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'Over Rs 1,500 million stuck-up sales tax refund hits textile exports'

FAISALABAD (December 01 2002) : More than Rs 1,500 million sales tax refund of the textile exporters are stuck up with the department, and they are unable to book fresh export orders as all their capital is almost blocked.

All Pakistan Cloth Exporters Association (Apcea) Chairman Khurram Iftikhar while talking to newsmen here on Saturday stated this.

He said the implementation of new rules of sales tax has been made very complicated, and cumbersome resultantly, the sales tax refund claims delayed beyond the mandatory period.

Khurram Iftikhar pointed out that in Faisalabad the refund of gold category-holders had a backlog of three months above the regular refund period, saying in cases, where refund on stocks was to be reimbursed in 40 days, and the delay was of 8-12 months.

Similarly, regarding non-gold category cases, the refund in Faisalabad is already six months late over and above the regular specified period while in case of refund on stocks for this category, there is also a delay of 8-12 months, he added.

The Apcea chief said the cumulative result of the additional delays is that almost the whole capital investment has been blocked in sales tax refund system, and in certain cases the bank credit availed by the exporters has also gone into the coffers of the sales tax department.

He said the exporters are paying interest on the amount which they have obtained from the banks for promotion of their exports, adding with this scenario the exporters feel themselves helpless to book fresh export orders and execute them on time.

Pin-pointing the snags in the implementation and working of new refund rules, the Apcea chief said the sales tax department has introduced automation system for filing of claims very abruptly, adding this system has not been perfect by the department with the result that the compact diskettes (CD) provided by the ST department were found defective and after first version, the second version was introduced which was also proved defective and third version has been introduced which is also not up to the mark.

He said the difficulty is that the department has refused to accept hard copy of sales tax claims, insisting on filing the claims on defective CDs and thereafter the refunds are held back on the pretext that the information provided in the claims is incomplete.

Khurram Iftikhar said the department should have given six months adaptation period while simultaneously running the old and new systems, and another hardship faced by the exporters in the wake of implementation of new sales tax rules that the supplementary claims filed by the exporters are not being processed on the plea that the claim documents require verification which cannot be undertaken due to inadequacy and shortage of requisite staff strength.

Consequently, the supplementary claims prior to 1998 have been lying pending, and exporters are suffering heavily at the hands of sales tax department, the Apcea chief argued.

Khurram Iftikhar appealed to the quarters concerned to take immediate cognisance of the matter, and intervene favourably to relieve the exporters of from these ordeals which consume most of their time and energy so as to enable them to devote their time for promotion of exports of the country.

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