," and "all cumbersome law and procedures mentioned above be simplified and rules as applicable to EPZ be notified for exporting units".
Haji Akram Ansari in reply assured the textile makers of a complete support to weed out their problems and pledged to raise voice for their demands in the ECC meeting. He asked the TMA to submit a proposal for the PM perusal as soon as possible so that decisions for rejuvenating the industry could be taken without delays.
He appreciated the TMA for its efforts to export home textile products to the world market for fetching much needed foreign exchequer and providing greater employment. He acknowledged that the country's cost of business is higher than those nations competing Pakistan on the world markets. "We need to reduce cost of production, whether it is on government or industry level," he said.
He was of the view that the industry major issues would have been solved, had the PM textile package been implemented in a right manner. He also believed the textile package, if required, should be reviewed to help the industry attain benefits fully from its facilities. He however, declined to facilitate the industry with a direct slashing of power tariffs but promised to help the exporters anyway.
He assured that the textile makers' demands including removing of 10 percent of export growth condition will be brought in discussion with the PM. However, Ansari showed regrets that the industry across the country has failed to ensure R&D activities to take an edge over the competitors, stressing on innovative techniques in the textile industry should be evolved.
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