Pkrevenue.com

Tag: PHMA

  • Textile exporters demand extension in filing duty drawback claim

    Textile exporters demand extension in filing duty drawback claim

    KARACHI: Textile exporters have demanded the commerce ministry of allowing extension in filing claims for duty drawback up to July 31, 2020.

    Pakistan Hosiery Manufacturers Association (PHMA) in a statement on Tuesday said that the commerce ministry should consider extension in cut-off date of submission of incremental claims of Duty Drawback on Taxes (DDT) for the year 2018-2019 from May 31, 2020 to July 31, 2020.

    This will facilitate and enable textile exporters to submit their claims at convenience without hassle, in view of global business slowdown, lockdown amid COVID19 and reduced working hours for the last almost two months.

    Likewise, in current scenario and unprecedented set of challenges being confronting to the textile industry, the government should also consider and facilitate textile exporters by allowing them to submit remaining 50 percent incremental duty drawback of taxes claims under Duty Drawback Order 2018-21 on achievement of 10 percent increase during financial year 2019-2020 on the basis of nine months’ performance as export production remained standstill and suffered during a whole quarter due to lockdown amid corona pandemic.

    This imperative and favorable move by the government will facilitate textile exporters and it will boost their confidence to achieve extra mile beyond in enhancement of exports in succeeding years.

    In his letter to Abdul Razak Dawood, Advisor to Prime Minister on Commerce, Textile & Investment, Chaudhry Salamat Ali, Central Chairman PHMA has drawn his attention towards Ministry’s Notification No. 1(42-B)TID/18-TR-II dated 3rd August 2018 for Duty Drawback of Taxes Order 2018-2021 according to which the Government provided extension in Prime Minister’s Package of Incentives for Exporters in order to provide drawback of taxes collected from textile exporters.

    Duty Drawbacks on Taxes (DDT) under the Order shall be allowed for shipment made from 1st July 2018 to 30th June 2021 while the cut-off date for filing of claims for exports in each financial year shall be 31st July May of the subsequent year.

    Salamat Ali apprised that several member exporters approached informing that they have been facing inconvenience, amid economic slowdown and lockdown due to COVID19, to process and complete the procedural requirements as per Duty Drawback of Taxes Order 2018-2021 to submit their DDT incremental claims for the year 2018-2019 at Banks/Authorized dealers by cut-off date 31st May 2020 which is approaching very fast.

    Due to COVID19 textile industry of Pakistan was affected and remained totally closed for a period of around 50 days and industries resumed operations/ productions after special permission from the Government. Country has faced a complete lockdown situation from 23rd March 2020.

    In such a scenario, banks as well as SBP are open with reduced working hours and limited number of staff which has been causing delays. Last year the Ministry had also extended the cut-off date to 31st May 2019 to 31st July 2019, consequently, in view of current scenario, date of submission of DDT claims for year 2018-2019 must be extended from 31st May 2020 to 31st July 2020 with necessary advice to State Bank of Pakistan, accordingly.

    Salamat Ali added that economic slowdown in the wake of COVID19 has brought detrimental effects on the textile industry and exports of Pakistan. The Textile Export Industry has faced colossal financial losses due to cancellation of orders, delayed payments against LCs, disputes as some buyers refused to collect the export shipments at destinations.

    The textile industry resumed operations after two months acquiring special permission, nonetheless, supply chain remained disruptive due to closure of allied industry which provides supplies and materials to smoothly run the wheels of textile export industries.

  • Exporters perturb over part of tax refund claims disallowed without reason

    Exporters perturb over part of tax refund claims disallowed without reason

    KARACHI: Pakistan Hosiery Manufacturers Association (PHMA) on Friday pointed out reduction in refund amount against original claim.

    The PHMA in a letter sent to Ms. Seema Shakil, Member Inland Revenue (Operations), Federal Board Revenue (FBR), informed that it is regretfully informed that against the 100 percent claimed sales tax refunds amount, FBR has cleared 60 percent to 80 percent of 100 percent refund amount and the exporters are unaware why the FBR had withhold the remaining refund amount which has created unrest and spread dissatisfaction among our member exporters.

    With utmost concern we want to learn as to why 100 percent payment of Sales Tax Refund is not made and why some part payment has been deferred / withheld without informing any reason.

    Kindly look into this matter and inform us how to check the reason of withhold amount against sales tax refund claims in Annexure H under FASTER.

