Textile industry mulls moving court on refund issue

KARACHI: Value-added textile industry is considering moving court against the Federal Board of Revenue (FBR) for not releasing refunds, which crossed around Rs300 billion in various heads.

The Council of Textile Association said at a press conference on Thursday the industrialists are consulting with lawyers on the longstanding refund claims and would soon file an appeal in the court in this regard. The industrialists were gathered to protest against the ongoing FBR action against tax evaders and non-filers. They said the action should be restricted to defaulters, but the tax departments are harassing the genuine taxpayers, as well.

They criticised the recent action of the FBR to rollback electronically generated refund payment orders (ERPOs) and said due to this move, the exporters’ liquidity issue would further deepen.

Jawed Bilwani, chairman of the Value-Added Textile Exporters Association said that instead of releasing due refunds, the FBR has started harassing the exporters.

The FBR is not releasing sales tax refunds of exporters, besides income tax refunds were also stuck up for the last 12 months, he said, adding, Customs rebates and Drawback of Local Taxes and Levy (DLTL) claims are also pending.

Bilwani said that the tax departments are issuing unnecessary audit notices to exporters and harassing them. “In some cases, the tax offices have frozen bank accounts of the taxpayers and recovered the so-called defaulted amount,” he added.

The FBR is also sending notices related to deduction of withholding taxes, he said, adding, the exporters have been made withholding agents without their knowledge and now the FBR is demanding the payment that is not deducted as the withholding agent.

Zubair Motiwala, a leading textile expert and industrialist, said that the non-issuance of refunds has aggravated the situation, as the cost of doing business in Pakistan is the highest in the region.

He urged the government to appoint international experts for determination of the cost of doing business in Pakistan, which would clear the position.

The cost of doing business is 22 percent higher than Bangladesh, 12 percent than India and 15 percent higher than Sri Lanka, he said. “With such a high cost, how Pakistan will be able to increase exports?” He questioned.