Pending refund claims amount to Rs 200 billion as per the Federal Board of Revenue (FBR) and Rs 250 billion according to exporters. FBR sources told Business Recorder that pending refund claims include: (i) sales tax refund claims including deferred claims of around Rs 125-130 billion including deferred claims, (ii) customs duty drawback of around Rs 20 billion, and (iii) income tax refund claims of Rs 50 billion.
The outstanding refunds of Rs 200 billion are subsequent to refund payments issued during 2017-18 amounting to Rs 100 billion; in 2016/17 total refund payments issued were Rs 54 billion reflecting an increase of Rs 46 billion between the two years.
Exporters, including textile associations stated that their pending refund claims are around Rs 250 billion and not Rs 200 billion - customs rebate claims are approximately Rs 50 billion and sales tax refund claims including deferred claims total approximately Rs 200 billion according to their estimates.
Exporters told the BR that the previous government repeatedly assured them of early release of refund claims but never fulfilled their commitment, which created severe liquidity problems for them disabling them from investing in capacity enhancement and products diversification.
All Pakistan Textile Mills Association (APMTA) Group leader Gohar Ijaz stated that as far as the textile sector is concerned, over Rs 50 billion sales tax claims and Rs 50 billion customs rebate and duty drawback on local taxes (DLTL) of textile sector are pending.
"We had been asking the previous government to clear the refunds payment orders (RPOs) that were issued by the FBR's field formations but to no avail. The previous government never cleared rebate on exports that it announced as part of the textile package for one and half years which led to liquidity problems for the textile sector. The PML-N government simply failed to fulfill its commitments," Ijaz added.
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