Non-payment of DLTL: value-added textile sector threatens to move court

The value-added textile exporters have threatened to move court if billions of rupees drawback of local taxes and levies (DLTL) are not paid. Rana Muhammad Mushtaq Khan, Chairman, Value Added Textile Forum along with Muhammad Jawed Bilwani, Chief Co-ordinator, addressing a press conference on Tuesday said textile exporters are facing a serious liquidity crunch and several export oriented units are on the verge of closure because of delay in disbursement of DLTL.
They said that for the first time in the history of Pakistan the most revolutionary textile policy was announced wherein Rs 17 billion were proposed for DLTL for the year 2009-10 and Rs 27 billion for the year 2010-11.
Following the textile policy, the ministry of finance had initially allocated Rs 10 billion for the textiles policy initiatives of which an amount of Rs 5 billion was released to the State Bank of Pakistan for projected quarterly disbursements against DLTL and refund claims of past R&D claims worth Rs 5.4 billion for the first quarter of current fiscal year.
"Against the total amount of DLTL claims of Rs 28.72 billion submitted by exporters to the State Bank only Rs 5.3 billion had been disbursed while the remaining Rs 23.42 billion have not yet been paid which is causing great difficulties to the value added textile exporters," they informed.
They said that former finance minister Shaukat Tarin as well as former minister for textile industry, Rana Muhammad Farooq Saeed Khan had solemnly assured in several meetings that DLTL Scheme would be extended till the expiry of the Textile Policy 2009-2014 so that the textile sector survives.
However, unfortunately, the promises have not been fulfilled and have hurt the confidence of the exporters. It has also been made impossible for exporters to withstand stiff competition in the global market as they are striving to achieve the export target of $25 billion in 2014 set by the ministry of textile, they added. Sudden changes in the government set-up and the appointment of new federal textile minister and federal textile secretary have harmed the textile policy, besides ignoring the stakeholders, they said.
"Since the launching of the textile policy, exports have posted massive increase in two years and if the government fulfils its commitment on drawback, it will also restore the confidence of the textile sector," they added. They pointed out that the government of India has provided subsidy of $438 million under an scheme for upgradation of textile export sector despite the fact that textile export is ranked No 4 in India, while in Pakistan, where textile exports rank No 1 the government has ignored it.
"The Value Added Textile Forum feels that to succeed in the realisation of the objectives of textile policy, it is imperative that the huge amount of pending claims against DLTL are paid to the exporters without delay. The drawback on local taxes and levies should also be extended for another three years to enable exporters to survive and increase their exports and meet the ambitious target of $25 billion in 2014," they said. Senator Ahmed Ali, Mohsin Ayub Mirza, former chairman Pakistan Readymade Garments Manufacturers and Exporters Association, Naqi Bari, Saleem Parekh, Kamran Chandna, Junaid Makda and others also spoke on the occasion.