Textile Exporters in Pakistan Affected by Unpaid Drawback Claims
Date : November 30, 2011
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The Pakistan Textile Exporters Association (PTEA) has claimed that working capital of the country’s textile exporters worth about PKR 25 billion is blocked under several duty drawback schemes, which is affecting the country’s exports and is also causing a negative effect on the nation’s economy.
After the end of quota system in textile trade, exporters were provided with research and development facilities in order to help them enhance their exports.
However, the facility was suspended after a couple of years in 2008, following which some refund claims are still lying unpaid, which is causing the exporters to suffer financial crisis and is also hampering their business flow as their working capital remains blocked.
Meanwhile, with a view to help the textile exporters, the present Government introduced another drawback of local taxes and levies (DLTL) scheme under its Textile Policy in 2009.
The scheme met with positive response from the side of exporters and the country’s overall exports surged above US$ 24 billion, while textile exports jumped above US$ 13 billion.
However, the drawback facility as promised under the scheme was not honoured fully and just 14.67 percent of the claims submitted by the exporters have been paid till now, due to which considerable amount of working capital of the exporters is still blocked with the Government.
Thus, while on one hand the working capital of exporters is getting blocked in Government’s duty drawback schemes, the cost of production is also going up with each passing day on the other. The twin affect is rendering the Pakistan textile industry’s exports unviable on global front.