Release of refunds urged: PTEA chief says cash crunch adversely impacting industry

Pakistan Textile Exporters Association (PTEA) has stressed the government to act decisively and rescue the textiles industry from financial crisis as worst ever cash flow crunch has brought the industry to the verge of disaster. Despite the record revenue collection of Rs 2.1 trillion in nine months, non-payment of exporter's outstanding refunds is unjustified.
Commenting over the prevailing serious situation, here on Wednesday, PTEA Chairman Asghar Ali said the government, on the one hand, is claiming record revenue collection in running fiscal year while on the other hand exporter's refunds amounting to Rs 30 to 40 billion are still unpaid on account of sales tax, duty drawback and income tax refund claims creating severe cash flow crunch. The government at many times gave firm assurances for payment of refunds but failed to keep its promises of releasing the stuck refunds. The FBR, under the law, is bound to release refunds within 45 days but there are delayed refunds for the years, he said. In many cases, refund processing orders, which are to be honoured in a certain time, had been issued but cheques are not issued for a year. He said that textile exporters are badly deprived of liquidity while the government is reflecting the stuck-up refund amounts in its revenue account which is not a fair practice. On the other hand, the FBR is illegally favouring some influential exporters by issuing out of turn cheques of billions against their refund claims violating the policy which is a clear favouritism and discrimination. We are failed to understand that why exporter's refund claims are withheld depriving the exporters from their basic working capital. The issue is being taken up by PTEA at various forums but Government does not understand the gravity of the matter and no remedial measures are taken to ratify the situation, he added.
The PTEA Chairman was of the view that no doubt, the textile industry has become partially operational with the availability of RLNG but non-payment of outstanding refunds is yet proving a major stumbling block in smooth running of the industry. Textile industry is unable to utilise resources due to liquidity shortage now, he added. Finance is imperative to run the wheels of industry; whereas major portion of finance has been blocked in refund cycle. The government owes billions of rupees to the textile industry; on the other hand, the industry has been compelled to borrow from banks. Lack of basic working capital has been a cause of serious concern for exporters and they are facing embarrassment and humiliation from their suppliers for being unable to pay them due to severe liquidity crunch in lieu of non-payment of refunds, he added.
The FBR is hampering the growth of the most productive textile industry by denying the exporters and manufacturers their right of refund, he said and added that Government should take realistic view of the matter and release the long outstanding refunds at the earliest. PTEA Chairman demanded the government to take stock of the situation and step forward to save the largest export earning industry by immediate release of unsettled refunds across the board without any discrimination and favouritism to save the industry from bankruptcy.