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Chairman, Pakistan Apparel Forum Muhammad Jawed Bilwani has said that the government has failed to refund sales tax claims, under FASTER System, of textile exporters as per commitment to refund claim amount in 72 hours, contrarily the govt has not paid exporters' claims for the last seven months.

Therefore, Textile Export Oriented Sector demands the government to clear all pending refund payments of exporters forthwith and restore zero rating of sales tax - no payment no refund regime in the national interest.

He said that reportedly hundreds of exporters and SMEs have stopped their production owing to liquidity problems. Those who have not received their sales tax refund claims for last seven months shall be compelled for closure if their sales tax refunds are not released on immediate basis to facilitate them to get new orders and resume production. In the next 2-3 months approximately 8 percent textile exports may face decline, the small and medium export industries are in total dire straits and demand immediate attention of the government for their survival, lamented Jawed Bilwani.

Bilwani articulated that the government rescinded SRO 1125 and discontinued zero rating status from export oriented sectors including textile and imposed 17 percent sales tax with a plan target in Budget 2019-20 to collect Rs 185 billion from the local market for the whole fiscal year. Government claimed that local textile sales is around Rs 1200 billion per annum. However, government collected only Rs 23.6 billion in the first five months (Jul-Nov 2019) through domestic front after withdrawal of sales tax zero rating for export oriented sectors and deployed FBR officials on futile exercise to first collect sales tax and which was required to be refunded but in vain.

The current economic indicators are also not favourable as no growth in GDP and exports is witnessed during last fiscal year and inflation is out of control. While the interest rate has also increased.-PR

Copyright Business Recorder, 2020

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