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ST Refunds Failure: Garment Exporters Question FASTER Delivery


LAHORE– Pakistan Readymade Garments Manufacturers and Exporters Association (NZ) Chairman Sohail Sheikh has expressed his disappointment over the performance of the Federal Board of Revenue’s newly-launched Fully Automated Sales Tax e-Refund (FASTER) System, saying the commitment by the government to release exporters’ refunds within 72 hours has not been fulfilled yet.

“PRGMEA welcomes Prime Minister Imran Khan’s directives to FBR to clear pending refunds of exporters, removing bottlenecks from the new refund payment system of the FBR,” he said in a statement.

PRGMEA NZ chairman asked the PM to also get his directives implemented on immediate basis and in their true spirit, as the exporters are facing a severe liquidity crunch due to delay in payment of sales tax refunds despite launch of new system.

He said that timely payment of refund claims is still a major issue and needs resolution on high priority. Despite the FBR commitment that sales tax refunds will be paid within 72 hours of submission of claims, billions of rupees of exporters are stuck on account of sales tax refunds, he added.

He said that the sales tax refunds amount has crossed volume of Rs100 billion since the announcement of FBR’s new system in July last year after withdrawal of zero-rating regime.

He said that total sales tax refund claims have touched the figure of about Rs.350 billion, as government has totally failed to release refunds within 72 hours.

He said that increase in exports of the country is a very important objective as far as improvement of economy of the country is concerned. He observed that it should be the utmost priority of the government to facilitate exporters in every possible way.

He said that exporters are unable to procure and purchase raw materials and other accessories for fulfilling their future export orders and this will ultimately collapse the entire export trade, he added.

Sohail Sheikh said that the FBR had claimed that it would pay sales tax refunds in the range of Rs15-20 billion through the newly installed Fully Automated Sales Tax e-Refund (FASTER) system to exporters of five sectors within 72 hours of submission of claims.

However, at the initial stage exporters faced lots of hardship in filing their sales tax returns for getting refund, as the FASTER system never works because ‘annexure H’ of the system carried many flaws. He further said that all these issues were shared with the relevant FBR authorities.

He said that despite repeated assurances, the system still has deficiencies which make sales tax refunds impossible.

The Chairman said that the government had made a commitment to expedite the payment of refund claims, every time giving new date but never fulilled its promise.

He added that record inflation has hit the purchasing power of the common man due to which business activities have reduced significantly. He urged the government to reduce prices of fuel, electricity as well as the gas, besides reducing key policy interest rate to the single digit to facilitate the exporters.

He said that the high cost of doing business has not only ousted Pakistani products from the international marketplace but is also jacking up the graph of unemployment.

He warned that the economy can further weaken if the current financial policies are not reviewed immediately.

He demanded the of the FBR to release all refund claims of the export sector at the earliest.— PRESS RELEASE