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Ministry’s interference causes blockage of refund claims

Ministry’s interference causes blockage of refund claims

LAHORE: While demanding the government to release stuck-up refund claims, the Pakistan Readymade Garments Manufacturers & Exporters Association (PRGMEA) has said that FBR’s software system of RCPS is very excellent which completes refund process system within one month but finance ministry’s undue interference causes blockage of refund claims to the exporters, as presently more than 80 per cent textile exporters refund of over Rs10 billion is stuck with the FBR.

Senior Vice Chairman of Pakistan Readymade Garments Manufacturers & Exporters Association (PRGMEA) Jawwad A. Chaudhry said that APTMA members’ export is just 50-60 per cent of its total production while the rest of goods are sold locally, however they managed to get refunds through adjustment facility but garment sector, which is exporting more than 80 per cent of their merchandise, are facing liquidity crunch due to its huge capital stuck-up.

Jawwad Ch said that the soaring tariffs of electricity, gas and other essential raw materials are leading to high cost of business in Pakistan further hardening the competition against competing countries. He said that refund claims amounting to billions of rupees; customs rebate claims of billions of rupees and billions of DLTL claims are held up by the government for long period of time. Regarding GSP Plus, he said that Small and Medium Enterprises (SMEs) need to be encouraged to work more effectively and be part of value chains of larger companies while value-added sector needs to have access to raw materials on internationally competitive prices.

Jawwad Ch said that government, industry and other stakeholders including the political parties in Pakistan need to ensure that the country complies with the requirements and the 27 conventions under which GSP Plus has granted. He said that each industry needs to do a competitive analysis and benchmark itself against the industry’s major competitors in the EU markets.  He said government and industry need a joint strategy to inform exporters of the opportunities that are available to Pakistan under the GSP Plus scheme as well as making them aware of the obstacles Prgmea former chairman Sajid Minhas said that since compliance is a major element, the government may consider providing matching grants for industries wanting to put in place infrastructure needed for meeting buyer’s compliance requirements. He said that maximum additional increase in imports from Pakistan to the EU after fulfilling all criteria under the GSP Plus scheme is estimated to be $1 billion over a three-year period.

He proposed a broad based strategy for optimising the GSP Plus opportunity, as this depends on several factors not just limited to a zero tariff access.  Other factors such as lower prices, proximity to the EU market, better supply chain integration, and competitiveness of the industry as well as the industry’s ability to rapidly scale up production are important.