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Govt releases Rs47b subsidies for export sectors

Govt releases Rs47b subsidies for export sectors

ISLAMABAD: The federal government has so far in the last three quarters released over Rs47 billion to the textile and non-textile sectors as cash subsidies under the PM’s Export Enhancement Package, according to media report.

The figures showed that an amount of Rs45 billion was released to textile and clothing sectors between July-April under the drawback of local taxes and levies (DLTL). On April 6, the last tranche of Rs6 billion was released for textile and clothing sector.

Under the package, the government had extended cash subsidy at the rate of four per cent for garments exports, 3pc on home-textile, and 2pc on processed fabric. Half of the cash subsidy is linked with 10pc growth proceeds from the previous year.

This amount paid as DLTL is in addition to the Federal Board of Revenue (FBR) payments of sales tax refunds and customs rebates. Under the PM Covid-19 Package, another Rs45 billion have already been released to export-oriented sectors.

An industry source said that exporters’ sales tax refund claims stuck with the FBR are around Rs6 billion. Contrary to this, the federal government has released only Rs2.28 billion as DLTL sectors since July 1, 2019 till to date.

On Friday, the commerce ministry released Rs828 million to the SBP for payments to non-textile sectors. Currently, the leather, footwear, carpets, sports, surgical instruments, and some machinery manufacturers are benefiting from the cash subsidies.