LAHORE, Dec 28: Less than 20 exporters from across the country are said to have opted for the Duty and Tax Remission for Export scheme launched by the government from July because of certain anomalies in its rules which bar them from claiming sales tax refund on utilities, services, etc.
Industry sources told Dawn here on Saturday that the DTRE scheme had failed to “attract a favourable response from the exporters because it did not allow them to claim refund of a huge amount they pay on utilities, services, machinery, spare parts as well as certain other inputs in the form of sales or input tax”.
“Under the old scheme, we’re entitled to claim refund of sales tax and duties on almost all inputs — including electricity and courier service — used to produce a product to effectively make its export zero-rated. But the DTRE does not permit this facility and any exporter opting for registering himself under this scheme has to give up huge amounts of taxes paid on utilities, services, etc.,” said a leading exporter.
The government had started the DTRE in order to facilitate the exporters by allowing them to purchase or import raw materials or inputs for export without payment of taxes and duties on them. An exporter who registers himself under the DTRE scheme doesn’t have to pay the taxes and thus is saved from the hassles and delays in their refunds after exporting his product(s).
However, only a few businessmen have so far chosen to register themselves under it as they don’t wish to lose huge amounts of sales tax they pay on the utility bills, etc.
A textile exporter said the scheme was especially not workable for spinners and weavers who have to pay huge amount of sales tax on utilities.
Some exporters registered under the scheme, the sources added, who also market their products in the local market “have devised a unique, albeit illegal, way of claiming refund of sales tax on utilities against the local sales.”
According to a source, some businessmen had requested Wapda not to include sales tax on the power bills of the exporters who were registered under the DTRE. But their requested was turned down.