PHMA URGE GOP FOR EXTENSION IN CUT-OFF DATE FOR SUBMISSION OF INCREMENTAL CLAIMS OF DUTY DRAWBACK OF TAXES FOR FY 2018-19 BY 31ST JULY 2020

Commerce Ministry should consider extension in cut-off date of submission of incremental claims of Duty Drawback on Taxes (DDT) for the year 2018-2019 from 31st May 2020 to 31st July 2020 facilitating and enabling textile exporters to submit their claims at convenience without hassle, in view of global business slowdown, lockdown amid COVID19 and reduced working hours for the last almost two months which has also slowed the working efficiency of trade & industry. Likewise, in current scenario and unprecedented set of challenges being confronting to Textile Industry of Pakistan, the Government should also consider and facilitate textile exporters by allowing them to submit remaining 50 percent incremental Duty Drawback of Taxes claims under Duty Drawback Order 2018-21 on achievement of 10% increase during financial year 2019-2020 on the basis of nine months’ performance as export production remained standstill and suffered during a whole quarter due to lockdown amid corona pandemic. This imperative and favourable move by the Government to facilitate textile exporters will boost their confidence to achieve extra mile beyond in enhancement of exports in succeeding years. This was demanded by Chaudhry Salamat Ali, Central Chairman, Pakistan Hosiery Manufacturers & Exporters Association (PHMA).

PHMA Central Chairman, in his letter to Abdul Razak Dawood, Advisor to Prime Minister on Commerce, Textile & Investment, has drawn his attention towards Ministry’s Notification No. 1(42-B)TID/18-TR-II dated 3rd August 2018 for Duty Drawback of Taxes Order 2018-2021 according to which the Government provided extension in Prime Minister’s Package of Incentives for Exporters in order to provide drawback of taxes collected from textile exporters. Duty Drawbacks on Taxes (DDT) under the Order shall be allowed for shipment made from 1st July 2018 to 30th June 2021 while the cut-off date for filing of claims for exports in each financial year shall be 31st July May of the subsequent year.

Salamat Ali apprised that several member exporters approached informing that they have been facing inconvenience, amid economic slowdown and lockdown due to COVID19, to process and complete the procedural requirements as per Duty Drawback of Taxes Order 2018-2021 to submit their DDT incremental claims for the year 2018-2019 at Banks/Authorized dealers by cut-off date 31st May 2020 which is approaching very fast. Due to COVID19 textile industry of Pakistan was affected and remained totally closed for a period of approx. 50 days and industries resumed operations/ productions after special permission from the Government. Country has faced a complete lockdown situation from 23rd March 2020. In such a scenario, banks as well as SBP are open with reduced working hours and limited number of staff which has been causing delays. Last year the Ministry had also extended the cut-off date to 31st May 2019 to 31st July 2019, consequently, in view of current scenario, date of submission of DDT claims for year 2018-2019 must be extended from 31st May 2020 to 31st July 2020 with necessary advice to State Bank of Pakistan, accordingly.
Salamat Ali added that economic slowdown in the wake of COVID19 has brought detrimental effects on the textile industry and exports of Pakistan. The Textile Export Industry has faced colossal financial losses due to cancellation of orders, delayed payments against LCs, disputes as some buyers refused to collect the export shipments at destinations. The Textile Industry resumed operations after two months acquiring special permission, nonetheless, supply chain remained disruptive due to closure of allied industry which provides supplies and materials to smoothly run the wheels of textile export industries. Therefore, the situation and circumstance demand the Government to also facilitate textile exporters by allowing them to submit remaining 50 percent incremental Duty Drawback of Taxes claims under Duty Drawback Order 2018-21 on achievement of 10% increase during financial year 2019-2020 on the basis of nine months’ performance as export production remained standstill and suffered during a whole quarter due to lockdown amid corona pandemic. According to Duty Drawback of Taxes Order 2018-2021, the textile exporters are qualified to avail fifty percent of the rate of duty drawback without condition of increment while remaining fifty percent of the rate of drawback shall be provided if the exporter achieves an increase of ten percent or more in export during current financial year as compared to previous year.

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