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Textile exporters unhappy over unsettled FBR claims
May '11
Exporters of the value-added textile sector are facing massive financial crunch as over Rs. 100 billion is stuck up with the Federal Board of Revenue (FBR) against sales tax and R&D claims, according to Syed Usman Ali, Chairman of Towel Manufacturers Association (TMA).

In addition, billions of rupees remain unpaid by the Government against refunds of duty drawback on local taxes and levies (DLTL).

Moreover, incentives that were granted to textile exporters through the strategic Trade Policy Framework 2009-2012 and subsequent announcement of Textile Policy 2009-14, have not yet been implemented in real spirit.

Only 40 percent of the R&D claims of the exporters for 2007-08 have been settled while the balance payments are pending with the State Bank of Pakistan (SBP). Similarly, under DLTL for 2010-11, exporters have been paid only 14.68 percent of their submitted claims in SBP so far.

Mr. Usman Ali also pointed out that the DLTL notification, which is about to expire on June 30, 2011, needs to be extended up to June 30, 2014. It is because; DLTL is a part of Textile Policy which is valid till 2014.

Further, the Ministry of Textiles is yet to announce the procedure for availing incentives under the scheme of one percent additional increase on 15 percent increase in exports, over preceding year's exports in dollar terms. Due to the delay in notification, exporters are unable to continue availing the 2.5 percent rebate on interest on export refinance.

The incentives were only availed by the exporters during the period from September 1, 2009 to February 28, 2010, as circulars have not been issued thereafter.

The Government also needs to settle sales tax and duty drawback claims as huge amount of exporters' funds are lying pending in sales tax and Customs Collectorate.

The TMA has requested the Ministry of Textiles, Ministry of Finance, SBP and FBR to take the above issues seriously and has pleaded for an early settlement of exporters claims.

Fibre2fashion News Desk - India

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