MoF sitting tight over outstanding Rs 10 billion DLTL fund

The Ministry of Finance is sitting tight over the whopping Rs 10 billion outstanding Drawback of Local Levies and Taxes (DLTL) to exporters of textile goods. The issue was raised at the meeting on 'Textile Policy, Textile Law, Technical Up-gradation Fund (TUF) Scheme & Disbursement on Textile Policy Initiatives', held in Islamabad on October 12.
Towel Manufacturers' Association of Pakistan (TMA) was represented by TMA Chairman Feroze Alam Lari and former chairman Muzammail Husain. According to details available here on Saturday, initially the textile policy was reviewed in the meeting. The meeting was informed that the Ministry of Textile Industry (Mintex) could not pressurise the Ministry of Finance to get the DLTL funds released.
It also surfaced that out of a total of DLTL Rs 10 billion, the Finance Ministry could release just Rs 1 billion to the State Bank of Pakistan. Disbursement against DLTL could not be made for want of more funds from Finance Ministry to clear the entire backlog.
The Ministry of Textile Industry Secretary, during the meeting, telephoned the Ministry of Finance Secretary for releasing the balance money. He was assured of further release of about Rs 2 billion to Rs 3 billion to the State Bank of Pakistan within a week for DLTL payments to exporters on pro rata basis.
Participants insisted on the proposal that DLTL, being part of textile policy, be continued till the end of textile policy 2014. A working paper on indirect taxes and levies was presented by TMA during the meeting, showing that towel exporters were paying about 11.5 percent indirect taxes and, in lieu thereof, receiving only 2 percent.
Revised tax laws 2011 were presented in the meeting wherein a number of articles and clauses were found hurting the textile industry. It was, therefore, decided to keep it pending for the next four week, till October 29, with the request to participants to put forth their inputs and feedback within this time. After receiving inputs from the stakeholders, another meeting would be called to discuss the framework of the policy and its early issuance.
Technical Upgradation Fund (TUF) scheme, at a glance appearing to be a replica of India's TUF scheme, was shown to the participants wherein all sectors of textile industry were not taken into consideration. Accordingly, it was decided that each sector of industry would submit its viewpoints on the subject to the ministry for further discussion in the next meeting.
The meeting was convened by the Secretary, Ministry of Textile Industry, and was attended by CEO of Engineering Development Board (EDB), Ministry of Textile Industry officials, Dean, National Textile University, Dean, Synthetic Fibre Development and Application Centre, chairmen of different textile and allied industries' associations and other stakeholders.