Duty drawback package being used for promoting Indian goods, PM told

ISLAMABAD: The duty drawback package made for enhancement of exports has not only been found flawed, but has also been deemed as against the interests of Pakistan’s manufacturers as the current one is being used for the promotion of Indian goods. 

“We have pinpointed this issue to Prime Minister Shahid Khaqan Abbasi, saying the duty drawback package contains anomaly, as those importing Indian yarn and cloth with zero duty, add some value and export them and earn the 7 percent rebate which is the negation of the spirit of the package offered to the indigenous exporters, Gohar Ejaz, an eminent leader of the textile industry told The News. 

“It is crystal clear that the duty drawback package was meant to be offered to those textile manufacturers who pay the duties, taxes in the full indigenous chain starting from cotton, yarn, cloth up to the textile value added products but unfortunately the story is entirely different on ground”. 

The fact is Gohar said Indian tycoons have built the textile facilities in Ludhiana in Indian Punjab from where some traders from Pakistan are busy importing the duty-free yarn and cloth through Wagah Border and then they add some value and export them and resultantly they benefit from the duty drawback facility by getting 7 percent rebate. 

He said textile industry wants to get the duty drawback of Taxes Order 2016-17 rectified stressing that all the claims and payments of rebate must be made net of any duty-free imports of material used in the value adding process as it is required by the law. 

All Pakistan Textile Mills Association Secretary General Hamid Khan in a statement to The News also came up with the concern saying that under the existing Duty Drawback of Taxes Order 2016-17, the genuine exporters who use the indigenous raw materials are not benefitting, rather those who are representatives of the bonded warehouses and involved in importing material from India benefitting from the scheme more than the genuine manufacturers of the textile products. 

Shahid Sattar, former member Planning Commission and eminent economic expert also endorsed the statement of Hamid Khan, saying that Indian goods are being projected on account of faulty duty drawback package and it must be altered with immediate effect ensuring the whole benefit to the genuine manufacturers and exporters of the country. The prime minister has promised to look into the matter. 

Hamid Khan also said APTMA wants from the government that “provision be made for immediate full payment of performance-based drawback to eligible/entitled manufacturers-cum-exporters units on/after achievements of 10 percent increased performance over the prior year for instance if an exporter achieves 10 percent export growth in first three month of current financial year 2017-18 be released with proceeds realisation certificates”. 

With respect to clause 3(2) of the Duty Drawback of Taxes Order 2016-17, he also demanded that the provision of only notified executive members of their association being eligible to verify claim documents has been experienced to be unworkable and cumbersome. So it is therefore, represented that digital signatures be treated acceptable for claim verification purpose. He also said the amount of Rs9 billion has been disbursed under the duty drawback package whereas Rs26 billion claims have been booked and the Rs40 billion claims are yet to be processed.