Textile businessmen in Pakistan recently urged restoration of the zero-rating facility for the sector if billions of rupees in sales tax refunds cannot be released. Pakistan Hosiery Manufactures & Exporters Association (PHMA) Central Chairman Haji Salamat Ali said the pending tax refund claims of exporters for July-August 2019 should be immediately released.
As the textile industry is badly affected by liquidity crunch, Ali criticised the Federal Board of Revenue (FBR) for not releasing the refund amounts to exporters despite promises. FBR Chairman Shabbar Zaidi had been reminded through a letter about the commitment the board had made to the exporters that refunds would be made within 72 hours of filing of claims. The exporters are also facing difficulties in filing tax refund claims (Annexure-H) under the new FASTER system, according to reports.
Faisalabad Chamber of Commerce and Industry Senior Vice President Zafar Iqbal Sarwar said Rs. 80 bn are regular claims pertaining to July 2019 to October 2019. Another Rs. 10 bn and Rs. 30 bn are pending respectively under section 66 (Pending since 2014) and deferred since 2012, he said. On other pending refunds include Rs. 15 bn from the head of duty drawback, Rs. 19 bn from income tax, Rs. 15 bn from income tax credit and Rs. 5 bn from the head of provincial sales tax, he added.
Chairman of All Pakistan Textile Processing Mills Association (APTPMA) Muhammad Pervez Lala suggested reduction in the sales tax rate from 17 per cent to 5 per cent to save the sector from total collapse.
