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Pak releases Rs 6.2 bn as cash subsidy for textile sector

Jun '20
Pic: Shutterstock
Pic: Shutterstock
Pakistan has released Rs 6.2 billion for the textile sector as cash subsidy under the PM’s Export Enhancement Package. This takes the total disbursements to the textile and non-textile sector to Rs 53.2 billion during the last three quarters. Commerce adviser Abdul Razak Dawood said the amount will help textile exporters deal with their liquidity issues.

For the non-textile sector, the adviser said the payment under drawback of local taxes and levies (DLTL) is under preparation. Rs 51.2 billion was released to the textile and clothing sectors between July last year and May this year under the DLTL with the last tranche of Rs 6 billion despatched on April 6.

Under the package, the government had extended cash subsidy at the rate of 4 per cent for garments exports, 3 per cent on home textiles, and 2 per cent on processed fabric. Half of the cash subsidy is linked with 10 per cent growth proceeds from the previous year.

This amount paid as DLTL is in addition to the Federal Board of Revenue (FBR) disbursements of sales tax refunds and customs rebates. Under the PM Covid-19 Package, another Rs 45 billion has already been released to export-oriented sectors, according to Pakistani media reports.

Currently, the leather, footwear, carpets, sports, surgical instruments, and some machinery manufacturers are benefiting from the cash subsidies.

Fibre2Fashion News Desk (DS)

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