Textile exporters dismayed at taking associations out of equation

The value-added textile export associations have expressed dissatisfaction over eliminating the "Role of Associations" in the Notification No. 1(42-A)TID/17-TR-II dated 12th December, 2017 of Duty Drawback Taxes Order 2017-18 in supersession of Notification No 1(42-A)TID/17-TR-II dated 20th October, 2017.
In a joint statement by Muhammad Jawed Bilwani, Chairman, Pakistan Apparel Forum (PAF), Zubair Motiwala, Chairman, Dr Khurram Anwar Khawaja, Chairman, Pakistan Hosiery Manufacturers & Exporter Association (PHMA), Shaikh Muhammad Shafiq, Chairman, Pakistan Readymade Garment Manufacturers & Exporter Association (PRGMEA); Kamran Chandna, Chairman, Pakistan Knitwear and Sweater Exporters Association (PAKSEA), Tariq Munir, Senior Vice Chairman, Pakistan Hosiery Manufacturers & Exporter Association (PHMA), Sohail Aziz, Chairman, Pakistan Cotton Fashion Apparels Manufacturers & Exporters Association (PCFA), Khalid Iqbal, Chairman, Towel Manufacturers Association of Pakistan, Mian Muhammad Naeem, Vice Chairman, Pakistan Hosiery Manufacturers & Exporter Association (PHMA), Muhammad Arif, Chairman, Pakistan Cloth Merchants Association (PCMA), Syed Muhammad Aasim Shah Chairman, APBUMA, Ijaz Khokhar, former chairman, PRGMEA, the leadership of textile export associations have stated that the government has taken one-sided decision in isolation without consultation with associations.
This step of democratic government is highly undemocratic as the associations are the elected platforms of industry's stakeholders. The ministry is taking associations for granted and has closed eyes wide shut towards the imperative role played by the associations as specified in the notification issued on 20th October, 2017 wherein the Associations used to certify the authenticity of information provided by the exporting units and verify the claim documents.
They recalled that the Ministry of Textile and stakeholder Associations join hands to develop a smart web based software with its Server maintained at Ministry's RDA Cell with access to exporters and associations to compile a centralize database of exporters as well as export product envisaging salient features like E-Form Number & Date, Destination, Shipment Date, Bank Name, Association Name, Realized Value (FC), Total Invoice Value, Total E-Form Value, Freight, Insurance, Commission and Net FOB Value, HS Code, Product Value, Product Category, Quantity and calculation of Net FOB value for submission of DDT Claim.
It is also pertinent to mention here that previously the associations were exercising due diligence to ensure authenticity of the documents which were verified by the notified committee members of the Associations.
Previously the associations were undertaking the responsibility to check documents, verify and authenticate claims of exporters and certify the claims for onwards to Authorized Dealers like GD for eligible HS Code, Bill of Lading to confirm shipment, verify PRC Annexure IV to check the validity of time period whether claim fall within 90 days or not, Undertaking by Claimant (Appendix III), Application for payment of Duty Drawback of Taxes on export of textile products, Commercial Invoice and then Association issue Appendix II - Certificate of Verification for Duty Drawback on export of Textile Products within 2 days. Meaning thereby the Associations were checking the genuineness of all claims and due diligence to stop fraudulent claims and were also reporting to the Ministry on quarterly basis.
In this manner, the Associations were on board with the ministry in respect to all the claims filed by its members and both Ministry as well as the association.
Previously a large number of complaints were received from exporters regarding silly mistakes on the part of Authorized dealers like no stamp owing to which SBP marked objections and removed the claims from the queue of payments. Henceforth the exporters were facing inordinate delays when they were penalized due to mistakes of authorized dealers. Hence with elimination of role of the Associations, the mistake on the part of the Authorized Dealers will multiply to manifolds as the Authorized Dealers don't have capacity and required skills to scrutinize the claims solely as earlier Associations were doing initial scrutiny.
While eliminating the Role in the New Order is highly undemocratic act on part of the so called democratic government whereby the services of elected representatives in the Association has been challenged and questioned. Therefore Role of Association should be restored and specified in the New DDT Order and proposed that software should be upgraded to interlink the SBP with RDA online software so that exporters and Association could know status of the claims that whether claims is approved for payment or marked for objection under discrepancy.
In the new DDT Order 2017-18, Member Exporter submits their claim to Authorized Dealer / Bank along with all relevant documents for verification of their claim.
Authorized Dealer/Bank checks calculation and scrutinize claim and if all in order forward to SBP within two weeks after receiving the claim otherwise reject the claim for resubmission. They proposed that Authorized Dealers should submit online directly to SBP all relevant documents for verification and release of their claims and online submission receiving also provide to exporters.
Previously SBP was checking the discrepancies and it was supposed to return applications for removal of discrepancies to Authorized Banks within a week from the date of submission but SBP was actually taking 2 to 3 months for this task.
Now that the SBP besides checking discrepancies will also securitize the claims of exporters submitted by Authorized Dealers. It seems impossible that this task can be completed in thirty days. Currently, Agents are approaching to exporters for speedy release of claims without queue from SBP demanding certain percentage which as such is not possible but only with the connivance of the relevant department of SBP. With elimination of Role of Associations, exporters will face severe problems and fear that a new channel of corruption will be opened.
The clause of 2% additional drawback on export to non-traditional countries was specified to encourage exporters to explore new market of non-traditional countries. Subsequently they proposed that this 2% should not be given to those exporters who have already been exporting to these non-traditional countries and should only be given on their increased exports over last year.
Similarly the exporters, who shall explore new market and export to non-traditional countries, may be given 2% additional drawback for encouragement. Textile Export Associations have strongly demanded to take on board the associations in the matter and restore the "Role of Associations" and they felt that the previous DDT Notification of 20th October, 2017 required few amendments as proposed above. Therefore, they pleaded that Revised Notification should be issued in consultation with all relevant stakeholders and consider our pragmatic proposals in the best interest of textile industry and export of our beloved country.-PR