Submission of incremental claims of DDT: PHMA seeks extension in cut-off date

Textile value-added sector has urged the government for extension in cut-off date for submission of incremental claims of duty drawback of taxes for fiscal year 2018-2019 till July 31, 2020.

The Pakistan Hosiery Manufacturers and Exporters Association (PHMA) has written a letter to Abdul Razak Dawood, Advisor to the Prime Minister on Commerce, Textile and Investment, while asking for 50 percent incremental duty drawback on taxes (DDT) claims should also be allowed on achievement of 10 percent increase during 2019-2020 on basis of nine months export performance.

Chaudhry Salamat Ali, Central Chairman PHMA through a letter has state that the Commerce Ministry should consider extension in cut-off date of submission of incremental claims of DDT for the year 2018-2019 from 31st May 2020 to 31st July 2020.

The extension would facilitate and enable textile exporters to submit their claims at convenience without hassle, in view of global business slowdown, lockdown amid the Covid-19.

In the current scenario and unprecedented set of challenges being confronting the textile industry, the government should also consider and facilitate textile exporters by allowing them to submit remaining 50 percent incremental Duty Drawback of Taxes claims under Duty Drawback Order 2018-2021 on achievement of 10 percent increase during financial year 2019-2020 on the basis of nine months' performance as export production remained at a standstill and suffered during a whole quarter due to lockdown amid corona pandemic.

This imperative and favourable move by the government to facilitate textile exporters will boost their confidence to achieve an extra mile beyond enhancement of exports in the succeeding years, the chairman PHMA stated.

He has drawn the adviser's attention towards the Ministry's Notification No 1(42-B)TID/18-TR-II dated 3rd August 2018 for Duty Drawback of Taxes Order 2018-2021 according to which the government provided extension in Prime Minister's Package of Incentives for Exporters in order to provide drawback of taxes collected from textile exporters.

The DDT under the order shall be allowed for shipment made from 1st July 2018 to 30th June 2021, while the cut-off date for filing of claims for exports in each financial year shall be 31st July of the subsequent year.

Salamat Ali apprised that several member exporters approached informing that they have been facing inconvenience, amid economic slowdown and lockdown due to Covid-19, to process and complete the procedural requirements as per Duty Drawback of Taxes Order 2018-2021 to submit their DDT incremental claims for the year 2018-2019 at banks/authorized dealers by cut-off date 31st May 2020, which is approaching very fast.

Due to Covid-19 textile industry of Pakistan has been affected and remained totally closed for a period of around 50 days, and industries resumed operations/productions after special permission from the government.

Ali added that economic slowdown in the wake of the Covid-19 has brought detrimental effects on the textile industry and exports of Pakistan.

The textile export industry has faced colossal financial losses due to cancellation of orders, delayed payments against LCs, disputes as some buyers refused to collect the export shipments at destinations.

The textile industry resumed operations after two months acquiring special permission; nonetheless, supply chain remained disruptive due to closure of allied industry, which provides supplies and materials to smoothly run the wheels of textile export industries. Therefore, the situation and circumstance demand the government to also facilitate textile exporters.

According to Duty Drawback of Taxes Order 2018-2021, the textile exporters are qualified to avail 50 percent of the rate of duty drawback without condition of increment, while remaining 50 percent of the rate of drawback shall be provided, if the exporter achieves an increase of 10 percent or more in export during current financial year as compared to the previous year.