Export facilities

This refers to the news story, ‘Govt decides to impose 17pc sales tax on export industry’ (June 10). Exporters’ demand for continuation of the zero-rated facility is arising because of the abnormal delay in settlement of refund claims by the government. At present, billions of rupees of refunds are stuck up – creating a liquidity problem for export-based industries.A simple mechanism can be adopted in which exporters should get a refund as soon as the export proceeds are received in the bank. The refund amount should be calculated at a straight 17 percent of the inward remittance received in the exporters' bank from the foreign buyer. The refund must be disbursed within 72 hours of receipt of remittance without going into the lengthy reconciliation and verification process of sales tax payment and the refund claim. In fact, this facility should be extended to all industries catering to exports instead of restricting it to the five industries enjoying the zero-rated facility. This is the easiest way to incentivise exporters by making their products competitive and rejuvenating the export sector. The country’s survival lies in a plan for a quantum jump in the exports of manufactured products.Arshad M KhawajaKarachi

from The News International - Newspost http://bit.ly/2XG5KBG