May 29, 2002	Wednesday	Rabi-ul-Awwal 16,1423

KARACHI, May 28: Exporters have claimed that billions of rupees towards sales tax refunds are blocked or held back by the sales tax collectorates all over the country, bringing export trade to almost a grinding halt.

“Exporters cannot meet their export contracts without getting sales tax refund within a specified time as they have no alternate source to circulate their funds,” a leading exporter said.

There is a unanimity in the views of exporters, who now firmly believe that the present sales tax refund system cannot work because it only favours unscrupulous elements within and outside the sales tax collectorates.

Exporters lamented that they have not been getting their refunds since January 2002, and every year only two months ahead of the budget payments come to a grinding halt. “When we approach the sales tax collectors for our refunds the answer is ‘there are no funds’ to make payments,” another exporter said.

“It may be true that the CBR had paid much higher refund amounts over the previous year, but I would like to ask who are the beneficiaries because genuine exporters of all segments of value-added sectors are not getting their claims,” asserted Pakistan Bedwear Exporters Association chairman Shabir Ahmed.

As a result of non-payment of refunds, he said, exporters were faced with liquidity crunch and were unable to make payments towards utility bills as well as wages to their employees. “Our export contracts are also in jeopardy.”

When sales tax collectorates resort to unbridled registration and without verifications many ‘paper companies’ have cropped up all over the country and are now being used for fake refund claims, he added.

The present sales tax system, he said, was very much defective and favours all, except genuine exporters, who are presently confronted with liquidity problem. In a highly-advanced technology when an individual can even make his air booking and rent-a-car anywhere in the world through his personal computer then as to why the CBR is not adopting such methods for making refunds.

Pakistan Hosiery Manufacturers Association vice-chairman Mohammad Kamran Chandna said ST refunds had been stopped and all collectors gave single reason of having no funds. He said that the situation was worst than previous year and exporters were in a dilemma as to how to meet their export commitments.

Despite the fact that there is a compliance of SRO417, under which stock and bank statements and consumption records are being furnished to the collectorate, but even then no refunds are being released.

However, Pakistan Readymade Garments Exporters & Manufacturers Association chairman claimed that the ST refund has been stopped, but according to his information some selected cases are being obliged.

He said the sales tax system was so defective that it was either benefiting corrupt officials or fake exporters at the cost of genuine exporters and national exchequer — both losers.

Anis Marfani, vice-chairman, Pakistan Knittwear Exporters Association, told Dawn that a new system should be introduced under which the State Bank should be involved through export refinance scheme. He said all ST refunds should be adjusted against the refinance scheme.