Textile Exporters are annoyed and distressed in the wake of highest ever liquidity crunch being faced due to imposition of 17 percent GST whose refunds are excessively delayed by the Government without any justification which has caused hurdles in export production. Anti-Export moves of the Government in the hands of its economic team and bureaucracy has left the exporters in the middle of nowhere. In the wake of Global Business shrinking amid COVID, textile exporters are facing extreme uncertainty and can’t decide about future of their businesses as Government has left them without any help in a very critical position. Textile exporters are also worried that despite of commitment and assurances Government could not release timely all refunds during 2019-2020 and what magic Government will do this year to clear their refunds during FY 2020-21 as the major demand and proposals of Value-Added Export sector and all textile Associations to restore “GST Zero-Rating No Payment No Refund” or to introduce 4 percent GST instead of 17 percent was totally neglected in the recent budget. Exporters also lamented that the sitting Government claiming the “policy of change” is following the footsteps of the previous Governments who used to cause delays in payments of refunds to exporters and had never included exports to national priority list. Exporters are also apprehensive about the fate of their other refunds of income tax, customs rebate, duty drawback as well because still a huge amount of worth billions of rupees of exporters is lying with the Government which has not been released. The prevailing high sense of indecision and uncertainty demands the Government’s support to the Textile industry according genuine considerations to their appeal to immediately release all pending refunds in one go, restore GST Zero-Rating No Payment No Refund system or reduce the GST from 17 percent to 4 percent.” This was stated by Chaudhry Salamat Ali, Central Chairman, Pakistan Hosiery Manufacturers & Exporters Association (PHMA).
Salamat Ali articulated that to achieve a breakthrough in enhancement and development of exports, it is extremely necessary that the Government must facilitate the export sector introducing export-friendly policy as the Five Export Oriented Sectors have been highly aggrieved due to rescinding SRO 1125 and imposition of 17% sales tax on exports which Government imposed in the last budget with a view to collect sales tax on domestic sales of textiles. This unilateral move by the Govt. penalized the export sector as their precious liquidity in shape of sales tax refund was held unreasonably with Government, which also caused disruption in enhancement of exports. Responsibility falls on the Government as the liquidity crises faced by Exporters emerged due to the harsh and unwelcomed budgetary measures imposed in shape of 17 percent GST in budget last year, thus, the Government should take the onus to appropriately address the burning liquidity problem being faced by exporters.
Salamat Ali voiced that sense of widespread dissatisfaction is prevailing in the Textile industry and Exporters are facing extreme unrest and anxiety as the Government has completely disregarded and unnoticed the major demands and recommendations of the export sectors of Pakistan which were proposed by the Textile Associations and leading chambers of Pakistan which is inappropriate and condemnable. The textile export sector is the backbone of the economy and exports, most labour-intensive sector, also provide huge urban employment to the female workers and particularly to the lower class in the Garment units and highest foreign exchange earner is beyond the understanding. Textile Industry supports more than 40 allied industries. Ignoring Value-Added Textile sector means Government is closing eyes wide shut towards stakeholders who contribute to more than 60 percent in national exports and highest foreign exchange earners. Exporters wants to know what are the ulterior motives behind such ignorance towards Textile industry?
In view of above, the value added textile sector strongly demands the Government immediately release all pending refunds in one-go, review its decision and restore zero rating on GST – No Payment No Refund System for textile sector or reduce GST from 17% to 4% or otherwise release complete refunds upfront on the stage submission of GD. Else, the Government will be held completely responsible for closure of industries, flight of capital, massive unemployment which will not be in the interest of our beloved country – Pakistan.