Pakistan Hosiery Manufacturers Association has asked the central bank to issue procedure's detail for applying drawback claims under revised PM export package, as the SBP has not yet formulated the process of application for Drawback of Duty and Taxes (DDT). PHMA Chairman Dr Khurram Anwar Khawaja said that the ECC had approved the revised PM package for exporters in early October and the textile ministry had notified this immediately but almost one and half months lapse no detailed circular was issued by the central bank regarding procedure of Drawback of Duty and Taxes (DDT).
In a statement issued here on Tuesday he asked the government to provide complete and 100 per cent drawback rate of incentive to the eligible value-added textile exporters on shipment basis as promised by the authorities, abolishing the condition of 10 per cent or more increase in exports. Dr Khurram also asked the government to clear all the pending claims on immediate basis, as huge drawback claim amount of exporters in previous Duty Drawback of Taxes Order 2017 is still pending with the government while New Order 2017-18 has been issued for which the procedure from SBP is still awaited.
He said that the government previously assured that complete 100 per cent drawback rate of incentive for eligible textile sectors on the same terms as for the period from January 1 to June 30, 2017 without condition of increment would be provided for the period from July 1, 2017 to June 30, 2018. However, the relevant notification, issued by the government, says that 50 percent of the rate of drawback shall be provided without condition of increment and remaining 50 percent of the rate of drawback shall be provided, if the exporter achieves an increase of 10 per cent or more in exports during performance year (FY 2017-18), as compared to the base year (FY2016-17).
While giving recommendations to further improve the disbursement mechanism in duty drawback of taxes scheme, he proposed that the incentive amount should directly be credited to the exporters account at the time of realization of export proceeds and SBP may subsequently claim the amount from the government. "The condition of "after receipt" should be abolished and prompt payment should be made. Otherwise, again backlog of payments to be made to exporters will be created as previous payments of billions of rupees have not yet been made to the exporters because the finance ministry has not disbursed the payments yet to SBP under the relevant head of account."
He further said that billions of rupees against previous Drawback of Local Taxes & Levies (DLTL) Order 2009 since 2011; Incremental DLTL Order 2014-15 since June 2015; Incremental DLTL Order 2015-16 since April 2016; Incremental DLTL Order 2016-17 since April 2017 and DDT under PM export package 2017 of exporters are pending with government causing liquidity problems to the exporters in keeping up their export commitment, which must be released immediately to streamline cash flow. He said that it would lead to enhancement of the exports at the desired target of the government resulting in increase in foreign exchange earnings, generation of new employment and reduction in trade deficit.
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