Pakistan Textile Exporters Association (PTEA) Chairman Ajmal Farooq has emphasised the need for implementing the zero-rated regime in order to boost the country’s export industries. He further stressed that the policies for the upcoming fiscal should be devised so that the export sector receives its due support in order to remain competitive in the global market.
Farooq stated that although the exports were made zero-rated in the current FY, but the policy was not fully implemented.
Farooq appreciated the government’s initiatives for the promotion of exports and urged that they should be carried forward into the next fiscal year.
He suggested that the FBR should establish a mechanism for addressing practical hassle and liquidity problem of refund claimants. Moreover, the Sales Tax Act and Sales Tax Rules, especially the relevant Section 21, should be amended, he stressed.
“Sales tax is imposed on the locally produced machinery, whereas machinery import is included in the Eighth Schedule. This exemption should be withdrawn as it is a source of disparity,” he said.
Recognising cash flow problems as a major impediment to export growth, the PTEA chairman stated that billions of textile exporters are tied up in sales tax, customs duty and income tax refund. He asked the government to allocate sufficient funds in the upcoming budget in order to ensure the release of outstanding refund claims of exporters.
Farooq went on to add that the textile companies in Punjab were receiving the least amount of gas. PTEA chairman stated that since exports are zero-rated, there is no justification to collect sales tax from textile exporters.
