Delay in sales tax refund

Textile exporters have complained against the abnormal delay in the disposal of their sales tax refund claims, which has confronted them with acute liquidity crunch. They had  filed claims for the refund of sale tax in July 2019 on the value of products exported in last fiscal year, which need to have been honoured and refund released within 72 hours under the FASTER system introduced by the government. On the contrary, still 25 t0 30 percent sales tax refund claims are pending in the FBR, although the current fiscal year is at its tail end.

Previously, five export industries, including textiles, carpets, leather, surgical and sports goods were availing the facility of zero rated sales tax on products manufactured for exports alone. The facility was withdrawn in the budget of current fiscal year, because the manufacturers of these industries were collecting sales tax on local sales but the money was not deposited in the national kitty. They have again demanded the restoration of zero rate facility on the quantum of export products on the plea that 75 percent documentation of SMEs has been completed by the FBR. The grievances of textile exporters about sales tax refund need serious consideration, if government wants success of strategic textile export policy 2020-25, envisaging increase in exports of textile products from $3.8 billion to $25 billion.