Observer Report Islamabad
The payment of customs duty rebate to the textile sector doubled during tax year 2020.
According to details issued by the Federal Board of Revenue (FBR), the payment of customs duty rebated was Rs18.31 billion during tax year 2020 as compared with Rs9 billion in the preceding tax year, showing an increase of 103.33 percent.
According to the FBR, the major chunk of the rebate payment to the textile sector was issued to ready-made garments and fabric made-ups.
The payment of customs duty rebate to the ready-made garment industry was Rs6.5 billion during tax year 2020 as compared with Rs1.88 billion in the preceding tax year, showing a growth of 246 percent.
Likewise, the payment of duty rebate to fabric and made-up increased to Rs6.41 billion in tax year 2020 as compared to Rs1.12 billion in the preceding tax year, showing an increase of 472 percent.
The FBR has taken all possible measures to provide relief through payment of refunds and rebate to sectors of the economy for resolving liquidity issues during the coronavirus pandemic.
The FBR issued a rebate to the tune of Rs1.56 billion to the hosiery industry during tax year 2020 and Rs1.24 billion to the cotton fabric industry.
The FBR issued an amount of Rs24.4 billion as a total duty rebate during tax year 2020 as compared with Rs14 billion in the preceding tax year, showing an increase of 74 percent.
It is pertinent to mention that FBR last week announced to allow exporters of the five ex-zero rated export sectors, including the textiles and clothing industry, to refile their claims for “missing amounts” of their past sales tax refunds, that is a major relief.
In a circular, the FBR admitted that the flaws in its fully automated sales tax e-refunds (FASTER ) system rolled out almost a year ago for fast-track processing and payment of export refund claims in 72 hours “simply missed out on the sales tax credits of various taxpayers”, thus stalling the processing of refund claims.
The FBR claims that the flaws in FASTER have been remedied and matters regarding the processing of past missing amounts of sales tax refunds resolved.
