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Friday March 29, 2024

APTMA sensitizes Razak: FASTER no more functional causing delay of Rs20b refunds

By Khalid Mustafa
March 07, 2020

ISLAMABAD: The All Pakistan Textile Mills Association (APTMA) has sensitised Adviser to Prime Minister on Commerce, Textile, Industries & Production and Investment Abdul Razak Dawood that the FBR’s Refund system ‘FASTER’ is not operational for the last 20 days.

This has led to piling up of current refunds of exporters on the one hand whereas the processing of earlier mis-processed returns is also on a hold. And on top of that, the FBR is in fact still processing refunds for July 2019.

The textile industry has pinpointed in a letter written here on Friday (March 06, 2020) to Adviser to Prime Minister on Commerce, Textile, Industries & Production and Investment Abdul Razak Dawood the very serious developing situation causing the liquidity crisis on account of non-operational of ‘FASTER’ -- the FBR’s refund system. According to the letter whose copy is also available with The News, as highlighted in the earlier correspondence, the estimated monthly refunds is in the region of Rs20 billion while the FBR has claimed a much smaller figure. Furthermore, the FBR has stated that domestic sales were of the order of 50 percent of industrial output, meaning by that roughly $13 billion, but have now acknowledged that the quantum of local sales is no more than 20 percent, which is $2.2 billion per annum.

Every time, the letter says, APTMA has asked the FBR when the issues with FASTER would be resolved, they have told time and again that they would be resolved within the next 3 or 4 days. This has gone on far too long and APTMA now requests the government to reconsider the whole issue of zero rating and its ill-considered withdrawal. "The premise of withdrawal of zero rating has been proven to be wrong.

"As a result of FBR’s misinformation and mishandling of the situation, exports are about to come to a standstill, dissipating all the hard-fought gains made over the last 18 months."

APTMA requested that a high-level meeting be called urgently to thrash out a workable solution to this problem. The letter says that "APTMA believes that this should be FBR disbursing a percentage of the sales tax claimed in the returns without processing to provide relief to the exporting sector so that the export cycle continues to work".

The letter also highlights the Patron-in-Chief of APTMA, Ejaz Gohar, repeatedly stated the real facts that local sales are about $2.2 billion not $13 billion as was being quoted by FBR and several different self-claiming gurus. The irony and pity is that the textile sector at the time of withdrawal of zero rating was poised to take off in a big way but as in the proverbial snake & ladder, the snake bit and pushed us back by quite a few years.

It is pertinent to mention that at the time of withdrawal of zero rating, the textile industry was given a firm commitment of continuation of the energy package by all the parties in negotiation with us. The fact is that the Power Division started adding surcharges from July 1st, 2019 on top of 7.5 cents, thereby, not upholding the sanctity of policy continuation and commitments made. This matter is now again with the ECC and has been deferred despite an agreement reached with the industry last week.