Unpaid duty refunds: Apparel exporters threaten to file case in court

Reject the new duty drawback calculation method

LAHORE: Exporters of value-added textile goods, who have been awaiting the release of refund claims of around Rs4.6 billion for the last two years, have threatened to take the matter to court if it is not resolved immediately.

According to a press release, Pakistan Readymade Garment Manufacturers and Exporters Association (PRGMEA) Chief Coordinator Ijaz Khokhar on Monday asked Finance Minister Ishaq Dar to intervene and start work on processing the refund claims, otherwise, they would approach the court against the State Bank of Pakistan (SBP).

He said the SBP had revised the calculation method in the drawback of local taxes and levies (DLTL) scheme at a time when payments were due and exporters had submitted final claims after a lengthy paperwork.

“If the finance ministry does not intervene, refunds of Rs4.6 billion may be lapsed due to undue delay in payments,” he said.

“If the SBP considers this new method necessary, it should be implemented from the next financial year and the central bank should intimate the exporters at the beginning and not at the end of the year.” The association has also sent a letter to the National Assembly Standing Committee on Textile Chairman Khawaja Ghulam Rasool Koreja to highlight the financial crunch being faced by the apparel sector.

He said Dar had committed in the 2015-16 budget speech to DLTL refund to the exporters, but a recent SBP circular gave an impression that it would not be implemented like several other commitments of the government.

Khokhar said revision in the method for calculating DLTL claims would require additional paperwork, fresh certificates and re-verification of the claims already approved by the Ministry of Textile Industry. “It will delay the processing of claims and add to the financial burden on the value-added sector.

“The claims already submitted under a notification dated October 22, 2014 should be acceptable as the realisation of export proceeds in rupee has been calculated on the daily closing rates published by the State Bank,” said Khokhar.

“We do not 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 dollars can easily be done by the verifying authority at the time of verification.”

Published in The Express Tribune, May 10^th, 2016.

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