Textile sector dissatisfied with budget

Textile sector has shown dissatisfaction over the budget for 2018-19, saying that its proposals/demands including abolishment of Export Development Surcharge, disbursement of exporters' refunds and reduction in tariff of electricity and gas were not accommodated.
Talking to Business Recorder here on Saturday, representatives of different textile associations urged the government to implement the Prime Minister Incentive's Package for Exporters in letter and spirit, besides ensuring early release of refunds claims.
Jawed Bilwani, Chairman Pakistan Apparel Forum and Chief Coordinator Value-Added Textiles Associations, expressed dissatisfaction over the federal budget 2018-19, saying the budget focused general industry & trade while export sector was neglected. Continuation of zero-rating regime was appreciable; however, the exporters' demand to transform regulatory mechanism from SRO to Act is still awaited.
The export sector is the lifeline to uplift economy but remains a low priority area because of non-commitment, non-seriousness and unwillingness to release refund claims of billion of rupees on part of the government, he claimed.
Exporters' problems will multiply owing to liquidity crunch and as a result, trade deficit will further widen from $27.3 billion, Bilwani pointed out. Bilwani was of the view that to achieve a milestone, major breakthrough and unsurpassed exports, it is crucial to immediately release the duty drawback claims under the PM package and long withheld refunds; otherwise, the situation already heading towards alarming scenario may turn into a disaster.
He said that in this budget, once again, hopes and assurances were given but there was no firm commitment. Pakistan Muslim League-Nawaz (PML-N) government gave export package of Rs 180 billion and only Rs 21.5 billion were released to-date. The Prime Minister, earlier, gave assurance to release all pending refunds and rebates by February 15, 2018, which again turned eyewash. Rather than making any firm commitment and giving one date, again a new ambiguous timeline of July 01, 2018 was given to clear refunds in phases in next 12 months whereby the sitting government will be no more in power.
Bilwani urged the government to accord genuine considerations to exporters' recommendations; (a) abolishment of Export Development Surcharge and collection should not be made till the huge amount of unutilized EDF is exhausted; (b) one percent tax on export be reduced to 0.5 percent; (c) zero rating be transformed from SRO system to an Act; (d) and immediate disbursement of exporters' approved refunds.
Advisor to All Pakistan Textile Mills Association (APTMA), Shahid Sattar called the budget 2018-19 as bogus, saying no relief has been given to the textile sector. The APTMA had proposed that energy is an important element regarding cost of production particularly for spinning, weaving and processing industry. Its availability at regionally competitive price is important. In this respect, five exporting sectors zero rated by the FBR should also be zero rated from different tariff equalization surcharges of worth Rs 3.63/kWh to bring the tariff in line with regional competitors. Present electricity tariff is Rs 11/kWh which should be reduced to Rs 7/kWh. If the surcharge is cross subsidy and not the theft or inefficiency of the system then it should be withdrawn to make industry competitive. It was demanded of the government but the demand was not accommodated, he added.
In three provinces, gas is being provided at Rs 600/MMBTU while in Punjab, industry is being given gas at Rs 1300/MMBTU. It was proposed that gas price in all fairness should be uniform throughout the country at Rs 600/MMBTU inclusive of GIDC. Differential for gas price for exporting industry be met from budgetary support. It was demanded of the government but the demand was not accommodated, he added. He further said that Prime Minister announced export-led growth package on January 10, 2017 for the restoration of viability of the industry and exports, but only Rs 16 billion of duty drawbacks have been made to manufacturer-cum-exporter to date.