KARACHI, March 3: The Federal Board of Revenue (FBR) has directed customs authorities to only accept cheques against custom duty, which carry assurance of ‘good for payment’ from banks for goods re-exported after processing. Exporters have termed the measure another harsh blow to exports.
The exporters say they are already facing liquidity problem owing to non-payment of duty drawback and sales tax refund due to faulty STARR system, which also includes refund payments against packing material allowed to the export trade.
They allege that all such measures are anti-export and anti-industry and the FBR in the process of achieving its revenue target was “killing the goose (exports) laying golden eggs”.
Due to the acute liquidity problem exporters are unable to meet their export commitments and the new directive will further bring down export earnings and widen the trade deficit, they added.
In the past the customs authorities used to accept the post-dated cheques against duty for goods meant for re-export without asking for a written bank assurance. After consuming these goods, which are normally accessories and also making shipment of export consignments within a period of six months, exporter is handed back the cheque by the customs.
However, if an exporter fails to consume these accessories and does not make any shipment within a period of six months the customs en-cashes the cheques and the exporter was not able to make any claim against the import duty accrued on this account.
However, exporters will now have to deposit equal amount of money with the banks before getting the assurance for payment against such cheques because no bank will undertake a risk without getting funds from the exporter. As a result of the condition laid down by the FBR huge funds of exporters would stuck up with banks for six months.
Pakistan Hosiery Manufacturers Association Chairman Javed Bilwani said that the FBR, in order to meet revenue shortfall, is taking such harsh measures at the cost of exports. He said trade deficit was swelling beyond control and instead of facilitating exports the FBR was adding to exporters’ woes.
Pakistan Bedwear Exporters’ Association Chairman Shabir Ahmed said that the board could replenish its short revenue from other sectors but by bringing the export trade under financial crunch the trade gap would further widen.
There were many businesses still outside the tax net and others had been evading billions of rupees in taxes, he said, adding the FBR could generate huge revenue from these sectors.
Mr Shabir said that it was easy to squeeze the organised sector, which was under the tax net because the tax machinery had to do little in collecting more revenue from them.
