Pakistan Apparel Forum (PAF) on Monday asked the federal government to pay long-running refunds amounting Rs 127 billion to the textile sector at once to end the industry's financial crisis to augment production. PAF Chairman Javed Bilwani said this at a press conference at Pakistan Hosiery Manufactures and Exporters' Association (PHMA) House here on Monday.
The outstanding dues of entire textile sector pending with the federal government under the heads of drawback on local taxes and levies (DLTL), Sales tax, withholding tax, and custom rebates and duty drawbacks on taxes (DDT) have accumulated around Rs 127.35 billion, including Rs 61.02 billion of the apparel sector.
The government has vowed to clear the outstanding amount through cash and bounds. However, we are requesting it to ensure the payments once to end the financial crisis and to enhance exports.
"If the government makes payments at once, the textile sector would contribute an additional tax of around Rs 80 to 90 billion to the national exchequer, besides enhancing exports and creating a number of jobs which is the manifestation of the PTI." he said.
The apparel sector exporters are predominated by medium and small units who deals with hand on cash, instead taking loans from the banks. If there is cash available with them, they can purchase raw material, and will be able to compete the world.
The State Bank has to pay Rs 81 billion as DLTL to textile exporters including Rs 37 billion to apparel sector, he said.
On custom rebates, he said that the Member Custom had assured exporters to clear all outstanding rebates till December 2018 but to no avails, as Rs 11 billion are still pending for the last nine months.
Federal government had earmarked some Rs 10 billion on account of DLTL in the annual budget 2018-19. But, only Rs 1 billion has so far been released. If the remaining Rs 9 billion are disbursed with immediate effect, this would provide oxygen to the textile sector.
He said that Release Payment Orders (RPOs) of around Rs 15 to 16 billion are ready. We request the government to disburse them as soon as possible, so that the payments can be made within the first week of January 2018.