Exporters demand ‘no payment no refund’ regime

KARACHI: It is time the government should revive ‘No payment no refund’ regime for the five export-oriented sectors as the cost of production has increased, resulting in decline in textile exports, a leading exporter said on Wednesday.
Value-Added Textile Associations chairman Muhammad Jawed Bilwani, in a statement, said the exports of the value-added textile sector would keep on declining while competing countries would rapidly multiply their exports just because of the edge they have on the cost of doing business and other incentives offered by their governments.
He said if the current situation prevails the textile sector would close down resulting in mass unemployment and law and order situation.
The value added textile sector is the backbone of the economy with great potential for earning foreign exchange. Around 54 percent of nation’s exports and 42 percent urban employment are heading towards disaster because of declining trend in the exports, he added.
‘All pending sales tax refund should be released along with custom rebates and DLTL claims as huge amount of the liquidity of the exporters is held up, restraining the exporters from running their factories due to liquidity crunch and cash flow problems thus unable to deliver export commitments,’ he added.
Pragmatic policies in consultation with stakeholders need to be formulated to reduce the cost of business by fixing rates of all essential raw material including gas, electricity, water in line with competing countries in the global market to create a level playing field, the chairman suggested.
Gas Infrastructure Development Cess (GIDC) at a rate of Rs100 per MMBTU would increase cost of production tremendously and a minimum impact would be more than 3.5 percent whereas profitability in the sector is not more than four to five percent, he said and suggested complete withdrawal of GIDC.