PHMA wants quick ST refunds as exporters suffer acute financial liquidity

by index360

LAHORE: Pakistan Hosiery Manufacturers & Exporters Association (PHMA) Central Chairman Shahzad Azam Khan has said the commitment of the Federal Board of Revenue (FBR) to instantly release exporters’ tax refund claims seems to be just an eyewash, as inordinate delays in the payment of sales tax refund claims under FASTER system continues.

In a press statement, Khan observed that the value-added textile exporters are facing severe liquidity crunch and they need the refunds payment like government required IMF loan.

“It’s a question of survival amidst acute liquidity crunch and we need the help of the finance minister. Like government is pursuing the IMF in search of dollars in the same way we also need the government’s help to save the industry from bankruptcy by releasing its refunds,” he appealed.

He said that the PHMA has been approached by various members informing that they have been facing inconvenience owing to delay in refunds payment despite the fact that their Refund Payment Orders (RPOs) were generated as well as approved during the month of May 2022. He called for release of sales tax refunds within the specified timeline as per law and rules, as any further delays will cause them financial hardships and liquidity crunch owing to high sales tax rates.

He said that the matter has also been brought to the immediate attention of Federal Minister for Finance & Revenue Miftah Ismail as well as the FBR officials during exporters’ recent meetings in Islamabad.

He termed the new system slower, arguing that nothing has changed in the newer system. He said that the PHMA took lead in assisting the FBR to upgrade and streamline the FBR’s Sales Tax Returns’ Faster System which was launched subsequent to the imposition of Sales Tax on textile industry which was previously regulated under SRO 1125 under “No-Sales Tax, No-Refund” regime.

He said that the core objective of the FBR’s Sales Tax Faster system is to expedite refunds payment of export-oriented sectors within 72 hours of submission of relevant claims under the law to avoid any liquidity pressure on the exporters. The system, previously, had many glitches upon its launching which were improved and streamlined in consultation with the PHMA and other stakeholders’ Associations. 

 The PHMA central chairman pointed out that the FBR earlier claimed that it would disburse sales tax refunds through the FASTER system to the exporters of five export-oriented sectors within 72 hours of the submission of refund claims but even after a lapse of hundreds of hours, refunds had not been received.

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