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Lahore Chamber demands clearance of sales tax refund claims

LAHORE (December 24 2002) : Lahore Chamber of Commerce and Industry (LCCI) President M Yawar Irfan Khan has demanded of the Finance Ministry and Chairman of the Central Board of Revenue to immediately expedite stuck-up sales tax refund claims.

In a press statement issued here on Monday, Yawar said: “The CBR is killing the most productive sector by denying the exporters the right of refund of Sales Tax.” The stuck-up amount has reportedly gone up to Rs 60 billion.

“The delay in release of such huge funds would trigger a serious liquidity crunch for the exporters and industry that may lead to closure of several industrial units,” he said, adding that authorities concerned should take realistic view of the matter and allow the refunds of sales tax to commercial exporters at the earliest, who are facing grave hardship.

He also strongly criticised the CBR's approach on SRO 410 and its replacement with 'Duty and Tax Remission for Export (DTRE) rules without removing the objections raised by the exporters' association in this respect.

Responding to a report appeared in a section of press, he said the reasons given by the CBR officials for withdrawal of facility of free importation under the SRO 410 do not carry weight, rather they further prove the weakness in the CBR's approach on the issue.

He asked as to how the CBR could justify the withdrawal of SRO 410 on the simple excuse that some importers were misusing the facility.

Rather, the CBR should not only expose such importers but also punish them for their wrong-doing instead of withdrawing the decades-old facility available to the exporters, he added.

Lamenting CBR's effort of twisting the facts, he pointed out that the objections raised by the exporters during consultation have never been redressed by the CBR till date.

The CBR has failed in removing the flaws mentioned by the exporters in the DTRE scheme, he added.

According to him, it is not easy to understand that why the CBR was insisting on the imposition of DTRE scheme in place of the SRO 410 without realising that free importation for re-export purposes was allowed throughout the world.

He urged the Advisor to the Prime Minister on Economic Affairs Shaukat Aziz to direct the CBR not to withdraw SRO 410 in the larger interests of the country.

He also drew attention of the CBR chief towards held up consignments of goods at the Karachi port and undergoing heavy demurrage charges.

He regretted that trans-shipment permissions are not being granted because their applications for grant of permission are referred back to the Lahore Collectorate for verification of the importers.

The Collector Lahore in turn has constituted a team under an Assistant Collector who receives these inquiries from the Collector Karachi.

This team takes two to three weeks to verify genuineness of the upcountry importers to allow trans-shipment of such cargo, leading to demurrage charges in millions of rupees.

“This unnecessary impediment in the free flow of cargo to the upcountry is not only unlawful but also results in extra economic burden on importers due to demurrage charges,” he said.

He appealed to the CBR to take immediate remedial measures in order to save importers and industrialists from unnecessary monetary losses in shape of demurrage charges.

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