Currently, billions of rupees of exporters are stuck up on account of sales tax, customs rebate and income tax refund claims and duty drawback of taxes order under Prime Minister's export package and duty local taxes and levies schemes with the government and delay in payment of these pending refunds causing losses to the largest foreign exchange earning sector through exports.
Tax refunds of the textile exporters have been stuck for a long time for more than a year in most cases and now the government has announced issuance of promissory notes to liquidate these refunds which is a right step in the right direction.
Zahid Mazhar informed that sales tax refunds of over Rs 125 billion belonging to the textile sector are pending with the government and the timely clearance of sales tax refund through promissory notes by the government would boost the business of the textile and allied industries.
He also appreciated FBR's move for issuing instructions to all chief commissioners of LTUs and RTOs to urgently issue refund payment orders (RPOs) of admissible sales tax refund claims before issuance of the first batch or promissory notes (Refund Bonds) by February 14, 2019.
He pointed out that despite of the directives of the finance minister and the FBR there is very slow progress in processing the sales tax refunds and issuance of RPOs which in most of the cases are pending for more than a year.
Chairman APTMA Sindh-Balochistan region has urged the Prime Minister Imran Khan, the Finance Minister and the Chairman FBR to give urgent and special attention on the issuance of Sales tax refund payment orders to clear the pending sales tax refunds of the textile exporters otherwise the liquidity problem being faced by the textile industry would compel them to close operations of their mills which will not only result in decline of exports but would also create law and order situation due to unemployment of large number of workers employed in these industries.