According to a letter sent to Prime Minister by Central Chairman PHMA Muhammad Jawed Bilwani, there is an excessive delay in payment of sales tax refund to export oriented units processed through FBR faster system.
During the last meeting with FBR officials held on 16 September, 2019 and subsequent discussions thereon in respect to Sales Tax claims of export oriented industries, whereby the PHMA was assured that as per the government's policies and sales tax refunds through faster system will be paid within 72 hours of filing of refund claims. However, FBR has not fulfilled its commitment and not a single rupee in shape of sales tax refund has been paid to textile exporters. Despite submission of sales tax returns and "Annexure H" which was duly approved and RPOs issued by FBR 12 days before to-date, still refunds have not credited to exporters accounts by the SBP after lapse of 288 hours, Bilwani said in letter.
In addition during a meeting with the stakeholders of Five Zero-Rated Export Sectors in July at Governor House, Karachi wherein economic team also present in the meeting comprising of Dr Abdul Hafeez Shaikh, Advisor to PM on Finance, Hammad Azhar, Federal Minister on Economic Affairs, Abdul Razak Dawood Advisor to PM on Commerce & Textile, Shabbar Zaidi Chairman FBR and Zubair Gilani Chairman, Board of Investment, it was informed that sales tax refund claims payments will be made on fast track.
A number of exporters are also complaining that their huge liquidity is already stuck as a result of outstanding payments against sales tax refunds and they have been facing severest financial hardships and are unable to procure / purchase materials for manufacturing goods meant for exports.
The exporters being highly annoyed and dissatisfied have conveyed that if such excessive delays in respect to processing and payment against sales tax refunds further continues their entire liquidity shall be stuck up which will cause disruption in production and ultimately affect the export orders resulting to cancellation. Consequently, the industries shall be compelled for closure, he added.
He informed that textile exporters are facing crucial issue of delays in payment of refund to export oriented units. In the pre-budget meetings before abolishing zero rating regimes, government claimed that Sales Tax refunds will be paid immediately after submission of GD. After the budget, government introduced automated faster system in which refunds were supposed to be processed and cleared within 72 hours. There is a great sense of uncertainty and unrest prevailing in the exporters who are of the view that the government has failed to honor commitment to release sales tax refunds through faster system; and their confidence have been shaken, Bilwani said in letter.