Textile millers have moved court against the government for what they say outstanding liabilities amounting to over Rs13 billion, it is reliably learnt.

Due to financial constraints, textile sector's pending liabilities against the government under different schemes announced in the Textile Policy 2009-14 have swelled to over Rs 13 billion, informed sources told Business Recorder on Monday. This includes Rs 10 billion as Drawbacks on Local Taxes and Levies (DLTL) announced in the Textile Policy.

Sources revealed that Cresox Company Limited has filed a petition in Sindh High Court against the government seeking immediate release of pending liabilities.

According to sources a sum of Rs7.5 billion were allocated in the 2011-12 budget. The Ministry of Textile has sought Rs 3 billion from the Ministry of Finance to pay the outstanding liabilities but only Rs 1 billion could be released so far. Efforts are under way to seek additional funds to pay the pending liabilities of textile sector to provide it relief.

The government had announced different schemes as well as drawbacks on taxes for textile sector in the Textile Policy. The pre-policy 60 percent Research and Development (R&D) pending dues that the Policy committed have not yet been cleared.

The ongoing financial crisis as well as the cumbersome registration process for obtaining dues accounts for only 10 percent of companies qualifying for R&D, textile exporters added.

Official sources revealed that to meet stakeholders' pending liabilities, more than Rs 17.25 billion have been disbursed to the industry under various schemes in last two years and further requests have been sent to the Ministry of Finance to allocate more funds to support the industry by settling remaining claims.