KARACHI, Oct 7: Export of value-added textile goods is said to have slowed down because the customs authorities have stopped releasing fabrics and other accessories duty free after the expiry of SRO 410 on September 30, 2003.

The exporters of value-added textile goods under the SRO 410 have been making temporary imports for exports of such fabrics and accessories, which are not manufactured locally but are required for value-addition in textile goods.

However, the withdrawal of this facility has dealt a blow to textile trade, maintain exporters. Under this SRO exporters used to import large variety of accessories and fabrics without paying duty at import stage but the same was adjusted at export stage.

For the last couple of years the government had been striving hard to introduce a system under which there would be ‘no duty no remission’. Ultimately, Duty and Tax Remission Rules for Exports (DTRE) were introduced under SRO 185.

However, the DTRE rules were infected with many flaws, which exporters kept pointing out to the Central Board of Revenue. Despite a number of meetings and discussions resulting in amendments in the rules, exporters are still not satisfied.

Out of a record exports of over $11 billion last fiscal, the textiles comprised little over $7 billion. However, four value- added textile products — readymade garments, hosiery, bedwears and fabrics — alone contributed over $4 billion.

According to experts, at present the garments were fetching around $8 per kg of cotton and fabrics between $1.5 to $2. On the whole value-added textile goods are earning better per unit price for the country.

The central chairman, Pakistan Readymade Garments and Manufacturers Association (Prgmea), Tahir Aziz, in an SOS to Commerce Minister Humayun Akhtar said that SRO 410, which allows duty free import of raw material and accessories may be extended indefinitely so that consignments of fabrics required for manufacturing of garments may be released by customs.

He said that the expiry of SRO 410 was causing huge losses to value-added textile goods in term of exports and earning of foreign exchange. In the absence of duty free import of fabrics, he said, garment exports would slow down. It is, therefore, essential to keep SRO 410 alive instead of withdrawing it all together, Mr Aziz suggested.

The Prgmea chief also referred to the SRO 185 that covers imports under the DTRE and said that the rules contained numerous intricate conditions and procedures, which can not be followed by small and medium enterprises (SMEs).

He further said that Prgmea was still holding meetings with customs and exporters in order to remove difficult conditions imposed in DTRE under SRO 185. It is important to note that not a single exporter and member of the association is registered under the DTRE scheme as they are not ready to go into cumbersome procedures enshrined in the scheme.

Mr Aziz suggested that the DTRE might be made mandatory for all exporters only when its difficult conditions and procedures were simplified and exporters were able to follow them properly.