Textile exporters perturbed over delays in GST refunds

Textile exporters perturbed over delays in GST refunds

KARACHI, July 05, 2020: Textile exporters are highly perturbed over excessive and unreasonable delays in GST refunds which have been causing liquidity problems since July 2019 when 17 percent GST was imposed by the Government in the previous budget despite of stiff resistance from Five Zero-Rated Export sectors.

In view of ill experience during FY 2019-2020, textile exporters are worried and upset as to how the Government will keep its commitment for timely refunds during FY 2020-21 as the major demands and proposals of value-added export sector and all textile associations to restore “GST Zero-Rating No Payment No Refund” or to introduce 4 percent GST instead of 17 percent went deaf on the ears of Government’s economic team and no relief was provided in the Federal Budget 2020-21.

Exporters have also expressed their concern over inordinate delays in payments of customs rebate, duty drawback as well because as of today a huge amount, worth billions of rupees of exporters, is still stuck up with the Government which has not been released.

The prevailing high sense of insecurity and uncertainty demands the govt’s support to the textile industry according genuine considerations to their appeal to restore GST Zero-Rating No Payment No Refund system, otherwise, upgrade the system to pay refund claims electronically, without human intervention, on the submission of GD. This was stated by Chaudhry Salamat Ali, Central Chairman, Pakistan Hosiery Manufacturers & Exporters Association (PHMA).

Salamat Ali articulated that sense of discontentment is prevailing in the textile industry and exporters are facing extreme unrest and anxiety. As per the past practice, PHMA had given its suggestions for the Federal Budget 2020-21, however, to our utmost surprise, the govt had neither consulted for budget discussion meeting nor their proposals incorporated in the budget. It is highly unethical and inappropriate that first time in the history of country, stakeholders were totally ignored for consultation twice: before and after the budget. The textile export sector is the backbone of the economy, exports and labour-intensive sector. Textile industry supports more than 40 allied industries. Disregarding the value-added textile sector means govt is shutting its eyes towards stakeholders who contribute to more than 60 percent in national exports and highest foreign exchange earners. Exporters want to know what are the ulterior motives behind such ignorance towards textile industry?

In view of above, the value added textile sector strongly demands the Government to review its decision and restore zero rating on GST - No Payment No Refund System - for textile sector or reduce GST from 17 percent to 4 percent or otherwise release complete refunds upfront on the stage submission of GD. Otherwise, the Government will be held completely responsible for closure of industries, flight of capital, massive unemployment which will not be in the interest of our beloved country, Pakistan. PR