FAISALABAD: Textile exporters have advised the Federal Board of Revenue (FBR) to desist the temptation of taxing the compliant segments, urging it to stop issuing notices on “flimsy” grounds.

Exporters say they are receiving notices to settle dues against sales tax refund. These outstanding dues have been calculated on the basis of a new policy of not allowing refund on trade with blacklisted firms. The policy, however, has been implemented with retrospective effect.

Consequently, earlier sales tax adjustment cases were reviewed and outstanding dues worked out against exporters who received refunds over the past two years.

Pakistan Textile Exporters Association (PTEA) chairman Sheikh Ilyas Mahmood said tax department had been issuing recovery notices to exporters demanding tax recovery on account of refunds received against the supplies of blacklisted suppliers.

He said that at the time of dealing suppliers were not blacklisted. “Recovery notices are adding insult to injury,” he said in context of other pressing problems the community has to put up with. “Besides, refunds were sanctioned after thorough scrutiny of the claim.”

The PTEA chairman said the issue was taken up with the FBR chief who agreed with the position taken by exporters. The harassment, however, did not stop, he said, and urged the FBR chief to intervene.

Our sources informed that Federal Textile Minister Abbas Khan Afridi was also approached in this regard by the desperate businessmen, who are particularly concerned about the scrutiny of their bank accounts by the FBR.

According to some others, a day after issuance of the notices the FBR had started recovery though the law permits a week’s time for submission of dues. Businessmen who failed to comply were said to be receiving notices of cent per cent penalty on the amount due.

The Pakistan Hosiery Manufacturers Association (PHMA) has also advised its members to intimate the association as soon as they get a notice from Inland Revenue department for recovery of withholding tax issued to them.

The PHMA will also meet the chief commissioner of Inland Revenue Faisalabad on Monday over the issue.

An exporter, who declined to be named, told Dawn that exporters were pressing for quick settlement of pending refund claims, but little did they know about the creativity of the FBR to trap them instead with reverse claims.

“As many as 30-35pc working capital of exporters is stuck up with sales tax, customs rebate and federal excise duty refund regimes,” he said.

An officer of the FBR said that bank managers are being coerced to transfer funds to treasury from the accounts of exporters in the name of recovery. He said it was duty of the FBR to retrieve the public money if obtained illegally.