Export-oriented textile industry warns legal action

Non-payment of refund claims

LAHORE: The export-oriented industry of value-added textile, waiting for the refund claims of around Rs4.6 billion pending for the last two years, has threatened to move court if their funds were not released immediately.

Pakistan Readymade Garment Manufacturers and Exporters Association (PRGMEA) Chief Coordinator Ijaz Khokhar on Monday asked Finance Minister Ishaq Dar to personally intervene and play the role in early processing of exporters' claims, otherwise they would approach the court against this illogical circular of the State Bank of Pakistan.

He said that the State Bank of Pakistan revised the calculation method in DLTL Scheme at a time when full payment is due and exporters have submitted their final claims after a lengthy process of paperwork.

If the Finance Ministry does not intervene in the matter the whole fund of Rs 4.6 billion under DLTL Growth Scheme may be lapsed due to undue delay in payment.

“If SBP considers this new method necessary it should be implemented from next financial year and the central bank should intimate the exporters in the beginning not at the end of the year.”

Khokhar said the association has also sent a letter to the National Standing Committee on Textile chairman Khawaja Ghulam Rasool Koreja to raise the issue of financial crunch faced by the apparel sector. 

Koreja has fixed the meeting with PRGMEA to deliberate all issues of textile industry.

He said that the finance minister Ishaq Dar had committed in his budget 2015-16 speech for refunds of claims of Drawback of Local Taxes and Levy (DLTL) to the exporters but the recent circular of the SBP gives impression that it would not seem to be materialized like several other commitments of the government.

Ijaz Khokhar said that revision in method of calculating DLTL claims will require additional paper work, fresh certificates/undertaking and re-verification of the claims already verified by the ministry of textiles. He said that it would delay the processing of claims and add to the financial burden on the value added sector.

“The claims already submitted under notification dated 22 October 2014, should be acceptable as the export realization in rupee has been calculated on daily closing rates published by the State Bank. We don’t see the need to submit the claims, as all data pertaining to exports in foreign currencies is already available with the SBP.