April 4, 2003	Friday	Safar 1, 1424

KARACHI, April 3: A large number of stuck-up sales tax refund claims amounting in billions of rupees are crippling export trade as many exporters faced with acute liquidity problem find it difficult to meet the cost of their future shipments.

Business leaders representing exporter’s bodies when contacted by Dawn were of a unanimous view that the defective sales tax and refund system is only serving those who file fake and ‘flying invoices.’

For the last five years the Central Board of Revenue (CBR) had been introducing one system after another in its endeavour to make the entire sales tax refund system foolproof. But each attempt seems to have encouraged only those who deal in fake and ‘flying invoices’ and results in higher payments towards such illegal claims, lamented exporters.

Former chairman Pakistan Bedwear Exporters Association (PBEA) Shabir Ahmed said that he did not receive any refund payment since October last and millions of rupees were held back by the sales tax collectorate on this account.

Shabir said that he even met the member sales tax (CBR) Ramzan Bhatti and apprised him about the developing situation but no worth mentioning results were seen. Though the high officials of the CBR agreed that the sales tax and refund system was defective but still they did not improve it and make it foolproof, he added.

He said “the only way out is to make exports at zero rate because as long as the system allows a supplier to deduct sales tax on his end there is no guarantee if he or she will submit the same in the national exchequer.”

The situation had become worse that many exporters had stopped to meet their future export contracts owing to shortage of funds, he said and added that presently billions of rupees were held back by the CBR on account of sales tax refund.

He urged the Shaukat Aziz, adviser to the prime minister on Finance, to immediately intervene and save country’s exports from total collapse.

Chairman Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA) Zubair Parekh said that around Rs6 billion belonging to knitted and woven garments exporters were stuck up in sales tax refund. He said as to how an exporter could function when his entire liquidity was taken away from him.

He said the present system of refund known as Refund Claim Preparatory System (RCPS), run through computer under a software programme of STARR was not workable. Zubair said the system was so difficult and time consuming that even on engaging a large number of office staff the condition of maintaining records could not be fulfilled.

The PRGMEA chief said for filing monthly sales tax returns a large number of purchase and sale invoices, shipping bills and other documents numbering in hundreds had to be submitted but still the refund was not paid by the CBR.

It was ironic, he said even after all such documentations the number of fake and flying invoices was growing and similarly the number of ‘black listed’ companies was also increasing every year.

Zubair Parekh said that the CBR’s computer system was very slow and took hours all together for downloading data provided by exporters in the disks for refund claim purposes. Many a time, he said the computer after consuming up to eight hours in downloading came out with a message of ‘error.’

On other occasions, he said there was a breakdown in computer system of CBR which also resulted in piling up of refund claims but the end sufferer was export trade of the country.

Anis Marfani, chairman Pakistan Knitted and Sweaters Exporters Association (PAKSEA) said the sales tax refund system was so difficult that no honest and genuine exporter could get his refund amount. On the other hand, he said that high officials of the CBR admit that refund amount every year surpasses the actual collection of sales tax but the question was who were the beneficiaries of these payments.

He further said that the inconsistency in the system and frequent demand of different documents by sales tax authorities resulted in waste of time and long delay in refund payments to genuine exporters.