Pakistani Government Assures 100 Percent Drawback Rate of Incentive

"The Government assured that complete 100 percent drawback rate of incentive for eligible textile sectors on the same terms as for the period from January 1 to June 30, 2017 without condition of increment would be provided for the period from July 1, 2017 to June 30, 2018, nevertheless, the relevant Notification recently issued says that 50 percent of the rate of drawback shall be provided without condition of increment and remaining 50 percent of the rate of drawback shall be provided, if the exporter achieves an increase of 10 percent or more in exports during performance year (FY 2017-18), as compared to the base year (FY2016-17),' stated in the joint statement by Muhammad Jawed Bilwani, Chairman, Pakistan Apparel Forum; Muhammad Zubair Motiwala, Chairman, Council of All Pakistan Textile Association (CAPTA); Tariq Munir, Chairman, PHMA; Kamran Chandna, Chairman, PAKSEA; Shaikh Muhammad Shafiq, Chairman, PRGMEA; Sohail Aziz, Chairman, PCFA; Muhammad Arif, Chairman, PCMA.

Valued Added Textile Exporters Associations have shown great concern and reservation on major clauses of the Notification No.1(42-A)TID/17-TR-II dated 20th October, 2017 namely "Duty Drawback of Taxes Order 2017-18" issued by Textile Division, Ministry of Commerce & Textile.

With regards to release of amount of the claim mentioned in the Clause 4.(2).b of the Notification that SBP will release the amount of claim to the Authorized Dealers within forty eight (48) hours after receipt by debiting the relevant Government head of account, however, they demanded that the incentive amount should be directly credited to the exporters account at the time of realization of export proceeds and SBP may subsequently claim the amount from the Government. The condition of "after receipt" should be abolished and prompt payment shall be made. Otherwise, again backlog of payments to be made to exporters shall be created as previous payments of billions of rupees have not yet been made to the exporters because the Finance Ministry has still not disbursed the payments to SBP under relevant head of account.

Meaning thereby the initiatives of the Government to exporters shall be remain in papers while the payments shall not be made promptly, hence the exporters shall continue to face financial hardships.

They proposed that suggestion as all export related information/documents are submitted online and available with Government like E-Form is generated through WeBOC and submitted to SBP, GD is generated online in WeBOC and Foreign Exchange Payment realized through Authorized Dealer and reported to SBP. This will save the precious time of exporters which was used in the online submission of export details at RDA Cell website and eliminate the risk of time barred of claims.

They voiced that further to improve the cash flow of exporters, the early disbursement against increase of 10% or more shall be allowed on the performance during July December, 2017, subject to submission of a bank guarantee that the exporter will return the excess amount, in case exporter annual exports are less than the amount of drawback paid to exporters.