The textile industry, which has been awaiting refund claims of around Rs 4.6 billion, pending for the last two years, has threatened to move court if their funds are not released immediately.
Pakistan Readymade Garment Manufacturers and Exporters Association (PRGMEA) Chief Coordinator Ijaz Khokhar on Monday asked Finance Minister Ishaq Dar to personally intervene and play his role in early processing of exporters’ claims, otherwise they would approach the courts against this “illogical circular of the State Bank of Pakistan”.
He said that the State Bank of Pakistan revised the calculation method in Drawback of Local Taxes and Levies (DLTL) Scheme at a time when full payment is due and exporters have submitted their final claims after a lengthy process of paperwork.
He said if the Finance Ministry does not intervene in the matter the whole fund of Rs 4.6 billion under DLTL Growth Scheme may be lapsed due to undue delay in payment.
“If SBP considers this new method necessary it should be implemented from next financial year and the central bank should intimate the exporters in the beginning, and not at the end of the year.”
PRGMEA Chief Coordinator Ijaz Khokhar said the Association has also sent a letter to the National Assembly’s Standing Committee on Textile Chairman Khawaja Ghulam Rasool Koreja to raise the issue of the financial crunch faced by the apparel sector. Koreja has fixed the meeting with PRGMEA to deliberate all issues of the textile industry.
He said that Finister Minister Ishaq Dar had committed in his 2015-16 budget speech to refunds of claims of DLTL to the exporters but the recent circular of the SBP gives the impression that it would not be materialised like several other commitments of the government.
Ijaz Khokhar said that revision in method of calculating DLTL claims will require additional paperwork, fresh certificates and undertakings and re-verification of the claims already verified by the Ministry of Textiles.
He said that it would delay the processing of claims and add to the financial burden on this value added sector.
“The claims already submitted under notification dated October 22, 2014 should be acceptable as the export realisation in rupee has been calculated on daily closing rates published by the State Bank. We don’t see the need to submit the claims, as all data pertaining to exports in foreign currencies is already available with the SBP. The conversion of claims in USD can easily be done by the verifying authority at the time of verification,” Khokhar said.
PRGMEA chief coordinator observed that new method will result in unnecessary reprocessing and re-scrutiny of claims at all levels, wasting precious times.
Keeping in view the declining trend in exports and blockage of precious working capital under various schemes, this action will further worsen the situation for the value added exporters, he added.
He said that the country’s exports have been declining sharply during the last 9 months (July-March) of 2016 and the government needs to take preventive measures to halt this trend.