FPCCI demands immediate release of Rs250 billion tax refunds

KARACHI: Federation of Pakistan Chambers of Commerce and Industry (FPCCI) on Tuesday demanded the government to release Rs250 tax refunds of exporters without any further delay.

FPCCI President Mian Anjum Nisar urged the Prime Minister of Pakistan Imran Khan and Advisor to the Prime Minister on Finance to honour their commitment of disbursing sales tax refunds within 72 hours of submission of the claims.

He informed that according to the exporters’ associations of Pakistan the stuck-up refunds claims of sales tax, income tax and duty drawback of five export-oriented industrial sectors – Textile, Leather, Carpet, Sports Goods and Surgical Goods- have reached to the tune of around Rs.250 billion whereas the FBR has also acknowledged the amount as Rs.200 billion.

However, out of the total amount of Rs.250 billion, sales tax pending refunds are around Rs. 125 billion and the rest amount of over Rs. 120 billion is stuck-up on account of duty drawback on local taxes (DLTL) and customs rebates. Whereas only Rs.103 billion have been released so far.

President FPCCI said that the number of sales tax refunds cases have been considerably increased after imposition of 17 percent sales tax on domestic supply chain of five leading export-oriented sectors and the government has failed to refund sales tax claim amount under FASTER system within 72 hours, rather Government has not paid exporters’ claims for the last several months.

He apprehended that if the government does not realize the gravity of situation and exporter’s refunds are not released on war footing basis, the export sector will completely collapse leading to huge unemployment in the country.

Mian Anjum Nisar said that the export is largely a function of industrial production, whereas large scale industry registered a negative growth of 6.45 percent during the first four months of the fiscal year 2020-21, therefore, exports have also registered a meager 3.2 percent growth during the first half of the year. Pakistan’s exports are stuck-up around $ 23 billion range since last year.

He apprehended that FBR’s strict policy would completely hurt the value added export sectors and therefore, urged the government to take all necessary steps to release payments of pending refund claims to the exporters immediately and restore zero rating of sales tax that is no payment no refund regime.

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