Huge amount of liquidity of the exporters of the value-added textile sector is still blocked with the FBR causing immense problems to the cash-starved and struggling exporters, stated Babar Khan, Chairman, Pakistan Hosiery Manufacturers & Exporters Association, Southern Zone.
He said millions of rupees refunds of sales tax and Customs rebates payable to the exporters had been held up despite firm assurance by the Finance Minister Muhammad Ishaq Dar in his budget speech that by September 30, all refunds of the exporters would be cleared. However, it is learnt that FBR has released cheques against RPO's of Jun 30, 2014. All the fresh refund claim submitted after Jun 30, 2014 are pending.
It has also been learnt that Finance Ministry has issued instruction to FBR for processing of only fresh refund claims submitted up to Jun 30. The major amount of the exporters accumulated from last five to six years on account of deferred payment held due to problem in electronic cross verification. No instructions were issued for clearance of these old pending claims.
Babar said previous government issued RPOs (Refund Payment Orders) after which the payment were cleared speedily but now despite issue of RPOs since almost 4-5 months no cheques were being released which was indeed most alarming and reflected financial weakness of the government.
He further lamented that value-added textile exporters were battling hard for their survival in the global market in the face of severe competition from neighbouring and other competing countries and also struggling to meet their export commitments despite most adverse factors here and that severest ever liquidity crunch would lead to disastrous consequences for the exports of nation.
He fervently appealed to the Finance Minister to issue immediate instructions to the FBR for speedily releasing cheques against all the pending sales tax refunds and customs rebate claims to save the exports of nation from complete ruin. He also proposed that the government should revert to the "No Payment No Refund" regime for the textile export sector just because exports are a great source for earning valuable foreign exchange for any nation as the collection of two percent sales tax and then refunding is not only an exercise in futility but involves large number of FBR personnel and precious time of FBR which can otherwise be utilised to bring more and more persons in the tax net to increase revenue for the FBR.-PR
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