APBUMA demands deferring implementation of new ST/FE return

The Chairman of All Pakistan Bedsheet and Upholstery Manufacturers Association (APBUMA), Jalaluddin Roomi, has said that applicability of new sales tax and federal excise return should be deferred. Notification envisages application of amended return 2011.
Addressing an iftar party here on Tuesday he said that changes such as requirement of CNIC, HS Code, monthly closing, stock reconciliation, if needed, should only be applicable from next tax period after amendment is made in consultation with stakeholders. He said that the government had announced the textile policy for five years while trade policy was introduced for three years, but now the government is negating these policies by withdrawing the facilities, incentives, concessions given in these policies.
Roomi said that textile millers had deposited the claims of Rs 15.613 billion, but the ministry of finance released Rs 4 billion to the State Bank. He said that over Rs 100 billion of the value-added sector were held up against sales tax claims and research and development (R&D) rebate. The government owed billions of rupees on account of refund of drawback of local taxes and levies (DLTL) due to which exporters are facing serious financial crunch.
"No budget or trade policy can be effective or economy comes out of red unless and until the government clears these dues", Usman declared. He said that according to the strategic trade policy framework 2009-12 and subsequent announcement of Textile Policy 2009-14, several incentives were granted to textile exporters but the same have not yet been implemented in real spirit. Under R&D rebate only 40 percent claims were settled for the year 2007-08, while the balance payments of 60 percent were pending with the State Bank.
Under the head of DLTL (drawback of local taxes and levies), exporters have been paid only 14.68 percent of their claims submitted with the SBP in the last financial year, while balance is still pending. The DLTL notification is about to expire on June 30, 2012 whereas the Textile Policy is valid till 2014. Hence, the notification needs to be extended, the TMA chairman demanded. He said that under the scheme of one percent additional increase over 15 percent increase in exports over preceding year's exports in dollar terms the procedure of availing incentives has not yet been announced by the ministry of textile industry in spite of several reminders.
Roomi said that exporters have availed these incentives only for the period from September 1, 2009 to February 28, 2010, while circulars after that have not been issued. He further drew the government's attention towards settlement of sales tax and duty drawback claims withholding huge amount of exporters' funds with the sales tax and customs departments.
APBUMA firmly believes that any cumbersome or superfluous changes in sales tax & federal excise return shall not only increase cost of doing business but will also result in decreasing sales volume and consequently sales tax collection by FBR. Over 60 percent revenue collection made by FBR is through indirect taxes and sales tax constitutes a major fraction.
He assured KCCI members, business, trade community that KCCI is actively pursuing sales tax return issue and is in close liaison with FBR officials to rectify all problems. Extension in filing of return and depositing sales tax liability has been granted by FBR. The value-added textile sector has demanded of the government to arrange payment of billions of rupees of exporters, which remained stuck up with the Federal Board of Revenue under various heads.
Chairman of All Pakistan Bed Sheet and Upholstery Manufacturers Association said that there was 30 percent increase in exports revenue than the target set in the textile sector. He expressed satisfaction that the country earned another three billion dollars due to exports in the textile sector. He clarified that billions of rupees income in the textile sector was due to increase in prices at international level.