Sindh Infrastructure Cess Exemption Welcomed by PTEA

Staff Report

FAISALABAD–The Pakistan Textile Exporters Association (PTEA) has tipped its hat to the Government of Sindh for its forward-thinking decision regarding the Sindh Infrastructure Cess Exemption, to exempt imports under the Export Facilitation Scheme (EFS) from the Sindh Infrastructure Cess, making the policy clearer and more business-friendly.

The association’s office bearers have called it a step in the right direction— a well-calibrated measure that will ease liquidity constraints and reduce financial pressure on exporters.

Call to Extend Exemption to Past EFS Imports

However, they stressed the need to extend this exemption to all past EFS imports as well, to ensure policy consistency, fairness, and a truly enabling export environment.

PTEA Chairman Sohail Pasha described the decision as a pragmatic and facilitative step, reflecting the Government’s responsiveness to the operational realities of exporters.

He said that this policy initiative represents a meaningful advancement toward harmonizing provincial fiscal measures with internationally accepted principles governing exports, particularly the concept of zero-rating for goods destined for export markets. He added that such alignment is critical for enhancing Pakistan’s export competitiveness, promoting industrial efficiency, and sustaining growth in foreign exchange earnings.

Need for Consistency in Export Facilitation Policies

He recognized the Government’s constructive approach in providing a structured mechanism for the phased settlement of past liabilities. The instalment facility offers much-needed financial flexibility to exporters and underscores a balanced policy framework aimed at ensuring compliance without undue strain on the sector.

Notwithstanding these commendable measures, he pointed out that the restriction of exemption to prospective consignments, while maintaining the levy on prior imports effected under the Export Facilitation Scheme, gives rise to an unintended inconsistency.

The continuation of such liabilities imposes a residual financial burden on exporters, adversely impacting liquidity and creating a divergence from the fundamental principle of zero-rating. He urged the Sindh Government to consider extending the exemption from Sindh Infrastructure Cess to all prior liabilities arising on imports made under the Export Facilitation Scheme.

Exporters Demand Retrospective Relief for Sustainable Growth

PTEA’s Vice Chairman Ameer Ahmad highlighted that the infrastructure cess on the imports under EFS has been abolished, fulfilling a major demand of exporters.

Exporters’ prolonged struggle has finally borne fruit, providing much-needed fiscal space to the trading community. He added that extending the exemption from Sindh Infrastructure Cess to all prior imports undertaken under the Export Facilitation Scheme (EFS) is both equitable and economically prudent.

A retrospective application of this exemption would alleviate financial pressures, enhance cash flow management, and contribute to a more coherent, equitable, and export-oriented fiscal regime.

Such a measure would ease liquidity constraints, strengthen cost competitiveness in global markets, and reinforce a consistent, investor-friendly fiscal framework, thereby supporting sustained export growth and industrial stability.

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