The Ministry of Textile Industry has allowed drawback facility of local taxes and levies to the textile units located in the Export Processing Zones (EPZs), it is learnt reliably.
The Ministry lifted the ban imposed in December 2009 on the disbursement against claims of the textile units located in EPZs and directed the State Bank of Pakistan to take further necessary actions, well-placed sources in the Textile Ministry revealed.
The ministry had announced drawback of local taxes and levies scheme last year for proper implementation of the initiatives announced in the textile policy 2009-14. Through the said scheme, the textile units, exporting fabrics, garments and home-made textile were given the facility to claim refund against the payments of domestic taxes on the contingencies of exports.
According to the textile policy 2009-14, textile manufacturers will receive three percent drawback on garments, two percent on home-made textile and one percent on fabrics. All the textiles units in Pakistan including those located within the EPZs were entitled to the facility as per original notification of the scheme dated September 1, 2009.
However, due to the concerns shown by the textile industrialists, the ministry was compelled to withhold the payments against the claims of EPZs units in December 2009. The industrialists were of the view that such units were already enjoying extra facilities including exemption from gas/electricity load shedding, tax holidays, proper infrastructure etc, hence extending the drawback facility to them seems inappropriate.
The issue was hotly debated last year and the ministry constituted a sub-committee under the chairmanship of Zubair Motiwala, Advisor to the Chief Minister Sindh, and other prominent textile industrialist to thoroughly examine the issue and come up with viable recommendations. The recommendations were deliberated upon in the recent meeting of the Textile Policy Implementation Liaison Committee (TPILC) held in the textile ministry. On the recommendations of the TPILC, the ministry has lifted the ban imposed on the disbursement against the drawback claims of EPZs units.
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