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Payment by cheque resented

RECORDER REPORT

KARACHI: Yarn merchants have resented the mandatory transactions of payment of Rs.50,000 by cheque.

In a press statement issued by the Pakistan Yarn Merchant Association on Wednesday, its chairman, Rafiq Ebrahim, said that the textile industry has multiple stages and all the stages are not registered for tax.

"The mandatory payment by crossed cheque will abruptly halt the credit line available to exporters. As in most of the cases trade transactions are made through middlemen mostly know as brokers who are invisible catalyst for manufacturers," Ebrahim said.

Manufacturers get the advance payments which eases the financial liquidity and exporter get the credit for 30 or more days which eases burden or pre-shipment finance. Hence brokers are the basic catalysts in the facilities for yarn and fabric exports, he said.

As the government gets the sales tax deducted then and there, at the export stage, there should be no hindrance in the refund of sales tax.

The payment transactions of Rs. 50,000 and above by cheque will adversely affect the already dwindling exports, said Ebrahim.

He asked the government to withdraw immediately the mandatory transactions by the crossed cheque.