The manufacturers of textile and clothing products fear closure of industrial units because of the adverse measures proposed in the budget 2019-20. The export industry representatives apprised Prime Minister Imran Khan of export sector’s agonies in a meeting held recently prior to approval of the Budget by parliament. They warned imminent closure of industrial units.

The Prime Minister was told that textile sector had planned to invest huge amount in the sector, but withdrawal of zero rating had forced to end the plan saying the said measures will give birth to liquidity crisis. Textile sector representatives urged government not to slap 17 per cent sales tax. They said that in the presence of Prime Minister before presenting the Budget, the government had agreed to impose 7.5 per cent sales tax, but later on, the government proposed to impose 17 per cent sales tax. Going from 0 per cent to 17 per cent is practically impossible, as it will lead to liquidity crisis. They argues that to collect Rs80 bn of sales tax on domestic sales and then refunding over Rs600 bn is not justified and is an impractical proposal. The export industry stressed for imposition of sales tax at 7.5 per cent.

They proposed that the bulk of refunds due to be made as soon as possible as MR number is assigned by customs. This is confirmation that exports have been carried out. All refund amount to be paid in exports account through the commercial accounts and adjust for exchange rates or other differentials at the time of receipts of export proceeds.

They also recommended to the government in the meeting asking for imposition of GST on DTRE, EOU and Bond for level playing field for domestic industry and DLTL should be calculated only on value added within Pakistan. They also asked the government to waive CNIC condition as it is totally impracticable. They also asked the government to reduce proposed turn over tax rate of 5 per cent to 0.5 per cent.

Representatives of Five Zero Rated Sector Export Sectors called on Prime Minister Imran Khan and appealed to withhold rescinding of SRO 1125 and continue zero rating. If any amendments are required, these should be done in SRO 1125 without rescinding so that facilities given to exports oriented industries should continue and there is no hiccups in exports in the national interest and in the light of PTI’s manifesto and export policy.