Exports Committee Chairman of Federation of Pakistan Chambers of Commerce & Industry (FPCCI), Azhar Majeed Sheikh has demanded duty drawback payment against exports, stuck up at Care System Model Collectorate for the years 2007 and 2008.
In a presentation to FPCCI president he stated that there is only less than one percent drawback on value added textiles, which was committed to be refunded within 72 hours of the export for consignments from Care system. Even exports under Care, payments are pending for the years 2007 and 2008. When there is no objection, then the model collectorate says that finance ministry has stopped payment due to shortage of funds.
The exporters are already in big mess due to these sales tax/duties and other taxes refund issues. They are paying non-refundable amount, which runs into millions. He requested the FPCCI chief that the Collector Model Customs Collectorate (Care) may please be advised to release duty drawback payments to all exporters immediately and also ensure that duty drawback payments should be paid within 72 hours, as announced.
Yet, another irritant for exporters, he said is that export industry is claiming about 1.5-2 percent sales tax refund on packing material and certain dyes and chemicals. They have to go from pillar to post to collect this refund (consuming 6 months-12 months). The export industry has proposed that they can live with one-percent refund of total export as sales tax drawback immediately on realisation of proceeds. The government can save its collection cost, which may be equal or more than refunded amount.
Criticising the protective and regulatory levies on exports, he pointed out that protection is being given to local industry at the cost of export industry. Some glaring examples of heavy protection duties are 1) Polyester Fibre, 2) Printing Screen, and 3) Caustic Soda, and the export industry cannot sustain local protection. Recently, regulatory duty of 10 percent has been imposed on basic raw material (Thickner) which constitutes about 60 percent of our processing cost.
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