Textile exporters in Pakistan say they have been receiving notices from the Federal Board of Revenue (FBR) to settle dues against sales tax refund. These outstanding dues have been calculated on the basis of a new policy of not allowing refund on trade with blacklisted firms. The policy, however, has been implemented with retrospective effect.

Consequently, earlier sales tax adjustment cases were reviewed and outstanding dues worked out against exporters who received refunds over the past two years. Exporters say they have been issued notices demanding tax recovery on account of refunds received against supplies of blacklisted suppliers but that at the time of dealing suppliers were not blacklisted. They insist they have been pressing for quick settlement of pending refund claims, but didn’t expect the FBR to trap them instead with reverse claims. Apparently about 30 to 35 per cent of the working capital of exporters is stuck up with sales tax, customs rebate and federal excise duty refund regimes.

The FBR says bank managers are being coerced to transfer funds to the treasury from the accounts of exporters in the name of recovery and that it was the duty of the FBR to retrieve public money if obtained illegally.

www.fbr.gov.pk/‎