Textile sector urges reinstatement of No Payment, No Refund regime

FAISALABAD: With liquid assets drying up fast due to no-show of sales tax refunds, the textile industry is pressing the government to restore the zero-rated facility for the sector to stem the slow demise of a profitable part of Pakistan’s economy.

According to Pakistan Hosiery Manufactures & Exporters Association (PHMA) Central Chairman Haji Salamat Ali, the Federal Board of Revenue (FBR) is yet to issue billions of rupees refunds to exporters despite promises, pending since July 2019.

Following the imposition of a 17% sales tax on the textile sector this year, the delay in the release of refunds is causing serious problems for exporters, who were promised refunds within 72 hours of claiming them.

In light of the current situation, the business community has urged the government to reinstate the No Payment, No Refund policy for the textile industry.

Another suggestion to reduce the sales tax from 17% to 5% has been put forward by All Pakistan Textile Processing Mills Association (APTPMA) Chairman Muhammad Pervez Lala.

“Unfortunately, due to abolition of sales tax zero rating regime and imposition of GST, the industry is facing a serious crisis. Hence, it is necessary to reduce the rate of sales tax urgently at adequate level,” said Lala.

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