The implementation of Prime Minister''s incentives package for exporters is in limbo as the government has so far released only Rs 2.99 billion to textile sector for duty drawbacks on local taxes against the verified claims of Rs 12 billion submitted by exporters. Prime Minister Nawaz Sharif announced a package worth Rs 180 billion on January 10, 2017 in a bid to boost the country''s falling exports. The incentives were notified on January 23 last for textile sector, but the duty drawbacks were allowed for export goods declarations (GDs) filed on or after January 16, 2017 to June 30, 2017.
The textile ministry official said that the package for exporters has partially been withdrawn including exemption of customs duty and sales tax on import of cotton; however, duty drawback of taxes, withdrawal of customs duty on manmade fibers other than polyester and zero rating of textile machinery are continued. The official revealed that Rs 2.99 billion have been paid so far under duty drawback of taxes regarding the package. Substantial claims will be received in the coming months, the official said.
Talking to Business Recorder, Secretary Ministry of Textile Industry Hassan Iqbal said that Finance Ministry has completed codal formalities for release of additional Rs 4 billion to the State Bank of Pakistan (SBP) against the exporter''s claims. However, the exporters expressed serious concerns over meager releases, saying that the government seems uninterested in implementation of the package.
The secretary textile said that Rs 40 billion would be disbursed among the exporters in the current fiscal year under the package. Officials said that under the Rs 180 billion package for exporters, Rs 140 billion would be given to exporters in cash while Rs 40 billion would be given in shape of tax exemptions. It was further revealed that Rs 15.5 billion have been earmarked for the implementation of the package in the budget 2017-18, however the government would release more money if exporters'' claims exceed.
The finance minister has given the commitment in cabinet meeting that amount releases against exporters'' claims would be ensured. According to the Federal Board of Revenue (FBR) documents, around Rs 45 billion, including Rs 12.912 billion deferred sales tax, Rs 13.76 billion fresh sales tax and Rs 17.92 billion RPOs of textile sector are pending. Refunds of Rs 15.2 billion sales tax are expected to be paid by August 14, 2017.
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