LAHORE: Sialkot exporters have decided to observe a ‘zero export day’ on Wednesday (May 27) to press the government for release of their outstanding duty drawback claims and sales tax refunds.

It will be the first time that the exporters from Sialkot close down their factories to protest against the government policy of practically eliminating their zero-rated status.

Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA) Chairman Ijaz Khokhar told Dawn on Monday by phone that trade associations representing the manufacturers and exporters of readymade garments, knitwear, gloves, surgical instruments and sports goods had unanimously decided to observe the ‘zero export day’ under the umbrella of the Sialkot Chamber of Commerce and Industry (SCCI).

He said the government’s failure to pay their money had resulted in massive cash crunch for the small and medium-sized industry and creating problems for the exporters.

He said the exporters had been dragged into the vicious circle of paying sales tax and later claiming refunds through changes in SRO 1125(I)/2011. Initially, the protesting five export sectors were declared zero-rated under SRO1125(I)/2011, but subsequently the facility of zero rating was gradually withdrawn.

It is emphasised that SRO 1125(I)/2011 should be restored to its original status to make their exports truly zero rated.

He said the exporters would also hold protest demonstrations at the Sialkot dry port and outside the tax offices in the city.

The exporters also want the government to withdraw controversial SRO 98(I)/2013 that declares them as Sales Tax Withholding Agent. “This SRO is controversial for exporters, particularly for SME exporters,” he said.

“The order unnecessarily forces the exporters to collect tax from unregistered persons and deal with undocumented sector with the result that one per cent sales tax withholding has been added to the cost of the exporters.

“Hence SRO 98(I)/2013 and SRO 897(I)/2013 should be immediately rescinded.”

Published in Dawn, May 26th, 2015

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