APTMA seeks Razak's help in resolution of issues

The country's textile sector is still crying for resolution of its longstanding issues despite getting assurance at the highest level after meeting with the Army Chief, General Qamar Javed Bajwa. A delegation of All Pakistan Textile Mills Association (APTMA) met with Prime Minister's Advisor on Commerce, Textile, Industries and Production and Investment, Abdul Razak Dawood and sought his help in this regard.

As follow up, Executive Director APTMA, Shahid Sattar has written a letter to the Advisor to Prime Minister, claiming that textile exports had increased by 26 percent in last fiscal year. Last month textile exports had increased by eight percent in quantitative terms and 4.10 percent in value terms.

He has projected around $ 2 to 3 billion increase in textile exports this year if liquidity, energy, and cotton issues are resolved. "We are jeopardizing investment and increase in quantity and price through non- implementation of the agreed energy tariffs, availability of raw material and credit squeeze due to severe issues with the new GST refund system as well as the extremely high rate of 17 percent GST," he added.

Sattar argued that despite passage of 11 months regionally competitive energy tariffs have not been implemented by the Ministry of Energy. "Committed 7.5 cents all-inclusive tariff is not being implemented since July 2019 and additional 25 percent as quarterly adjustment and other charges is being billed," he said, adding that Karachi Electric (KE) was still charging FDI since January 2019 despite clarification.

He stated that factories in the Lasbela Industrial Estate Development Authority (MEDA) are not being extended the facility ab-initio. Retrospective charges are being levied which include element of exchange rate which is by definition already a component of 7.5 cents.

He further stated that $6.5/MMBTU gas is still being billed at $11 by SNGPL with constant threats of disconnection. Industry is still operating on stay orders despite repeated and countless meetings to resolve the issue.

There is still no mechanism for addition of new units for special energy rates representing expansion/ increase in capacity despite passage of five months, he continued.

Talking about sales tax refunds, he said over Rs 100 billion collected over five months as 17 percent sales from the sector, adding that refund system was still not functional. Majority of refund applications are rejected by the system due to Form-H and irrational unannounced boundaries for acceptance in FASTER system. He said even those applicants whose Sales Tax return & Form-H were accepted had not been paid refunds despite assurance of 72 hours.

APTMA further stated that internationally priced availability of cotton and polyester was required to be implemented immediately as the domestic cotton crop had failed and polyester had irrational duty structure. Removal of all duties and sales tax on cotton imports from December 1, 2019 and removal of import and anti-dumping duties on polyester are also required.

He said that Finance Advisors' bold new initiative of enhancing Long Term Financing Facility (LTFF) by Rs 300 billion to facilitate exports may be extended to indirect exporters.