    Upon review of the outcome of the refund claims and feedback of our individual members through their professional team we have observed that rejection of the refund claim is largely attributed to the objection of “Risky” and “No amount is admissible for refund”.

    These objections by and large are issuing to refund claimants having a substantial amount of carried forward in their sales tax return and RMS particularly in the month of Jun 2019 but not appearing in RPO of the Jun 2019. You may appreciate in the past electronically rejected claims were processed by local RTO and subsequently RPO’s were generated with lapse of considerable time by processing officer.

    The carry forward amount in those RPOs are though appearing in RMS but due to skip of sequence the same were not incorporated in subsequent months electronic claims and therefore the carry forward amount in electronically issued RPO of Jun 2019 is not tallied with sales tax return or carried forward amount available in RMS.

    You are therefore requested to kindly look into the matter and issue the necessary instructions for incorporating verified carried forward amount appearing in RMS into FASTER and reprocess such refund claims which were rejected due to this technical constraint.

    Objections namely “Risky” and “No amount is admissible for refund” are not understandable, since all the Purchases are made from registered supplier & exporters for export purposes. Why would system not refund a Single Penny.

    Some of the exporters in the first month i.e. July 2019 has opted to carry forward the excess input tax. According to the refund rules the annex ‘H’ is only requires to be filed by person claiming refund.

    The question arises if the annex ‘H’ is not filed by the person opted for carry forward in accordance with the refund rules, how could their carried forward amount be transferred into the brought forward value of next month in the absence of this figure in their RPO of July 2019?

    How it is possible that one month claim is approved by the FASTER and the very next month claim is rejected by the FASTER without giving any reason. Therefore, FASTER should be equipped to define the reason of rejection. “Risky” and “No amount is admissible for refund.

    It has been observed the FASTER system runs once a month due to which large number of claims are rejected. It is proposed that FASTER system should run preferably once a week to avoid rejection of large number of claims.

    The time limit of 120 days for filing of Annex ‘H’ in this background is also needs to be extended. It is proposed to extended time limit for at-least another 60days for submission of Annex ‘H’ for the months of July, 2019 and August, 2019, so that genuine amount of refund claims due to this shift of regime and technical problems should not be lapsed.

  • Sales tax refund promises annoy value added textile industry

    Sales tax refund promises annoy value added textile industry

    KARACHI: The value added textile industry has expressed its displeasure over government’s repeated promises of clearing sales tax refunds.

    The government made promises for the past several months to clearing pending sales tax refunds but failed to honor, said Jawed Bilwani, Chief Coordinator of the Value Added Textile Export Sector said on Tuesday in a joint press conference at Pakistan Hosiery Manufacturers Association (PHMA) House.

    He said that the value added industry was facing serious liquidity problems due to stuck up refunds.

    The prime minister assured the business community to resolve the issue of refunds completely through a new mechanism. Besides, Hafeez Shaikh, Advisor to Prime Minister on Finance and Revenue and Syed Shabbar Zaidi, Chairman, Federal Board of Revenue (FBR) also promised the refunds would be issued when exporters would file their goods declarations.

    Instead tall claims the situation has further aggravated, Bilwani said.

    He said that around 40 percent of the industry was facing immense liquidity problems. “This resulted in closure of factories,” he added.

    For the past pending sales tax refunds, the government issued bonds, which were never encahsed, he said.

    For the past four months the government was repeatedly assuring to resolve the issue, he said, adding that nothing was done in this regard.

    He said that on the one side the government was endeavoring to increase the exports but on the other side it was silent on the issue of refunds.

  • Export sector complains non-compliance by power utilities

    Export sector complains non-compliance by power utilities

    KARACHI – The zero-rated textile export sector in Pakistan has raised concerns over the non-compliance of power utility companies in providing subsidized rates, according to a letter addressed to Abdul Razak Dawood, the Adviser to the Prime Minister on Commerce and Textile Industry.

    (more…)
  • Value added sector seeks tax credit on equity investment for individuals, AOPs

    Value added sector seeks tax credit on equity investment for individuals, AOPs

    KARACHI: The value added sector, represented by the Pakistan Hosiery Manufacturers and Exporters Association (PHMA), has reached out to Finance Minister Asad Umar, urging the government to grant tax credit for equity investment to business individuals and Associations of Persons (AOPs).

    (more…)